A new government body set up to invest in Britain’s electricity grid will only succeed if the “bottleneck around grid capacity” is cleared, according to a leading lawyer.
Prime Minister Andy Burnham has pledged that the new publicly owned company, Great British Grid, will speed up connections to the grid by driving up competition for connection projects.
The government wants to bring UK energy costs into line with other European nations within ten years but the announcement comes against a backdrop of another predicted spike in energy prices, with bills predicted to rise by 16 per cent this winter – the biggest increase for four years.
Great British Grid will invest in and compete for transmission projects alongside the three companies that currently own and manage the UK’s grid. The aim is also to make it easier for businesses waiting to be connected to the grid to finance connection infrastructure themselves, with GB Grid supporting and potentially co-investing in projects alongside them.
The Government says Great British Grid will allow households and businesses to benefit from faster grid connections, greater energy security and lower costs.
Laurence Lacey, partner in the commercial property team at national law firm Clarke Willmott, who heads up the firm’s energy, infrastructure and natural resources team, says access to power remains one of the biggest constraints on economic growth.
“From a time and cost perspective, anything that gives developers greater control over the timing and delivery of connection works is likely to be welcome,” says Laurence Lacey.
“Delays to grid connections increasingly affect housing, industrial, logistics, data centre and renewable energy projects alike. The ability to procure and deliver connection infrastructure directly could help unlock projects more quickly and at lower cost.
“The bigger question, though, is the underlying issue of network capacity. The challenge is not simply obtaining a connection, but the need for substantial reinforcement of the wider transmission and distribution network.
“New substations, transmission lines and grid upgrades are required on a significant scale – this is where the estimated required investment of £70 billion in transmission networks over the next five to six years is key.”
Laurence Lacey says the success of Great British Grid will ultimately depend on how larger reinforcement projects will be accelerated, rather than changing who delivers the final connection works.
“If this crucial issue is addressed, these proposals could be a meaningful step towards unlocking investment and supporting the UK’s energy transition.
“If not, the industry may find that connection works move faster, but that the bottleneck around grid capacity for that connection remains in place.”
For more information, contact Laurence or the team by getting in touch online.
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