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Autumn Statement 2023

The Connections Action Plan aims to reduce connection timescales 

Introduction

The UK’s energy sector is facing significant delays in connecting customers to the electricity network, a crucial aspect of achieving net zero targets and mitigating climate change. The UK’s Powering Up Britain Energy Security Plan and the Connections Action Plan aim to reduce connection timescales, ensuring customers can connect to the electricity network when and where they need to. 
  • There is currently around 500GW of capacity across transmission and distribution holding connection agreements and this is increasing rapidly as an unprecedented number of renewable/low carbon generation and storage projects accept connection offers.
  • The current pipeline of generation and storage projects seeking connection goes substantially beyond what is required to meet decarbonisation targets, but is blocked by surmountable regulatory, technical, procedural and commercial barriers.
  • Relatively low entry requirements for transmission projects; the inability of the Electricity System Operator (ESO) to terminate transmission connection agreements for projects that are not progressing; how network capacity is modelled and allocated; and the availability and use of data, have all contributed to lengthy connection timescales.
  • Without action to remove these barriers, the connection queue will continue to increase with consequences on (1) the ability to decarbonise energy supply and meet net zero targets;(2)  energy security; (3) consumer bills; and (4) missed opportunities for attracting investment with its associated jobs and economic growth.
 
Transmission Acceleration Action Plan and Connections Action Plan
The Transmission Acceleration Action Plan aims to halve the time it takes to build new transmission infrastructure, while the Connections Action Plan aims to reform the connections process to enable viable projects to connect in a timely and cost-effective manner. 
 
The report stated that the current connection process is not fit for purpose and requires fundamental reform. The connection queue will continue to increase, impacting decarbonisation, energy security, consumer bills, and missed opportunities for investment. It is essential that viable projects can connect faster and investors have certainty in connection dates.
  • The aim is to have a connections process that works equally for demand and generation customers, as well as the energy system as a whole.
  • The ambition is for transmission connection dates offered to be on average no more than 6 months beyond the date requested by the customer.
 
Key Solutions raised in the Action Plan
  1. Raise Entry Requirements – To increase the quality of projects applying for transmission connections and deter speculative connection applications. Subject to Ofgem’s approval, the ESO will start requiring a landowner Letter of Authority to evidence permission from a landowner for a transmission network connection application to be accepted.
  2. Remove stalled projects – To release capacity for more viable projects. Introduction of milestones in transmission connection contracts which a connection customer must meet or face termination of their connection contract – this would result in affected customers losing their position in the queue.
  3. Better utilise existing network capacity to reduce connection timelines – Changes to how the impact of connections is assessed by the ESO and network companies, beyond existing actions, and enhance use of flexibility, including non-firm/flexible connections. 
  4. Better allocate available network capacity – Moving away from the first come first served approach to one that connects projects that are readier to progress and are able to quickly make use of capacity.
  5. Improve data and processes and sharpen obligations and incentives – Give connection customers a better understanding of the condition of networks, to improve the quality of their connection applications and reduce speculative applications. Ensure network companies deliver timely connections and high-quality customer service, as well as acting consistently. This will ensure that all customers receive the same high-quality service from the ESO and network companies wherever they are located, improve the interaction and consistency between transmission and distribution, and that network companies deliver timely connections.
  6. Develop longer term connections process models – Models will be aligned with strategic planning and market reform, to ensure they are integrated to deliver strategic outcomes for a timely and efficient transition to net zero energy system.
 
CONCLUSION
The government’s plan for energy efficiency and renewable energy will have both immediate and enduring impacts. The plan, combined with ESO and network company initiatives, could bring forward £50-100bn of capital expenditure over the next 10 years. In the immediate term, the ESO will free up around 100GW of transmission capacity, which is similar to the 90-100GW of generation capacity needed by 2030 to align with net zero pathways
. 
Short-term actions by the Energy Networks Association (ENA) will accelerate around 30GW of generation connections, improving connection dates for some existing customers by up to 10 years. The plan will be implemented by a new Ofgem-chaired Connections Delivery Board, which will provide strategic direction, accountability, track progress against targets, and mandate further actions as required. The actions will positively impact all types of connection customers, from large-scale renewable generation to industrial decarbonisation projects and freeports.
 
Talk to Eclipse
Please get in touch with our team to discuss how this may impact your projects.
 

Useful Information and Links:

Connections-action-plan.pdf (publishing.service.gov.uk)

Ofgem welcomes focus on grid connections and transmission network build in Autumn Statement | Ofgem