Electrification: The local grid challenge

The electricity network is critical to decarbonising our homes – domestic heat pumps, electric vehicle chargers and rooftop solar panels all require a connection to the grid.

There has been extensive focus by policymakers on upgrading the transmission network, but less thought put into investing in ‘local’ distribution networks.

Electrification: The local grid challenge, created in partnership with the MCS Foundation, argues that local grid upgrades should become one of the UK’s critical infrastructure programmes over the next 25 years, with the bulk of the work delivered by 2040.

The National Infrastructure Commission’s Second National Infrastructure Assessment states that around eight million buildings in England (around 30% of the building stock) will need to switch from fossil fuel boilers to heat pumps (or other electric heaters) by 2035. However, our modelling shows that, without a programme of investment, almost half of all primary substations will be experiencing capacity constraints by then.

The report makes a series of recommendations for policymakers, Ofgem and distribution network operators to address the local grid challenge:

• The government should make upgrading the local grid in time for net zero one of the UK’s critical infrastructure programmes of the next twenty-five years to 2050.
• Ofgem should reform the price control process to require DNOs to plan and deliver a long-term programme of investment that will ensure the distribution network is ready for demand forecasts set in the upcoming Regional Strategic Energy Plans.
• The government and Ofgem should ensure local and national arrangements for flexibility are coordinated to optimise the system as a whole.
• DNOs should:
  • Use the mechanisms in their budgets for 2023-2028 to scale up local network upgrades.
  • Produce and publish data on capacity and constraints on their secondary networks as a key priority.
  • Accelerate development and roll-out of local flexibility markets.
  • Ensure local network planning is prepared for a reduction in diversity of demand due to stronger wholesale pricing signals and electrification of heat.
  • Deliver a streamlined, digitalised connections process.

To discuss this area of work, please contact Frank Hodgson.