Foresights

Two-minute precis 

• The UK must break the logjam of new renewable projects wanting to connect to the National Grid (or simply “the grid”) as soon as possible to accelerate the UK’s transition to net-zero.
• There are so many new renewable projects applying for grid connections, the grid cannot keep up.
  
• The National Grid was built in the 1930s and 1940s when one or two fossil fuel powered power stations requested a connection each year.
• Industry sources estimate there are over 1,000 projects, worth more than £200 billion and with a total capacity of 176GW, in the queue to the connect to the grid.
• Some new solar and wind sites have taken up to 10 to 15 years to be connected to the grid. 
• The UK currently has a 2035 target for 100 per cent of its electricity to be produced without carbon emissions.
• The UK has an overarching target for its economy to be “net-zero” by 2050.
• Climate campaigners, green investors and renewable energy companies alike worry it could threaten UK climate targets.
• With any Labour lead government in 2024 pledging to “double onshore wind; triple onshore solar; quadruple offshore wind” and deploy the UK’s floating wind also, this pressure on the grid to connect more renewable assets is only set to increase. 
• The National Grid acknowledges the problem but says fundamental reform is needed.

Full length blog 

In the UK, there is a logjam of renewable energy projects seeking connection to the National Grid – the system of wires and transformers that transports electricity from where it is generated to where it is needed.  

The National Grid owns and operates both the electricity and natural gas transmission networks in the UK. 

The National Grid was privatised by the Thatcher Government in 1990 so that it is now a public limited company (plc).  This means it is a company listed on the stock exchange(s).  Before 1990 both the generation and transmission activities in England and Wales were under the responsibility of the Central Electricity Generating Board (CEGB).  

Wikipedia accurately reports “the National Grid plc is one of the largest investor-owned utility companies in the world; it has a primary listing on the London Stock Exchange where it is a constituent of the FTSE 100 Index, and a secondary listing in the form of its American depositary receipts on the New York Stock Exchange.”

The grid was built at a time when new connections came from a small number of large fossil fuel generators, commencing operation in 1935.  As the National Grid’s website records, the UK’s national electricity grid is “the world’s first integrated national grid”.  For the first time anywhere in the world, the National Grid consisted of seven linked regional grids covering the UK, rather than there being a myriad of small power stations around the country, near cities, towns and villages, to supply them with electricity on local grids. These regional grids were centred around large population areas of Birmingham, Bristol, Glasgow, Leeds, London, Manchester and Newcastle.  The National Grid made the supply of electricity in the UK more stable and cheaper.  

Post-World War Two, the National Grid was largely powered by a network of coal fired power stations located in and around the UK coalfields i.e., South Wales, Nottinghamshire, South Yorkshire, the North East and Scotland. Gas fired power stations were added.  In 1960, 90 per cent of the UK’s electricity was powered by coal.  The UK’s first windfarm, located on the windy Cornish coast, was connected to the grid in 1991.  Fast forward to 2019 and for the first-time low carbon electricity generation in the UK overtook electricity generation from fossil fuels in the period January to March 2019.

In the early evening of Monday 9 October 2023, official figures from the National Grid show the UK’s energy generation mix is made up of 3.9 per cent from coal fired generation; 51.4 per cent from gas; 3.2 per cent from solar; 6.7 per cent from wind; 2.8 per cent from hydro-electric; 12.7 per cent from nuclear; 6.9 per cent from biomass; 7.9 per cent from the various interconnectors (electricity cables under the sea that can import and export electricity to / from the UK) with Belgium, France, Ireland, Netherlands and Norway and 4.6 per cent from pumped storage.  

A crucial issue for the National Grid is how you get the electricity from where it is generated to where it needs to be. The UK’s windiest spots are not currently next to the areas with the highest population density. New grid connections need to move the electricity from the wind, solar farms and storage systems to the Grid which then supplies it to the end user. This is a massive infrastructure upgrade. New substations, overhead lines, underground cables are just some structures that have to be built beside new energy generating developments.  Industry sources estimate there are over 1,000 projects, worth more than £200 billion and with a total capacity of 176GW, in the queue to be connected to the grid.  Reaching the 2050 net-zero target requires all these renewable projects, and more, to be connected to the grid as soon as possible.  

As I write this blog on the evening of Monday 9 October 2023, I am attending the Labour Party Annual Conference in Liverpool.  Earlier today the Conference passed a motion re-committing the Party to re-nationalising the UK energy system – including the National Grid. The Shadow Secretary of State for Business and Trade, Jonathan Reynolds MP, immediately said Labour Party policy would not change and they “would not be nationalising the UK electricity system” if it forms a government after the next UK General Election.

With any Labour lead government in 2024 pledging to “double onshore wind; triple onshore solar; quadruple offshore wind” and deploy the UK’s floating wind also, as announced by Rt Hon Ed Miliband MP, Shadow Secretary of State of Climate Change and Net Zero, at the Labour Conference 2023, this pressure on the grid to connect more renewable assets is only set to increase.

So, what can be done to break the logjam of renewable projects wanting to connect to the grid?  

In fairness, the National Grid, which manages the system, acknowledges the problem but says fundamental reform is needed.

Without getting too much into the detail around the grid connection bid process for new power plants, and into the technical detail around battery storage and peak demand management and black start capability, in simple terms, Ministers (of whatever colour in the next Government) need to amend energy legislation to give the UK energy regulator, Ofgem, a new laser focus and associated powers to put achieving net-zero at the heart of every decision it takes. This would unlock vital green investment in our electricity network and help the UK get to net-zero as soon as possible.  

Update Tuesday 10 October 2023, 16.30hrs: If you thought this was a bit of a niche, rather “techy” issue, well maybe it is.  But it is important and as if to underline that point Rt Hon Sir Keir Starmer MP, Leader of HM Opposition, mentioned it in his speech to 2023 Labour Conference a little earlier, here in Liverpool.  He said towards the end of his speech “[We need] a new effort to re-wire Britain. The National Grid moving faster – a lot faster. Laying the cables our future prosperity needs.”

So perhaps reform of the grid and Ofgem will be a priority of a future Labour Government?

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Growing up in Doncaster in the heart of the South Yorkshire coalfield in the 1970s and 1980s, Chris Kelsey, Director, I&I, has followed the UK energy debate keenly ever since the 1984 miners’ strike.