UK grid poses the biggest challenge for renewable energy developers

Hitting net zero emissions by 2050 is a formidable goal, but for many developers in the energy sector, one challenge looms larger than most: the UK’s archaic power grid. This key insight emerged from Vattenfall IDNO’s recent networking seminar in London, where 95% of the 20 developers highlighted grid-related issues as their primary obstacle.

The Electricity Grids and Secure Energy Transitions report by the International Energy Agency (IEA) underscores that globally, grids are struggling to keep pace with the rapid progress in renewable energy development. This revelation highlights the urgent need for modernisation of grid systems, many of which haven't been updated since the 1960s and are unable to adequately manage the fluctuations in supply from renewable energy generation.

When it comes to working on a new project, the grid is definitely the biggest hurdle to overcome. Starting from timeframes for a connection and finishing with a lack of flexibility on the Dependent Network Operator (DNO) side when it comes to decisions over cable routes, design decisions, or selection of equipment.

Said Ian Chisholm, Head of Greenfield Development at Vantage RE

Capacity constraints are another major obstacle, with many renewable energy developers being told by their local DNOs that they must wait in a 15-year backlog of applications before being considered for a connection to the grid. Hamzah Ahmed, Network Infrastructure Lead at Amberside Energy, points out:

The grid often lacks the capacity to handle the influx of renewable energy. This results in bottlenecks that delay projects and increase costs.

For everyone in the energy sector, this is not breaking news but a frustrating, daily reality. The more important question is how renewable energy developers can thrive given the circumstances. According to McKinsey, achieving net zero will require extensive investments from both governmental and private funding. This includes scaling up renewable energy capacity, such as offshore wind and solar installations. Earlier this year, Ofgem and the UK government set out a plan for reforming grid connections and regulatory policy. While promising, these are long-term projects, and businesses can’t afford to wait. So, what is the solution?

Tangible opportunities and solutions

Historically, developers had to gain grid connections through the local DNO in the regions where they developed projects. But now, to introduce competition and reduce costs, Ofgem allows Independent Distribution Network Operators (IDNOs) to develop, operate, and maintain local electricity distribution networks across Great Britain.

Vattenfall IDNO, with over 100 years of specialist grid infrastructure knowledge, has energised more than 50 commercial grid connections, significantly benefiting renewable energy developers through competitive asset adoption values and other techniques that free up Capital Expenditure (CAPEX) and expedite project connections. Our Grid Connections Consultancy helps developers obtain grid connections faster while reducing costs. Services include reserving grid capacity, assessing design requirements, negotiating with landowners, and conducting compliance audits. Additionally, Vattenfall IDNO offers asset adoption payments for adopting new grid connections, freeing up funds for developers to reinvest.

At Vattenfall IDNO, we recognize the urgency of achieving net-zero goals, and that many businesses find it challenging to manage the intricate process of securing grid connections,

says Stewart Dawson, Managing Director of Vattenfall IDNO.

Understanding how we deliver value engineering, and alternative solutions which make difficult projects feasible is pivotal for renewable energy developers looking to drive business growth and sustainability, and especially important for the UK’s net zero targets.

Developers' POV

Developers at Vattenfall’s seminar stressed that without a stable policy environment, uncertainty will deter potential investors and delay crucial projects. Additionally, they called for enhanced resources for DNOs

By increasing the capacity and resources of DNOs, the industry can better manage the growing demand for grid connections. This includes streamlining processes and boosting workforce capabilities to handle the surge in renewable projects efficiently

Said Dan Sanderson, Technical Manager at Exagen Group.

Technological advancements were another focal point. Implementing smarter grid technology and long-duration energy storage solutions can significantly enhance grid capacity and flexibility. These technologies are vital for balancing the intermittent nature of renewable energy sources and ensuring a stable energy supply. Developers emphasized the importance of collaborative innovation, where solutions are developed and deployed through partnerships between developers, technology providers, and Independant Distributions Network Operators to overcome current grid infrastructure challenges, leading to a more resilient and efficient energy system.

Collaboration is key

When it comes to tackling the grid hurdle, the importance of innovation and partnerships between developers and energy experts cannot be overstated. The journey to net-zero is demanding but, with the right strategies, the UK can achieve its ambitious goals.