RenewableUK Cymru has called on OFGEM and National Grid to undertake “anticipatory investment” in Mid Wales to help solve the connectivity issues in the region.
The call comes as part of RenewableUK Cymru’s response to the Welsh Affairs Select Committee’s Inquiry into grid constraints in Wales.
Rhys Wyn Jones, Director of RenewableUK Cymru, said:
“We are facing a ‘chicken and egg’ situation whereby National Grid will not invest unless they have a request for a connection from a project, but nobody will do that because of the known connectivity issues in the region. Without a willingness on the part of OFGEM and National Grid for such works to be undertaken on an ‘anticipatory investment’ basis, it is difficult to envisage any progress being made. Projects will progress on a ‘piecemeal’ basis and it likely that progress will continue to stall.”
There are also grid constraint issues in South Wales, which will only be exacerbated by the future of Floating Offshore Wind (FOW), which will be looking for grid connections in South Wales. Potential resource for FOW in the Celtic Sea is estimated to be in the region of 15-50GW and The Crown Estate has already published plans to achieve ~4GW by 2035.
North Wales also has significant renewable energy potential both through active projects in development such as RWE’s Awel y Môr extension and potential development through The Crown Estate’s fourth round of seabed licencing.
Mr Jones continued: “We have been made aware of several examples of issues of developers not being able to obtain connection agreements in South and Mid Wales. If we are to achieve our target of becoming a Net Zero Wales, it is imperative that we address the issue of grid connectivity now. The amount of work needed to upgrade the grid will not happen quickly – planning something as big as this takes time – time that is fast running out.
“We must not forget the importance of using less energy. Although total demand for energy by 2050 is forecast to decline, demand for power will increase as we need more electric for things such as heat and electric vehicles. Electrification is expected to double power consumption. This means that planning for power infrastructure is equally, if not more vital, than prioritising demand reduction.”
RenewableUK Cymru also called on Welsh Government to set desired targets for specific technologies such as onshore wind and solar. The signalling of ‘desired outcomes’ would provide confidence to network operators as to the prospects for a pipeline of projects. This could also be underpinned by Welsh Government undertaking a widescale commercial leasing round for its public estate, setting the terms of tender to maximise economic and social returns to Welsh communities and Welsh Treasury, consistent with its aspirations. Taken together these measures are designed to inspire confidence in developers to submit applications and provide greater comfort to network operators that a secure project pipeline will materialise.
Industry also has a part to play and should signal its intent of its commitment to Welsh projects. In its submission, RenewableUK Cymru said developers should provide confidence to Welsh Government by detailing how they can collaborate more effectively with Government to develop innovative approaches to genuine community ownership, revenue sharing and other measures which maximise social value to communities and the Welsh economy more broadly. For example, consortia bidding, which strategically ties together prospective renewable energy developments with wider community / regional benefits will provide additional confidence to potential public / private investors that there is long term strategic intent to plan an integrated, flexible energy system.
Updating Ofgem’s remit to formally include Net Zero would be helpful in unlocking strategic investment in grid as it will allow Ofgem to make strategic decisions regarding decarbonisation. Particularly those that need to be taken to embed Wales properly within a broader functioning smart Net Zero-ready energy system.
Clarity about the thresholds needed to trigger the anticipatory investment, particularly in Mid Wales, would also be welcomed as this would signal confidence and could encourage new applications from developers and ultimately unlock Large Onshore Transmission Investment.
Upgrading the electricity grid will not just be required for renewable energy, RenewableUK Cymru is also concerned about its suitability to accommodate not just transport decarbonisation but also heat.
RenewableUK Cymru concludes the submission with a call for the creation of an Overall Energy System Architect role to co-ordinate the actions of UK Government, Welsh Government and Ofgem to improve grid capacity in Wales.