Let’s get energy moving to hit net zero targets
Examining the issues around unblocking the grid connections queue
Great Britain’s energy network is undergoing extensive change, as it transitions towards a decarbonised and net zero future. However, significant overhaul is needed to the grid connections process to ensure clean energy targets are met.
Currently, energy projects which need a grid connection must wait in a 'first-come, first-served' queue. The size of the grid connection queue and volume of new applications leads to significant delays. The backlog is partly due to ‘zombie’ projects (which have less chance of being built) blocking the queue for more progressed projects.
Although steps have been taken to remove zombie projects from the queue, the number of projects waiting remains significant. The queue size is expected to reach 800 GW across transmission and distribution networks by the end of 2024 (far more than required to achieve decarbonisation targets). This could leave some projects waiting for a grid connection for over a decade.
This has led to grid connection delays being called the biggest barrier to achieving the government’s upcoming target of Great Britain achieving clean power by 2030 (CP30).
The government is due to publish a plan on how to achieve CP30, which will include the necessary technology types and locations of energy projects. In November, the National Electricity System Operator (NESO) issued advice to the government on how to achieve CP30. NESO is a newly-established independent body responsible for electricity system planning.
Whilst the government is still considering NESO’s advice, it has committed to reforming the outdated grid connections process, working alongside Ofgem as energy regulator and NESO. The government has said grid connections reform will need to align with wider strategic plans to reach CP30.
To replace the current 'first-come, first-served' connection process, NESO has proposed a new process, known as TMO4+, for forming (and reforming) the connections queue.
TMO4+ will introduce two formal ‘gates’ to the grid connection queue for new projects. Under Gate 1, projects will be given connection offers which are not yet in full form. Then, only projects that meet the eligibility criteria under Gate 2 will be granted a position in the queue.
The Gate 2 eligibility criteria will require a project to demonstrate ‘readiness’ and ‘strategic alignment’. ‘Readiness’ relates the project having secured necessary land rights or planning consents. ‘Strategic alignment’ means a project must align with CP30, including in terms of technology type and location.
Under TMO4+, NESO has also considered the issue of zombie projects, which remain in the connection queue in the hope of being sold to a developer looking for a better queue position. To address this issue, NESO has proposed introducing a requirement for queuing projects to post additional security for transmission connections.
TMO4+ will apply to both new projects applying for grid connections, and to existing projects in the queue. Although the reforms are planned to be applied retrospectively in respect of existing projects, TMO4+ is proposed to be implemented from Q2 2025.
As the regulator, Ofgem must approve NESO’s proposals before they can go ahead. Ofgem intends to reach a decision on whether to proceed with TMO4+ by the end of Q1 2025. It will also need to implement various licence changes to enable NESO’s proposed reforms.
Whilst there will be challenges in clearing the bottleneck and in implementing new connection criteria, change is vital to get projects connected and to ensure clean energy targets are not missed.
Nick Shenken and co-author Nick Pincott are both Partners in TLT’s future energy team