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UK: Speed up renewable grid connections

electricity.jpgUK officials hope that revamped rules governing how power plants are connected to the nation’s power grid will help get new projects out of the queue and speed up the development of renewable energy projects.

Energy and Climate Secretary Ed Miliband proposed the new rules today.

At the moment, some 200 projects promising more than 60 gigawatts of new generation capacity — including 17 gigawatts’ worth of renewable energy — are waiting to be connected to the UK grid.

As part of the Government’s Low Carbon Transition Plan, presented in July, Miliband announced the Government would reform the previous system of projects getting a connection date on a first-come, first-served basis regardless of when the project would start generating energy. This meant some wind farms were given connection dates years after when they were due to start producing electricity.  Today’s consultation offers industry a say on three options for how the new system will work.

The proposed scheme is also intended to  give investors confidence that projects will receive a connection date that fits in with their project development timeline.

“Access to the electricity grid has been one of the key barriers to the generation of renewable energy in this country,” Miliband said. “We are determined to resolve this issue. That is why we took powers to do so in the Energy Act and today we are setting out our proposals.”

He continued, “We need these new projects to get hooked up to the grid as soon as they are ready — both to help tackle climate change and secure our future energy supplies. The Government will do whatever is necessary to bring about the transition to a low-carbon economy and to give investors the certainty they need so that new renewable energy generation is built.”

For the first time, the Government will be making the detailed reforms to grid access rules that are necessary to overcome the delays. Previously, reforms were proposed by industry and then approved or rejected by the regulator, Ofgem.

The Department of Energy and Climate Change is offering three proposed models that  build on industry and Ofgem’s work over the last year. The three models look at different ways to manage the queue and to share the cost of connecting more plants to the system.

The models are:

  • Connect and Manage (Socialised): Costs will be shared between all users of the network;
  • Connect and Manage (Hybrid): A model that targets some, but not all, of the additional constraint costs on new entrant power stations; and
  • Connect and Manage (Shared Cost and Commitment): A model that offers the choice to new and existing power stations to commit to the network (which is helpful to the grid in terms of long-term system management) in return for greater certainty over charges, or to opt out and be exposed to additional constraint costs.

Ofgem has already approved interim arrangements to help new power stations connect more quickly and, under these, interim arrangements around 1 gigawatt of renewable projects in Scotland have already been offered earlier connection dates.  However, this was only ever intended as an interim measure and Government is intervening to ensure enduring access arrangements are put in place by June of next year.

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