Report: ‘Phantom’ power projects holding up grid connections in UK
One-fifth of all the generation capacity waiting to connect to the British grid is accounted for by projects with no planning consent applications, according to new Centrica research.
The energy giant commissioned research into the extent to which these ‘phantom’ projects are holding up the grid connections queue, which has grown longer in recent years, potentially jeapordising the nation’s ability to connect renewable energy capacity rapidly enough to meet its legally binding targets.
The research revealed that there are some 371GW of projects in the queue, of which 114GW worth have planned to connect before 2029.
Of these projects, 62GW are still in the scoping phase of development. This means that the developers are unlikely to have applied for – or been granted – planning consent. In some cases, developers may not even have the land rights.
Energy regulator Ofgem is set to decide in the coming weeks whether the National Grid Electricity System Operator (ESO) should be granted the power to remove projects from the queue if they miss key milestones. This could free up space for more viable projects.
Centrica’s research found that this change could result in the connection of an additional 12GW of renewable energy capacity by 2029.
The business is now urging Ofgem to make a decision as soon as possible and rule that the ESO should have these new, grid-unblocking powers.
Ofgem has been considering the change since July 2021. This May, Ofgem chief Jonathan Brearley pledged to deliver an urgent reform of the queuing system.
“The system was created for a different time when a small number of large projects were connected each year; our current approach is not fit for purpose and needs urgent reform,” said Centrica Group’s chief executive Chris O’Shea.
“Thankfully Ofgem has now recognised the need for action but every day we wait for action is costing consumers money. Urgently introducing an industry rule change and applying it to the current queue, so that existing phantom projects lose their place when they miss milestones, would show that Ofgem were helping to reduce costs for consumers, to drive the energy transition and to improve the UK’s energy security.”
Earlier this year, the ESO unveiled plans to accelerate grid connections for up to 10GW of renewable energy projects in England and Wales. Projects are being asked to enter a new agreement process to connect using newly added transmission network reinforcements.
The ESO is additionally set to offer the developers of 52 energy generation projects that are running behind schedule the chance to give up their place in the grid connections queue, without incurring cancellation charges.
Waiving these charges will cost around £40m, edie’s sister title Utility Week has been told by ESO and Ofgem representatives. These costs will be recouped through customer bills. The costs are stated to have been lower than initially anticipated.
The UK Government and National Infrastructure Commission are continuing to collaborate on planning reforms to speed up this process,
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