Electricity transmission infrastructure: what’s changed

Blog
Image of Irina Dihanova
Irina Dihanova
Senior Manager - Infrastructure Engagement
Publication date
Company
National Energy System Operator Limited
Industry sector
Transmission Network

The government aims to achieve a flexible clean energy system by 2030. Building and upgrading the electricity transmission network is essential to reaching this.

According to the National Energy System Operator (NESO), network expansion needs to happen at more than 4 times the rate of the last decade. This means delivering twice as much investment in half the time.  

In this blog, we explore:

  • what the electricity system is and who operates it
  • designing solutions to meet future infrastructure needs
  • our role in regulating the funding of transmission projects

How the electricity system works

There are 3 stages to providing people with electricity.

Electricity generation

Electricity is generated by a mix of traditional fuel power such as coal and natural gas and renewable energy like wind, solar or nuclear energy at power plant stations.

Electricity transmission

Overhead power lines attached to pylons (metal towers) quickly move large amounts of high voltage electricity across long distances.

Electricity distribution

Electricity from the transmission network is taken and changed into safer levels (low voltage). Distribution network operators share this with local areas and communities so it can reach homes, businesses and buildings.

Who is involved in transmitting electricity

NESO manages the flow of electricity from generation to transmission. It is responsible for planning and coordinating the design of electricity networks. This includes making sure there is enough supply to meet consumer demand.

There are 3 companies that manage electricity networks in Great Britain (England, Scotland and Wales). These are:

Transmission owners maintain electricity supply and pass this on to distribution network operators. They also carry out the work to connect large demand customers and generators to the electricity network.

Designing electricity networks

NESO is responsible for designing an energy system that meets future electricity infrastructure needs. Transmission owners create proposed solutions to meet these needs. This might include refurbishing, upgrading or building new essential infrastructure or accelerating grid connections.

For each project, transmission owners are expected to:

  • progress the detailed design of the physical components used in the infrastructure, for example, pylons that support overhead power lines
  • engage with local affected communities before applying and getting planning approval from the relevant planning authorities
  • work with relevant stakeholders as part of the project development

Our role in funding and approving projects

We regulate the companies that design, build, operate and maintain electricity transmission infrastructure. We do not design new transmission projects, plan how they should be built, or decide which routes they should take. This is the responsibility of the transmission owner and the relevant planning authorities.

Transmission owners are directly funded through energy bills paid by consumers. It’s important that we make sure any network upgrade costs represent good value for money for consumers. We do this through our network price controls known as RIIO (Revenue = Incentives + Innovation + Outputs).

Under RIIO, we approve costs and funding for electricity transmission projects. When assessing them, we consider:

  • financial costs of the project and whether they are efficient
  • benefits of the project to consumers
  • detailed design decisions
  • other options and alternatives to the proposed solution

As part of our rigorous process, transmission owners must assess a range of possible designs that provide value to consumers. Larger projects applying for funding under our Large Onshore Transmission Investments (LOTI) framework must justify the design of the project.

Minimising impact on consumers, local communities and the environment

Building new or upgrading infrastructure could potentially affect how much consumers pay for their energy bills. It’s important that the right amount of funding is approved for the projects.

We can limit the effects of this whilst making sure consumers benefit from a secure supply of clean and affordable electricity.

However, transmission owners should be considering stakeholders’ views when planning and designing their projects. It’s their responsibility to involve consumers and local communities in their plans for new infrastructure. They may also need to complete specific assessments such as local impact and environmental surveys before they can receive permission from planning authorities.

Accelerating electricity transmission projects

Our Accelerated Strategic Transmission Investment (ASTI) framework plays an important part in the delivery of clean power by 2030.

We developed the framework in 2022 to fast track our approvals process for high priority transmission upgrades that needed acceleration. There are currently 26 projects that are using the framework to reduce the build time of transmission infrastructure.

Benefits of the framework

The ASTI framework provides phased funding and approval and a financial incentive on transmission owners to make sure that required upgrades are delivered on time. It will help connect up to 50 gigawatts (GW) of offshore wind by 2030.

We expect to still assess conventional major projects through our LOTI process.

Further reading 

You can learn more about the ASTI framework in our decision on accelerating onshore electricity transmission investment.

We also recently published our decision on the funding and approval framework for onshore transitional Centralised Strategic Network Plan 2 projects. This mainly focuses on the next phase of infrastructure investments due after 2030.