Is your project ‘needed’ for clean power?

The outlines of a very different landscape for developing projects and getting a grid connection, driven by the government’s ‘Clean Power Mission’, are now starting to become clear.

(Full disclosure: I chair NESO’s Connections Reform Steering Group – but all views are my own).

The National Energy System Operator (NESO) will, with government and Ofgem endorsement, consult on a new connections process in early November that will propose that only projects which are ‘ready’ and ‘needed’ or more accurately “aligned with CP2030”, will receive a firm grid connection offer.

‘Ready’ essentially means 1) has land rights and 2) has the finances in place. A £20,000/MW security or bond to get into the queue has been discussed but formal proposals have yet to come forward.

‘Aligned with CP2030’

This takes a bit more explaining.

NESO is expected in early November to provide advice to DESNZ on a plan to achieve the Clean Power Mission. This will set out how much of each technology is needed where by 2030 and is likely to give an indication of how much is needed by 2035 (by when electrification is expected to drive the need for much more generation). You could think of these as ‘technology pots’ – e.g. XX GW of solar in the South West of England.

Following the consultation and implementation of code modifications and licence changes required, the existing 700 GW plus queue of projects will apply to join the new ‘Gate 2’ queue and provide evidence that they are ‘ready’. (Note: All projects will have to apply to Gate 2 but NESO has been clear that projects already under construction and due to commission in 2026 or earlier will not be adversely impacted.)

Ready projects will ‘fill up’ each technology pot in each location – in order of their existing queue position (the “aligned with CP2030” bit of the process). Once a technology pot is full in one location, any further projects of that technology in that location will get an indicative grid offer. To obtain a firm offer they will need to wait until projects in the queue drop out, or for a future strategic plan to increase the size of the technology pots. Where a technology pot in a location is not full, that capacity will be held for a new project to come forward.

The obvious question is how large these technology ‘pots’ will be. NESO has indicated that there will be a 2025-2030 pot and a 2030-2035 pot. The table shows what technology development would be expected under NESO’s Future Energy Scenario Holistic Pathway for 2035, which gives an early indication of what the total pots up to 2035 could look like.

The 2030-2035 pot will provide a pipeline of projects with firm grid connections that could potentially advance forward to the 2025-2030 pot if projects drop out or are delayed. And it also provides flexibility to accommodate the next step in strategic planning: the Strategic Spatial Energy Plan, due in 2026, which will provide more detail and take us up to 2050.

Distribution

The new rules apply to projects connecting at distribution with over 1MW of export capacity as well as transmission. Currently DNOs ‘batch’ up connections and send them to NESO periodically who consider them as a batch. Its hard to see how the new Gate 2 process works unless each project is considered individually. That means new processes between DNOs and NESO to handle assessment of thousands of projects. The details of such a new process are, rather worryingly, currently absent.

One partial solution to this that Regen is putting forward would be to make the technical limits process that allows non firm connections ‘enduring’. Projects that are happy with the amount of curtailment they are getting would not require Transmission Impact Assessments  – although they would still count towards the CP2030 technology ‘pots’.

Local power

This process is all about meeting the government’s Clean Power mission set out in its manifesto. However, there is another manifesto commitment –  a Local Power Plan with an 8GW target. If the projects required to deliver the Local Power Plan are not included in CP2030 there will be no connection capacity available for them – which will severely limit the options for the government to meet this commitment. Regen’s view has always been that a transformation of the scale of clean energy will require us to take people with us and my colleague Fraser has written an article calling for local and community projects to be considered in CP2030.

Timescale

So when is this going to kick in? The current timescale looks like:

• (Very) early November 2024: NESO advice to DESNZ on Clean Power 2030 (indicating size and location of technology pots)
• Early November 2024: NESO consultation, with conclusions sent to Ofgem
• By end of 2024: Final Clean Power 2030 Plan (defining technology pots) published by DESNZ
• By end of March 2025: All the code modifications and licence changes required brought in
• From April 2025: Project developers have a window to put in their ‘Gate 2’ application – including whether they could meet an earlier connection date if they become available
• Summer/autumn 2025: NESO and the networks will take around six months to do a full review of the queue
• Before the end of 2025: New ‘Gate 2’ grid connection offers

The best place for more details is the recordings of the latest NESO connections reform webinars.

In conclusion

At heart, this reform is about getting more clean energy built more quickly, which should be music to the ears of developers and investors. However, such a fundamental change to the development process is inevitably causing uncertainty and concern. Developers will be asking themselves whether their projects are “aligned with CP2030” and the requirement to put down a significant amount of money at the point of grid connection will reshape the development sector. The more open consultation that NESO can carry out with industry over the next couple of months, the better.