The National Energy System Operator (NESO) will issue grid connection bids for up to 283 GW of projects in Britain by 2035.
Today (December 8), the operator published the first results of its reformed grid connection process. Before the new compounding methodology, the the queue of projects awaiting a bid was approximately 722 GWapproximately four times the capacity needed to meet the government’s renewable energy targets.
Developers who putting forward projects for a grid connection will receive a Gate 1 or Gate 2 offer. Gate 2 projects, which will have a connection date until 2035, will be split into Phase 1 and Phase 2, with Phase 1 projects receiving connection offers before 2030.
A total of 132 GW must be connected before 2030 (Gate 2 Phase 1). That’s when the government sets a target for Britain to have an energy system powered by almost 100% renewables, with gas primarily functioning to provide stability, according to the Clean Power 2030 plans.
After 2030, 151 GW will receive offers until 2035 (Gate 2 Phase 2) and 216 GW will receive offers Port 1 offerswith projects essentially being set aside unless Gate 2 capacity opens up as projects pull out.
The methodology by which NESO assigned projects to a connection date was the subject of investigation, with many developers saying the process was rushed. While it was common knowledge that that would necessarily happen be ‘winners and losers’.
Trade body for the solar energy and energy storage sector Solar Energy UK described the reforms as “painful but necessary”.
In a webinar hosted by NESO, Kayte O’Neill, the government agency’s chief operating officer, acknowledged there were challenges in the process that were “felt quite keenly.”
She added: “There will be disappointment, we understand that whichever way this goes, these decisions impact the work of businesses and people. Today’s results are underpinned by very robust internal and external assurance processes.”
153GW battery storage projects are being removed from the connection queue
That disappointment may be felt most keenly by battery energy storage developers, with 83 GW of Gate 2 offers issued and an oversupply of 62 GW in 2035. Of those with Gate 2 offers, 33 GW will connect in Phase 1, before 2030.
Due to the large number of future Battery Energy Storage Systems (BESS) deployed for grid connections, only those with ‘protected’ status (which had already made significant progress before the connection queue realignment and will thus retain previously issued connection dates) will receive offers.
Because only protected BESS projects receive connection offers, 153 GW of projects were not ‘prioritized’, received Gate 1 offers or were removed entirely. It is unlikely that there will be capacity for new BESS projects to connect between now and 2035. In addition, some protected projects will have been moved to a later date but will still be considered prioritized.
Long-term energy storage (LDES) projects are operating at full capacity until 2035, with bids based in part on when applications are submitted. The previous projects had priority and 5.6 GW was not a priority.
Undersupply of solar energy until 2030
There is a shortage of solar PV projects in Phase 1, with not enough submitted projects being considered ‘ready’. Some of the capacity of the distribution zones has been moved to connect during transmission, but in phase 2 there is oversupply in most zones.
The lack of solar offers in phase 1 (approximately 30 GW linked to receipt of offers) could be due to the rush to submit projects in time to meet methodological requirements, meaning that projects ultimately did not meet the readiness benchmark.
Commenting on this, Solar Media Market Research analyst Josh Cornes said: “Due to the pre-CP30 deadlines, especially the December 2024 deadline for plan submissions, we are seeing record high rejection rates, with more than 30% of projects submitted in December receiving a decision rejection.”
Cornes called the revelation that projects entering Gate 2 can be “kicked out” if planning is refused (which often does not mean a project will not be built, but does require an appeals process and therefore a delay in construction time) “an extremely harsh reality”.
Impact on construction of projects in Great Britain
The results for wind energy were largely as expected, with an undersupply of onshore wind energy in England and Wales and an oversupply in Scotland. In the webinar, Matt Magill, NESO’s Director of Engineering & Customer Solutions Transformation, said that while the operator was considering moving capacity allocation from under-supplied to over-supplied zones in Scotland, this was not considered a good value approach and the key determining factor in the connection offers awarded was whether planning had already been approved.
Due to the variation in technology requirements by zone, NESO said that for some hybrid or merged projects, only one element could be prioritized, which it described as a designed outcome.
NESO COO O’Neill said the connectivity security provided by the new queue will drive investment. However, some are wondering how to maintain interest in Britain in those technologies that appear to have no available capacity to connect in the next decade.
For example, in response to questions after the webinar, Magill noted that the oversupply of 60 GW of batteries means that a “significant volume” of projects would have to leave the queue if Gate 1 projects were to move to Gate 2.
However, there could be more room for change for other technologies. Figures from Solar Media Market Research show that there is around 33-34 GW of solar under construction, awaiting construction or awaiting a planning decision, the capacity required for the UK’s 2030 target.
A total of 35.9 GW of solar capacity was not a priority. Although some of those projects that received no offers may have come as a surprise, Cornes said this opens the door for progress in pre-planning projects before the next submission window “if they can get the schedule in time.”
The next window for Gate 2 connections will not open until the second quarter of next year.
Developers will have a 90-day period to respond to offers for transmission connections, and possibly less to respond to offers for distribution-level connections issued by distribution network operators in the coming days.
Developers were also urged to question the results as soon as possible, but only with evidence-based data or if they believe a process error has occurred.
