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Grid Capacity – the UK’s Construction Sector’s Roadblock to Net-Zero
The UK construction sector has been making significant strides towards electrifying its practices, in a broader effort to adopt carbon-free designs, materials and machinery. But with clean power demands surging at an unprecedented rate, many businesses electric transformation is being put on hold after being struck with critical delays when attempting to secure a connection to the UK power grid. “Most businesses’ existing grid connection will not be sufficient to deliver the power for net-zero operations,” explained Suzanna Lashford, manager of Business Development, at energy and infrastructure specialist company Vattenfall. “This means one of two things: Securing a new, second grid connection, or upgrading the existing connection to provide more power. Either option places additional loads on the local electrical grid, which is where capacity issues arise.” The National Grid is warning those looking to secure new connections in England and Wales that they will have to wait in line behind some 600 other projects – collectively compromising of 176 GW of energy – with only 64 GW of connected capacity available. Jonathan Brearley, chief executive of Ofgem, labelled the extensive backlog as “simply not acceptable” in a recent press conference, highlighting that 20% of generation capacity in the transmission queue will have to wait for 10 years before they reach their offered connection dates, while 40% have been offered dates beyond 2030. The construction sector currently accounts for 39% of global greenhouse gas emissions, with 28% coming from operational use (heating, cooling and lighting), and the remaining 11% from embodied emissions (materials and building processes). Grid capacity limitations are thwarting the efforts of companies who are ready to play their part in decarbonizing the sector, and delaying millions of pounds (dollars) of private investment. While at the same time putting the brakes on the UK energy sector, which is not compatible with the UK government’s targets for renewable energy generation. “If UK wants to meet its targets, wider plans must be initiated to improve capacity and lessen delays. Connections would need to be looked at on a regional basis to enable the UK to analyze where demand is, and place generation close to demand to help stabilize those local areas,” commented Suzanna Lashford. Following outrage from UK businesses, the National Grid’s Electricity System Operator (ESO) has now implemented changes that they claim will shorten delay times, such as making it easier for projects to leave the queue and without penalty. New methods also include introducing a 2-stage connection process and tighter queue management, to help remove “zombie” projects (those which are taking up space better used by projects that are ready). But it will be a long time before the results of these changes come into fruition, and many developers are still (and will continue to be) faced with delays that will extend a decade into the future. For developers who cannot afford longer times scales or significantly higher fees for a grid connection, partnering with an Independent Network Operator (IDNO) can offer an alternative route to secure the required power. These Ofgem (Office of Gas and Electricity Markets) regulated businesses work alongside ICP’s to reserve grid capacity for free on behalf of their clients, and contribute to the costs of designing and building an electrical network through an Asset Adoption Value (AAV) payment, which can significantly reduce the developer’s total capital cost. “AAV payments to discount capital expenditure are not possible through a DNO, they are entirely unique to IDNOs. Vattenfall IDNO has recently taken on a partnership to power a new 18.6 ha food park in Norfolk with an upgraded grid connection and a new 132 kV substation to provide 30 MW of import capacity and 50 MW of export. For this client, the AAV was integral to financing the £4.5 million ($7.7 million) project and offering a return on investment,” said Ms. Lashford.
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