Embracing strategic energy plans
Blog
- Fiona Campbell
- Deputy Director of Energy Systems Design and Development
- Publication date
- Industry sector
- Distribution Network
- Transmission Network
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The connections queue now stands at 722GW across transmission and distribution, a 3GW drop on last month. Whilst this reduction is obviously welcome, there remains much to do.
It’s already clear from the first few months of this government that, more than ever, there is a need for speed. We must make changes to let the clean electricity we need flow through the Grid and power up the nation, cleanly and securely.
We have made a good start through the Connections Action Plan. Measures under the plan have so far resulted in:
- over 10GW of stalled projects being removed from the queue
- over 25GW of new capacity being released on the existing network for new storage projects
- around 10GW of existing projects having their connection dates accelerated by an average of 6 years
As discussed in the last blog, moving forward it will now be crucial to ensure the connections process delivers a streamlined pipeline of projects that are ready to connect and are aligned with what is needed, as Ofgem and the government expect the Clean Power 2030 plan (CP2030) and the Strategic Spatial Energy Plan (SSEP) to identify. As we know, the government has asked the National Energy System Operator to provide independent advice on a clean power pathway to 2030, with that advice expected over the coming weeks.
This blog will focus on the expectations for the next steps of connections reform and the options and implementation pathways to go further to align with broader strategic planning. We then discuss what Ofgem is planning to deliver in the next few months to support the reforms.
As usual, the minutes of the September CDB will be available on the Energy Networks Association Connections Delivery Board webpage.
Ofgem Open Letter and Strategic Planning
September saw the release of the Ofgem open letter on the reformed regulatory framework on connections. The letter highlights the importance of aligning the connections process with broader strategic planning, including CP2030, to ensure that projects that are ready and needed can connect when we need them.
Aligning connections processes with system plans will require changes to the licence conditions that govern how network companies offer connections to networks. The proposed licence changes will set out the additional requirements that projects would need to meet to enter the connections queue.
These licence changes will be developed in parallel with the reformed connections process (TMO4+) code modifications to enable delivery of reform as soon as possible. Ofgem will consult on the policy and all proposed new and modified licence conditions by the end of this year.
Options for technology criteria in TMO4+
A key focus of this month’s Board discussion was around the potential for technology criteria in the TMO4+ to align with strategic plans and how this would work in practice. The National Energy System Operator presented two potential options:
- filtering the connections queue based on capacity limits set out in CP2030. This means that the connections queue will be formed by ready projects needed in CP2030. Projects that do not align would only receive an indicative offer
- prioritising projects based on CP2030. This means that the connections queue will be formed by ready projects needed for CP2030, plus all other projects that meet the readiness criteria. However, the projects identified in CP2030 or designated by NESO would be prioritised over the other ones that are ready
The discussion brought in a constructive range of views across the membership. We welcome the robust debate in these meetings. The Board’s clear steer was that both options need further consideration to allow us to explore benefits and drawbacks before making any decisions. This discussion will be brought back to the Board next month for further discussions.
Financial criteria
As mentioned in last month’s connections blog, the National Energy System Operator have continued to explore options for a code modification focusing on financial criteria. If implemented, this modification would require projects to demonstrate a financial commitment to retain their place within the connections queue. Implementation options could include imposing additional fees, charges or securities, with the potential to revise existing charges for projects in the queue. The National Energy System Operator is undertaking a full options assessment.
Any decisions on new licence conditions, methodologies and proposed code modifications will be subject to comprehensive stakeholder consultation. We expect these consultations to take place over the coming months so that, if taken forward, changes can be made in early 2025.
Next Month
The Board looks forward to seeing the proposals around filter vs prioritise worked up in more detail and brought back to the October meeting.
At Ofgem, we also expect to publish a consultation on our connections end to end review over the next few weeks. This review looks at the whole connections process from end to end with a view to understanding where improvements could be made to drive the behaviours and outcomes we need to see.
I will continue to write the monthly connections blog, as well as chair the Connections Delivery Board for the next couple of months whilst my colleague Jack Presley Abbott is on parental leave.
Thank you to everyone for a hugely helpful Board meeting and for the progress being made in this complex and crucial area.