Exploring the challenge of grid capacity

Grid capacity has been and continues to be a significant barrier that needs to be overcome if the UK’s Net Zero emissions target is to be met by 2050.

Landowners and developers looking to invest in renewable energy schemes in rural areas often come to find that ‘one size’ does not fit all and many schemes have been written off over the years as a result of being too far away from the substation – and therefore facing high grid connection costs – or due to lack of capacity. On occasions, there may be a requirement to upgrade existing substations to facilitate a connect, adding further costs and making the development unviable.

Support from the UK government and Distribution Network Operators (DNOs) is now more critical than ever if the UK’s Net Zero target is to be achieved. Recent figures have shown that England and Wales, in particular, are behind Scotland by around 30% in terms of operational renewable energy projects that account for the country’s overall electricity generation. The Parliament’s Welsh Affairs Committee just last week has asked that the UK government works closely with Ofgem to plan more investment across the grid network.

The CLA is also lobbying for more to be done by the government to futureproof rural SMEs, as they warn that what we are seeing at the moment is a position very similar to that of telecoms and broadband, whereby rural areas are deemed too expensive and are therefore avoided or left until last. The CLA is working to influence how costs are being charged to rural businesses by DNOs to overcome this unfair and significant barrier to development. Possible solutions being explored include attempting to socialise the costing economy. This means that we could see DNOs giving either a different rate per Km or a flat rate to individuals in rural areas who are set distances away from a substation, potentially more flexibility in negotiation of terms or land exchange with DNOs and, finally, the possibility of local grids are also options that are being explored.

This issue is also following through into EV charging infrastructure as MPs ask for a fair rollout of charging points. On the 28 July 2021, The Commons Transport Committee raised the issue in its Zero Emission Vehicles report stating that those in rural or remote areas “should not face a postcode lottery.” Whole coverage across the country needs to be taken into consideration, and possibly the applicability of grants for rural businesses such as tourism businesses and small manufacturers should be addressed. These are businesses who rely on either people in their supply chain being able to re-charge their electric vans or visitors being able to charge their electric vehicles when staying at holiday cottages and resorts as a means of exploring the countryside. It has been requested that the Office for Zero Emission Vehicles (OZEV) works with National Grid to tackle the ‘not spot’ areas where grid support is required. National Grid has said that they are “working with government to map out where critical grid capacity is needed to enable the faster roll out of charging points", adding that capacity would have to be ramped up to help achieve the UK’s net zero goals, both by being smart and by increasing the physical infrastructure.

Another positive indication that action is being taken to work towards resolving these issues includes recent research data from Electricity North West (ENW) showing that EV charge points added to the network in the northwest have increased by over 300% since 2019, excluding standard at-home chargers. As a result, ENW are now proposing to create a £1 million fund to support more EV charging hubs along major A-roads whilst also upgrading the network in more remote areas such as Cumbria.

Furthermore, in November 2020, Ofgem awarded five projects up to £58 million of funding following a Network Innovation Competition to help drive net zero. Two of the winning projects were electricity projects that will focus on boosting the flexibility and capacity of the grid. ENW was awarded £7.95 million for Project QUEST that will look to integrate standalone voltage control schemes into a single system to create a “self-balancing” network which will thereby unlock capacity and reduce the need for network reinforcement. National Grid was also awarded £8.12 million for Project RICA which will upgrade electricity transmission towers to carry higher voltages, boosting capacity and reducing the need to construct further overhead power lines.

It is evident that grid capacity is changing all the time as DNOs are working constantly to upgrade the network and provide additional capacity. What this means for landowners and developers is that an energy scheme that was not deemed viable before may be viable now and new connections may have become available. It should be noted that, although network upgrades can sometimes take a while, once the works have been programmed in, the capacity becomes available, and applications can be made in advance to secure it. Where schemes are still proving to be unfeasible as a result of the apparent lack of grid capacity or excessive connection costs, it is encouraged that these case studies be shared with the CLA. This will assist them with continuing to build an argument to the government, reinforcing that this is a systemic and pervasive issue faced by several businesses and landowners in rural areas. This may open up doors to possible cost saving solutions that could help bridge the gap between the current situation and proposed works to increase grid capacity over the coming years.

If you have struggled with grid capacity in the past or have received high costs for a grid connection, this may be something we can investigate and assist you with. Alternatively, if you are a renewable energy developer or landowner with land that you consider potentially suitable for development and require any grid advice for any of your proposals, whether it be matters considered in this article or any other aspects of energy planning, then the team at Carter Jonas is always on hand to offer advice.

For more information, please contact Shafk Malik on 07795 457342 or shafk.malik@carterjonas.co.uk.

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