National Grid’s five-point plan was launched on 27 February 2023 with the aim of “fundamentally reforming the connections process to make it fit for the future”, including accelerating the connection dates for energy storage projects. National Grid (NG) recognised the challenges posed by the lack of capacity and lengthy timescales surrounding proposals for new connections and set out to improve the process. The five-point plan consists of the following:
- Amnesty: NG allowed its customers to terminate its existing connection agreements at minimal or no cost, thereby helping those who are ready to proceed with a development to move further up the queue. The amnesty closed in April 2023 and helped alleviate pressures within the pipeline of projects by re-introducing 8.2GW of distribution capacity for customers with “shovel ready” projects.
- Background modelling assumptions: NG updated how it calculates project connection dates. NG is now reviewing and updating existing contracts with these new assumptions.
- Storage: Batteries and other energy storage technologies soak up energy generation when connected to the grid as well as releasing it back onto the grid. As this technology has a dual purpose, NG has changed how they calculate their impact on the system.
- Contract terms: NG developed new contractual terms for connection contracts to manage the queue more efficiently, so those projects that are progressing can connect and those that are not can leave the queue. The final report to Ofgem was submitted on 07 June 2023.
- Interim offer for battery energy storage systems: NG will be enabling energy storage projects to connect to the grid more quickly. This will speed up connections for up to 95GW of energy storage projects in the pipeline to ensure system security.
The five point plan has led to NG announcing last week – in relation to the West Midlands, East Midlands, South West and South Wales regions – that it has identified 10GW of grid capacity which it will release soon, primed for the connection of renewable energy assets including solar farms, onshore wind and battery storage projects. Projects will be offered the chance to connect now under an interim, non-firm connection agreement, which will be replaced by firm connections as capacity increases.
From October, NG will replace the current “first come, first served” connection model with a more dynamic “first ready, first connected” approach. NG will also be holding a series of webinars and engagement events throughout September and October.
NG has other plans too which aim to improve the application process in the long term. In the meantime, the above steps should usher in a speedier, more efficient connection process which can adapt and deal with the fast-changing and more varied technology which the old system was not designed to handle. Given the uptick in electricity use, there are now more opportunities for landowners, investors and developers to create new battery storage projects to reinforce grid capacity and generate profit.
With the fast pace of change in the industry, it is important that businesses obtain sound advice whether they are a landowner, developer or funder. If you require assistance in relation to a proposed energy project , please contact Beth Margetson, Phil Hunt or Jack Cook in the Commercial Property team. 0121 2367388.