Jason Chandler, Managing Director of Transmission & Distribution at Burns & McDonnell, argues that the UK’s biggest risk now is leaving new renewable capacity stranded behind a slow, stop-start grid and planning system.
The Government has consistently emphasised economic growth as its number one priority, and, through its Industrial Strategy, has identified the sectors it considers as being the best route to higher growth, including clean energy industries.
Working in energy infrastructure, Burns & McDonnell is acutely aware of the revolutionary potential of the sector, and the UK’s capacity to be a world leader in it. However, it is clear that the sector faces challenges. The UK is building renewable and net zero energy generation at pace, but is not connecting this into the grid at sufficient speed.
This is directly impacting the UK’s ability to achieve the Government’s target for clean power by 2030, as set out in the Clean Power 2030 Action Plan. Globally, there is growing public scepticism about, and political resistance to, the energy transition. To buck this trend and show that its ambitious targets on decarbonisation are feasible, the UK must see that the significant renewable generation it develops each year is connected to the grid as quickly as possible.
For the firms delivering this infrastructure, and their supply chains, the problems with the current system are obvious. Project-by-project approval, a temperamental planning system, and sudden peaks and troughs in investment make it difficult to plan ahead. Those in the supply chain are loath to build up capacity that they end up not using, meaning that when investment is made available, it is not always deployed in the most productive manner.
The stop-start nature of many projects is a barrier to investment, and an impediment to getting projects off the ground. By contrast, certainty of investment would allow firms to invest in their workforce, grow their capacity and deliver more much-needed infrastructure. In an atmosphere where geopolitical shifts mean that government policy can change suddenly, agendas that show conviction are vital to giving investors confidence.
This has not gone unrecognised, and earlier this year, the Government set out its priorities for infrastructure over the next 10 years, as part of its 10 Year Infrastructure Plan. It includes plans for an ‘Infrastructure Pipeline’, a ‘dynamic list of infrastructure and construction projects and programmes being progressed and planned over a ten-year period’.
The Planning and Infrastructure Bill, which is in its final stages of Parliamentary scrutiny, will implement a strategic planning system that requires the National Energy System Operator (NESO) and the distribution network operators (DNOs) to have regard to strategic plans, such as the Clean Energy 2030 Plan, in relation to their activities in managing the connections process and connection applications. This more aligned approach should provide more certainty in seeing that applications for connections will be approved, and funding provided.
DNOs are already embracing this approach as a way of managing the Transmission & Distribution industry through the shift from the RIIO-T2 to the RIIO-T3 regulatory period. National Grid Electricity Transmission (NGET) has launched its ‘Great Grid Upgrade’ programme, a series of 17 major projects that will enable the electricity network to take on more renewable power. The programme offers participants long-term investment commitments, giving both investors and the supply chain the confidence and stability needed to scale up for the UK’s energy transition.
If these efforts to streamline processes and improve certainty are successful, industry and investors should be more comfortable building up capacity. It will also give them more flexibility to invest in training and skills, reducing the impact of the skills shortage that is hampering projects across the UK.
Engineers, architects and planners are thinking creatively about how to resolve the growing demands being placed upon the UK’s energy infrastructure, given that its growth will underpin the success of so many other elements of the economy. As the Government progresses its plans on growth and infrastructure, it will be important to monitor its progress on these actions to confidently advance projects that support the growth and security of the clean energy and technology sectors.
