The Energy Transition | NGED announce plans to release 10GW of grid capacity
Published on 18th Sep 2023
Welcome to our top picks of the latest energy regulatory and market developments in the UK's transition to net zero.
This week we look at the recent announcement on grid capacity for power generators, the new UK-Irish energy transition cooperation agreement, industrial decarbonisation funding awards, and more.
NGED announces 10GW of grid capacity for energy generators with projects primed to kick off
National Grid Electricity Distribution (NGED) has announced plans to release 10GW of grid capacity for renewable energy generators and battery storage projects. The announcement follows a sustained period of engagement with stakeholders, including National Grid ESO (NGESO), Ofgem and the UK government.
The new agreement with NGESO provides projects that need further transmission network reinforcement the chance to connect under an interim, non-firm connection agreement. These interim agreements could be dispensed with when there is too much generation in the system, such as on the sunniest and windiest days, and in the long term they will be replaced with firm connections.
NGED also announced that, from October, it will be replacing the current "first come, first served" connection model with a "first ready, first connected" approach. The hope is that this approach will accelerate the connection of low carbon "shovel ready" projects, boosting the UK's progress towards net zero – and without prejudicing those that are progressing but need more time to connect.
Cordi O'Hara, president of NGED, stated that making it quicker and easier for our customers to connect to the network is a priority. O'Hara said: "With the volume of new connection applications soaring as the UK moves at pace to deliver net zero, we know a ‘fit for the future’ connections process will be vital to meet current and future demand.
"The changes we’ve made will not just allow some customers to accelerate their connections dates but will allow a more agile approach to managing connections requests. Reforms like these are a pivotal part of the country’s ability to install the renewable generation it needs to decarbonise the electricity system by 2035.”
NGED will be contacting customers to express their interest and hosting engagement events throughout September and October.
Energy co-operation agreement launched between UK and Ireland
The UK and Ireland, in an effort to harmonise the development of renewable output, have announced two new memorandums of understanding on future energy transition co-operation.
The UK's new energy security secretary, Claire Coutinho, and Ireland's minister for the environment, climate and communications, Eamon Ryan, signed both memorandums which renew a joint focus on driving forward decarbonisation efforts and maximising energy security. The memorandums of understanding commit the UK and Irish governments to collaboration on a number of flagship projects set to benefit clear energy provisions throughout the UK and Ireland.
Areas of co-operation have been set out, with priorities including:
- Offshore and onshore renewables.
- Electricity interconnection and transmission system infrastructures.
- Renewable, low-carbon hydrogen developments and opportunities, with a particular focus on electrolytic hydrogen produced from renewable sources.
- Opportunities for cooperation and information sharing on developments across the hydrogen value chain.
The memorandums indicate that these points of cooperation are not exhaustive and the governments will seek to maximise the sharing of sector and technological knowledge between each other.
Coutinho said that the UK and Ireland were committed to boosting energy resilience and reaching net zero, and would work more closely together to achieve their shared energy goal. She added that the agreements would "deepen our energy partnership with Ireland, to deliver cheaper, cleaner and more secure energy to our homes and businesses, and grow our economies."
Government awards £46m in funding to industrial decarbonisation projects
Successful bidders on a number of government competitions have each received a share of nearly £46m in funding to enable them to develop their industrial decarbonisation projects and support the UK government's move towards net zero by 2050.
The Department for Energy Security and Net Zero has announced the 26 successful bidders of three government competitions to cut emissions: the Red Diesel Replacement Competition, the Industrial Hydrogen Accelerator Competition and the Industrial Energy Transformation Fund. These programmes sought to support efforts to cut emissions from industrial and manufacturing processes in the UK, an industry that the government estimates makes up 16 per cent of UK emissions.
Recipients include engineering firm Danfoss, which received almost £5m for its test pump and motor system in an excavator at a quarry site, and data centre provider Digital Realty, which was awarded £735,000 to support energy efficiency upgrades to coolers in their data halls. Malting company Simpsons Malt received over £3.5m for a low carbon energy centre at Tweed Valley Maltings in Northumberland.
The largest funding award of £6.3m went to clean-tech firm Catagen to support its efforts to produce green hydrogen and e-diesel for industrial vehicles in Northern Ireland.
The government said the awards would enable the UK to meet its international targets, boost local growth and help cut business's energy bills. Amanda Solloway, minister for energy consumers and affordability, said businesses would have all the support they need to power the UK's transition to a cleaner, cheaper energy system. She said: "Our funding will support ground-breaking projects in malting, construction and manufacturing so businesses can incorporate green energy into their day-to-day operations."
Ofgem publishes open letter calling for transmission charges to reflect forecast future network
Ofgem has published an open letter to the industry on the rationale behind proposed strategic reforms of Transmission Network Use of System charges.
In the letter, the regulator suggested that locational transmission charges should not reflect the current configuration of the network but how the network will look in the future, with charges needing to be derived from a model able to reflect wholesale, balancing and flexibility markets.
Ofgem noted that this will require a "major transformation of the technical systems" upon which the operation and wholesale markets are built, but, without the overhaul, transmission charges will likely conflict with other market price signals and cause "inefficient" behaviour to the detriment of the system operation as a whole.
Ofgem seeks stakeholder engagement on this issue by 15 November 2023 ahead of an expected further consultation later this year.