Ofgem announces tough new policy to clear ‘zombie projects’ and cut waiting time for energy grid connection
New rules to speed up electricity grid connections for viable projects and allow stalled or speculative developers to be forced out of the queue have been announced by Ofgem.
The change is a big step away from the existing ‘first-come, first-served’ system, which has led to a long queue of energy projects which could generate almost 400GW of electricity – well in excess of what is needed to power the entire British energy system.
The new queue management milestones will be implemented by the UK grid’s operator, National Grid ESO, from 27 November 2023 and will be introduced to both existing and future grid connection agreements. This will terminate stalled projects that are blocking the queue for high-voltage transmission lines and means ready-to-go generation and storage to enable net zero can be fast-tracked.
The rule change will give National Grid ESO the power to introduce strict milestones into connection agreements and terminate projects if they do not hit them at each project stage. The ESO will publish guidance on 27 November on how it will use its powers with first terminations likely to happen as early as 2024.
It comes after Ofgem’s CEO Jonathan Brearley said in May that urgent reform to the connections system was vital to unlock new investment and hit national targets – 50GW of offshore wind capacity by 2030 and 70GW from solar by 2035.
Yesterday’s announcement comes ahead of a joint connections action plan which Ofgem and DESNZ (Department of Energy Security and Net Zero) are due to publish later this month. It also comes ahead of the government response to recommendations to halve the time to build transmission infrastructure by the then Electricity Networks Commissioner, Nick Winser.
It also builds on National Grid ESO’s five-point plan, which includes near-term initiatives with Ofgem support that will create capacity and acceleration of connection dates for transmission projects.
Eleanor Warburton, Ofgem’s Deputy Director for Institutions for Net Zero Energy Systems Management and Security yesterday said:
“The transition to net zero demands urgent changes to the electricity connections system – or we cannot unlock investment, speed up network build and accelerate new technology.
“This is a big step towards phasing out the first-come first-served queuing system. We want new power on the grid as quickly as possible, so if you’re ready, you can connect sooner. If you’re not ready and are blocking the progress of others, you’ll be removed – you can’t sit on the queue with no consequences.”
Julian Leslie, Chief Engineer and Head of Networks at the ESO yesterday said:
"We warmly welcome these new rules approved by Ofgem enabling us to proactively terminate zombie projects in the connections queue. This is a milestone moment in the ESO's efforts to lead the transformation of the grid connections process, making it fit for purpose for a modern network that is rapidly evolving and decarbonising.
“The ESO will be uncompromising in our approach to driving out projects that cannot meet their connection date, paving the way for more viable projects that have a real chance of plugging into the grid, energising the UK economy.”
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