ESO leads the way with major initiative to accelerate connections to the electricity transmission grid

• New two-stage offer process will increase certainty for developers
• Updated modelling assumptions to reflect current connection rates as only 30-40% of projects in the queue go on to deliver and plug in
• Developing an interim option for battery and storage projects to connect to the grid sooner
• Five-point plan of action in the short term combined with longer term reforms will free up space in the queue and speed up connections

The Electricity System Operator (ESO) is initiating a five-point plan to update the existing connections process for the electricity transmission grid to complement its programme of longer-term reform.

THE SITUATION: The existing connections process was designed 20 years ago for a time when connections applications were made by a small number of large fossil fuel generators. Great Britain’s rapid and positive progress on decarbonisation particularly over recent months and years has led to an unprecedented number of applications to connect to the electricity transmission system. Connections applications come from a diverse range of generation and storage projects at varying sizes and scales across Great Britain.

The ESO Future Energy Scenarios modelling shows that Great Britain needs between 123-147 GW of low carbon transmission generation by 2030 to be on a net zero compliant pathway, and there is already 83 GW connected. As of February 2023, Great Britain had 257 GW of generation with contracts for future connection to the transmission system. That’s three times as much than is needed.

ESO analysis shows that only 30-40% of projects in the queue make it to fruition, but the queue operates on a first-come-first-served basis. This can result in projects further up the queue holding back those that are more readily able to supply Great Britain with the energy it needs, even if those further up the queue are not ready to plug in.

THE SOLUTIONS FOR THE SHORT TERM: The ESO already recognises that the existing process needs to change and be widely reformed to give investors and developers better certainty, to ensure we can deliver our decarbonisation targets at scale and to develop the evolved network we need for the future at the least cost to the consumer.

ESO’s five-point plan to speed up the current connections queue is as follows: 

1. Operating a Transmission Entry Capacity Amnesty until April 2023, allowing developers to terminate their connection contracts without incurring liabilities, freeing up capacity in the queue. 
2. Updating our modelling assumptions to reflect current connection rates and reducing the assumption that most projects in the queue will connect. 
3. Changing the treatment of storage, including batteries on the network to allow them to connect faster and free up capacity for other projects. 
4. We are developing new contractual terms for connection contracts to manage the queue more efficiently so that those projects that are progressing can connect and those that are not can leave the queue. 
5. And finally, we will soon offer an interim option for storage projects to connect to the network sooner, but with the caveat that they may be required to turn off more frequently when the system is under stress without initially being paid to do so.   

To begin initiating this plan, from the 1st March for applications received in England and Wales we will be implementing a new two-step process, this will reduce uncertainty for developers in the longer term as we apply our new modelling and storage assumptions. In Scotland, these changes will be applied without the need to implement a new two-step process.

WIDER REFORMS ARE NECESSARY: Further to these short-term actions, the ESO has already begun a programme of longer-term reform as part of its Connections Reform Project. The ESO recognises the challenges its connections customers are experiencing and is working with them and our other key stakeholders to address the challenges with existing connections process. The Phase 1 report published in December 2022 sets out the Case for Change and the ESO is now in the Design Phase to identify the longer-term reform solutions which will be set out in the coming months before implementation later this year.

The ESO has worked collaboratively with Great Britain’s Transmission Owners (TOs) to develop these crucial short-term actions and the wider reform work. The TOs are: National Grid Electricity Transmission (NGET), Scottish Power Transmission and Scottish Hydro Electric Transmission.

Julian Leslie, ESO Head of Networks and Chief Engineer said:

We’re evolving our network to make it fit for the future, to deliver net zero and keep clean power flowing to the growing number of homes and business across Great Britain, fuelling our economy.

We recognise the frustration some of our connections customers are experiencing and through this package of short-term initiatives and longer-term reforms we are determined to address the challenges with the current process which was not designed to operate the sheer scale of applications we are receiving today.