Will your decarbonisation and savings plans be derailed by the grid?
Monday, 13 November 2023
Your sustainability milestones for achieving 2030 reductions (science based or otherwise) will probably depend on some level of local generation or even electrification of processes, so at some point you may need for additional import capacity or to connect local generation or energy storage.
You should consider these goals to be at serious risk.
The grid is currently in an unprecedented situation. National Grid are “calling in” any G99 application to the DNOs of more than 1MW under what they call “Statement of Works”. There are rumours this may even reduce to 300kW.
The impact of this Statement of Works process is additional cost, at least 1 year delay and importantly uncertainty on the outcome. Where the DNOs adhere to 65 working days for an offer to be provided, which is free other than the DNO design fee, National Grid have a two-step process. The first step takes circa 3 months, for them to advise if they object to the DNO offer, and then they can take circa 9 months to revert with a connection date, which can be a long way into the future. For this process they charge at least £18,000 and up to £43,000.
At least half the DNOs we have spoken to recently are quoting “2035” or “2037” for likely connection dates, per the guidelines they are being given from National Grid. So your goals that depend on new connections before 2035 are at risk..
Why is this happening ?
The DNOs are facing unprecedented applications for connections. Much of this is down to large battery projects which absorb all available import & export capacity on the substation they would connect to, and larger grid scale renewables. This leaves the substation in “red” condition, requiring significant upgrade works, which then take years to complete. The G99 application process works on a first-come, first-served basis, so these projects will rank ahead of a business applying if they apply first.
What is the implications ?
- Firstly, the utility scale renewables and battery projects aren’t going to happen. That industry may as well pack up for the next 12 years. Availability of PPAs for corporate decarbonisation may dry up as a result;
- Company’s that expect to decarbonise should expect that their plans for the next 12 years to be watered down unless they adopt innovative solutions. In our experience the DNOs are still keen to make connections so there is some scope for negotiations;
- Company’s developing technology to support decarbonisation could find there is no market for their products, because companies will be unable to adopt them due to the lack of grid capacity;
- Benefits from IETF round 3 (or further) will be muted, as no one will be able to connect any meaningful projects;
- Capacity for electric vehicle recharging and electric trucks may struggle to be established due to the grid limitations;
- The DNO’s will suffer the local backlash from this, and due to the lower number of connections, may well see redundancies of experienced design and engineering staff;
- If you haven’t applied for your connection already for the project you are considering, you should do so without delay.
All of this at a time when the UK has signed up to legally binding targets to decarbonise and momentum is building in industry to achieve goals.
It’s a major national crisis that National Grid is in this position. In a recent article on the BBC, Ofgem announced National Grid would be able to raise £20 billion through bills, but the reality is the number needed to solve the issue and have a grid suitable for decarbonisation is more like £100-200 billion. The energy transition and shift to electric vehicles has long been signposted, so why isn’t the grid more capable ? Whether the future brings scale adoption of Electric Vehicles & Trucks, or for hydrogen adoption or other decarbonisation activities, the grid is an often unmentioned but essential part of the solution.
What can you do to help your business ?
The good news is there are some things you can do.
First is political pressure. We have found this has worked on at least two occasions we have been involved with. Speak to your MP, speak to your councils. Convey your concern and explain the threat to your plans. This is a major issue for international competitiveness.
Second, be prepared to adapt. Your scheme may need to be reconsidered or redesigned. Consider phasing it, or there are other solutions that we can advise on.
Third, currently there isn’t anything the DNO and National Grid can do about you reducing your consumption on site through energy efficiency measures. Perhaps this will be the unforeseen beneficial outcome of this, that energy efficiency finally receives top priority in corporate plans.
Finally, submit your application if not already done so. It’s the only way you can gain certainty about your specific situation.
In our view what is needed is a policy shift from Government to re-prioritise the G99 application process to give priority to applications that create local impact, and which support local jobs. Grid services can wait for now.
If you would like to discuss your plans and the likely situation you are facing regarding grid connection, then please contact one of us as follows: David Kipling (CEO) [email protected] or David Jamieson (Sales Director) at [email protected].
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