National Grid has announced a wide range of policies and investments aimed at upgrading the U.K. and U.S. grid systems and tackling the backlog of energy projects waiting to be connected. While this is optimistic for the energy infrastructure of the two countries, climate activists are concerned that some of the moves may deter investment in renewable energy projects as the connectivity outlook remains uncertain. In addition, energy experts have repeatedly stated the enormous magnitude of the task of upgrading the U.K. and U.S. grid systems, with a multitude of challenges standing in the way of achieving the goal.
This month, National Grid announced it would be investing just over $52 billion by 2026 in the U.K. and the U.S. in its five-year spending framework, which is nearly $2.5 billion more than it had stated in May. There is currently a significant backlog of renewable energy projects that are waiting to be connected to the U.K. grid. Even with this boost in funding, National Grid CEO John Pettigrew said that "fundamental reform" of the UK's electricity network planning is needed to solve the issue.
The U.K. government announced aims to run its grid on entirely green energy sources by 2035, yet many renewable energy projects have been told that it could take between 10 and 15 years to connect them to the grid. According to Pettigrew the queue of green projects increased by 50GW in the last quarter to make a total of 400GW. This is far higher than the U.K.'s existing power capacity of 65GW. However, many of the projects planned in this queue may not move forward.
National Grid has been attempting to tackle the obstacles to new green energy connectivity in a range of ways. The company has offered an "amnesty deal" to energy developers, aimed at encouraging developers to keep progressing their projects or otherwise leave the queue with no financial penalty. This is thought to have reduced the backlog by 5GW, although critics worry that this could reduce investments in the U.K.'s green energy sector. The company has also worked with the regulator to adapt existing rules to allow developers to build their own grid connection, which could reduce the backlog by around a further 40GW.
Pettigrew believes it is vital that the U.K. government stop its first-come, first-served approach to the queuing system and, instead, increase the standards that need to be met for developers to make a grid connection application. National Grid has increased its investment in 17 major onshore and offshore transmission projects in the UK after energy regulator Ofgem fast-tracked the projects.
Both the U.K. and the U.S. are struggling to upgrade their grid systems in line with the acceleration of the renewable energy capacity in each country. Several energy experts suggest that most U.S. energy infrastructure requires a complete overhaul following decades of neglect and complicated divisions across state and regional lines. Due to the widescale fragmentation of the U.S. transmission line network, many energy companies have been at a stalemate when it comes to upgrades. It is useless to make improvements to the energy network in one state if the neighbouring state refuses to make improvements on its side, meaning that many of the country's transition lines have been long neglected.
In the U.K., achieving the government's aim of net-zero carbon emissions by 2050 will require a transformation of the country's grid system on a scale that has been seen since the 1960s, according to an analysis by Regen Power. Upgrading the grid will allow millions of households to install heat pumps and EV chargers, as well as encourage greater investment in the clean energy sector. Yet, in 2022, Ofgem cut the budget for grid investment proposed by network operators by 17 percent, a move that Regen believes is highly risky.
However, National Grid believes it is up to the task of upgrading the U.K.'s grid system, announcing earlier in the month plans to speed up the connection of clean energy projects to its electricity transmission and distribution networks in England and Wales to 20GW. The company said that 19 battery energy storage projects, with a combined capacity of around 10GW, would be given dates to plug in, averaging four years earlier than stated in existing agreements. Several clean energy projects, particularly wind and solar projects with battery installations, will be offered faster connections to the transmission network, which could bring forward another 10GW of clean energy projects.
The president of National Grid Electricity Transmission, Alice Delahunty, stated, "Bringing these battery projects forward is one of a range of actions that our electricity transmission business is delivering alongside the system operator and wider industry to unlock clean energy capacity in England and Wales."
Despite the huge backlog of clean energy projects waiting to be connected to the grid and significant scepticism over the effective upgrade of the U.S. and U.K. grid systems, National Grid is optimistic about the potential for an adequate grid transformation. It believes that a boost in funding alongside the development of suitable policies for connecting new projects to the grid could create the environment required for effective transformation in the coming years.
By Felicity Bradstock for Oilprice.com
Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK. More
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