Decarbonising by 2030 – can GB achieve it?

00:01:03 – Kyle Murchie
Hello and welcome to another Roadnight Taylor podcast. I’m Kyle Murchie and today I’m going to be joined by Nikki Pillinger.

00:01:10 – Nikki Pillinger
Hi, Kyle.

00:01:11 – Kyle Murchie
And Pete Aston.

00:01:12 – Pete Aston
Hi Kyle.

00:01:13 – Kyle Murchie
Hi Nikki, hi Pete.

So, as we transition from summer to autumn and the nights are certainly beginning to draw in, the energy decarbonisation in GB has never been quite as hot a topic as it is right now. The bottleneck and the connections queue, unprecedented levels of planned electrical infrastructure, the need to decarbonise, geopolitical risks and the first change in Government for over 14 years are collectively driving quite a lot of change, and eyes are very much still focused on 2030. So today we’re only going to scratch the surface in this discussion, but through this podcast, we want to share some of our initial thoughts on decarbonising the grid by 2030, as the focus has changed over the summer. Quite important changes have come about over the summer period, so we want to share some of our thoughts on those.

So the first question I have relates to some new acronyms that have come out of the summer – CPP2030, and shortened to CP30, and it was sadly not CP30 in terms of the Government form which you can fill into register as a cider or perry maker. But what exactly is it? What are we talking about when we’re thinking about CP30 and CP2030?

00:02:29 – Pete Aston
Do you want me to answer that one, because it’s a really easy one, so Nikki can answer all the difficult ones. CPP, that basically stands for Clean Power Plan 2030; so this is the Labour intention of getting a clean power system by 2030. It was in their manifestos, now it’s come through into more sort of policy making that they’re trying to push forward pretty quickly. So yeah, that intention for a clean power system by 2030.

00:02:55 – Nikki Pillinger
It’s the Government’s objective and is often bandied around, clean power, net zero, renewable, low carbon – that sort of thing. Clean power isn’t very well defined. The strategic spatial energy plan is more of an ongoing strategy piece, it’s not particularly coming from Government as much as it’s coming from the networks, and it was something that was happening anyway, despite of the change of Government.

00:03:25 – Pete Aston
I would say that Strategic, Strategic Spatial Energy Plan feels to me like it’s sort of a longer-term program, because you’re still, you know, beyond 2030, all the way up to 2050 and beyond that you’re still going to need a plan for different types of technology. So, I see that as a much longer term plan and it probably needs to still proceed, whereas Clean Power 2030 feels more reactionary. Perhaps, you know, things are happening really quickly. Are we going to get sensible outcomes from this when it’s a really fast change? Whereas if the longer-term, Strategic Spatial Energy Plan has got a bit more time to put a bit more thought into it, maybe that’s going to be a better long-term outcome.

00:04:11 – Kyle Murchie
But it sounds like what we’ve heard this week as well, that the CP2030 will maybe build on what Connection Reform or TMO4+ was intending to do, rather than looking out to the kind of long-term view of what the GB energy sector looks like.

00:04:29 – Nikki Pillinger
So with Clean Power 2030, also National Grid are doing it. It’s essentially a piece of advisory work that they’re currently doing to Governments, so they, as NESO (as they will soon be) have been commissioned by Government to tell them what is needed in terms of network, in terms of policy and in terms of that sort of general framework for the energy system and how that will function and how they could possibly, a few different scenarios of how they could possibly get to clean power by 2030. As I said, clean power isn’t necessarily no gas, no coal, we will still have something called a strategic reserve, which is likely to be gas. But they want to get as far down the road as they can do to a mainly sort of nuclear renewables driven energy grid.

00:05:19 – Kyle Murchie
You’ve got GB Energy and you’ve got Central Government seemingly taking a bit more of a hands on role compared to what we’ve seen over the latter years. So, do we yet have a clear view of what each of those parties are going to be involved in or responsible for, particularly given NESO becoming another Government under-operated business?

00:05:38 – Pete Aston
Which is exactly right. That’s what the Government should be doing and going, this is what we want to achieve by when. NESO’s job is very much looking at that sort of like the FES Future Energy Scenario type work to go, what are the pathways of actually getting to clean energy 2030? What’s the mix of generation that’s required? How can we actually get there? Are there multiple options of getting there? And this is one of the things that I’m confused about at the moment, Kyle, is it like if you want clean power, do you go, okay, we want loads of solar and a little bit more wind, or do you go we want loads more wind than just a little bit more solar? Or you know, a half and halfway mix? So if the Government’s going to be putting technology limits in to try and make sure we get the right mix by 2030, you’ve got to decide that up front so that you get those caps in place, and that’s a really difficult one, I think, to try and work out. So is that really a NESO thing, I guess NESO can comment on, can you operate the system with a certain mix? But maybe it’s almost a Government level decision to go, we want a certain type of mix and what’s the criteria for the Government making that decision? I don’t know.

So yeah, I think lines are getting a little bit blurred, for sure.

00:07:01 – Kyle Murchie
It’s really interesting one actually on the technology mix that you raised, because when you then layer on, like the storage also becomes a bit more complicated with both generation and import requirements. But then when you layer on the additional complexity of more emerging technologies, the likes of hydrogen, the two energy vectors overlapping, you could be in a scenario where you either co-locate effectively generation and large demand as one solution, but then you might be triggering significant reinforcement to achieve that, or you don’t do the significant reinforcement but then you can’t have that balance, So there’s very significant numbers of ways to effectively create that model.

00:07:48 – Pete Aston
Yeah, and I think what’s still lacking is an actual definition of clean power by 2030 actually means, I think we’ve probably talked about this a few times, but Nikki was mentioning it just now – is it net zero by 2030? Or do they just mean cleaner than we are now by 2030? Because if it’s cleaner than we are now, that’s really easily achievable. If it’s complete net zero, I think that’s going to be really difficult. But again, it all depends on exactly what the mix of technologies that they think is required to get that.

00:08:23 – Nikki Pillinger
I think it’s also still to be defined. I think that was one of the things in the Clean Power Policy document was actually to define what clean power is. Like I said, we’ve got this strategic reserve, which isn’t but, to be fair, I only heard it mentioned on Monday but that is going to be the appreciation that we will actually still need things to ensure energy security and to ensure energy supply as little as possible. And clean power I think it’s probably meaning the same sort of thing as low carbon at the moment, in that it will certainly include nuclear, solar, wind, batteries, hydro, potentially even like carbon capture and storage and those sorts of technologies.

00:09:10 – Kyle Murchie
Yeah, certainly in carbon capture and storage and those sorts of technologies, the term low carbon was used quite a lot because it was highlighting that it could still be low carbon at the point of use, but you’re potentially still using a fossil fuel, or you might not be using a fossil fuel, you could be using a hydrogen, for example, but that hydrogen might have been created through some sort of soft fossil fuel. Again, it’s that chain we’ve seen as low carbon but not necessarily no fossil fuels. I think that distinction was quite important. Whereas, yeah, clean power it’s as if it’s got still quite a few, possibly means the same, but could still have a slight a different definition of its own.

00:09:49 – Nikki Pillinger
Yeah, and I think Government needs to be quite careful with that as well, because, having done an energy policy Master’s degree about a decade ago, there is that sort of very much that crossover between like renewable and low carbon and net zero and people not really understanding fundamentally what they mean or what the definitions are within Central Government.

00:10:11 – Kyle Murchie
It’s a really important one and I suppose, just in terms of timing, you know we touched on 2030 quite a lot because that’s it’s in the name, but what you know we’re almost at 2025. It feels, if we’re pushing into, you know, through autumn now, and it won’t be long before we’re into 2025, you know TMO4+ has now been moved back slightly. You know, earliest it would be implemented would be quarter two of 2025. So, what’s this likely to look like by 2030? Thinking about kind of investor confidence and, and I suppose the ability to actually facilitate additional connections by 2030, is that the right focal point?

00:10:53 – Pete Aston
I guess, for me this feels like if, if they, if the Government really wants to hit 2030, they need to come out with some very, very clear guidance on how they think they’re going to get there very soon because, like you said Kyle, 2030 isn’t very long away really. So if you include right the way up to the very end of 2030, that gives six years’ worth of development, which is not that long really when you consider most, you know 132kV projects probably, from starting them off to finishing them probably take at least three years. You know 400kV projects, if you start them now, they might get connected by 2030.

Some of these projects are going to take a long time to actually build, irrespective of any transmission reinforcement works that are required, which can easily take six years to work their way through the system. It’s very tight – so you’ve really got to focus in on those projects that are deliverable and then if the Government’s trying to set targets for certain types of technology, they’ve got to do that quickly. Otherwise the investors are not going to be in a position to actually proceed, and I think that’s the danger, and I think also the danger is we also need to look beyond 2030 because there is still a step to then decarbonise some of the rest of the systems within the UK like transport, heating and so on, which is going to require massive upgrades in the electricity system to do so. Yeah, you can’t just look at 2030 and do it. It feels like a little bit of last-minute cramming before an exam, you’ve got to then be able to live beyond the exam and still, yeah, do everything else as well.

00:12:32 – Nikki Pillinger
Yeah, this did come up a lot on Monday in terms of just if you’re just focusing on 2030 as a like a target date and then you’re not actually giving anyone else the chance to say, ‘oh yeah, your project’s important too, because we need it for 2031 or 2032 or 2033’. So I think ESO are aware of that, but that probably hasn’t actually translated into how it’s being implemented yet.

00:12:57 – Pete Aston
And then Nikki shared with us a blog that Merlin Hyman from Regen had put out, and he made a really good point as to ‘how do you create a system where developers are ready to develop projects quickly to replace projects that fall out the system?’. So, if you’ve got your 2030 pipeline and if you think you’ve got enough projects to meet clean power by 2030, some of them are going to fall away. So how do you get the other developers who also want to proceed but aren’t able to – just carry on like someone who’s going to stand in for you when you’re doing a performance on stage, you’re a double. So, how are you going to get those projects to come alongside, ready to slot in? So, yeah, I think that’s a really important one as well getting that queue system right

00:13:45 – Nikki Pillinger
Yeah, definitely. there seems to be this complete misconception from sort of DNOs and potentially ESO as well, that developers have this capability to spend loads of money on a project before they actually have certainty on it. People are not going to go and get planning or spend loads and loads of money on land options, which is an issue with Gate 2.

Fundamentally, it’s irresponsible of them to go and spend loads of money on development before they actually know when or if they can connect and energise

00:14:18 – Kyle Murchie
Alternatives are now being discussed, legal texts have been discussed and the working groups looking to vote on certain elements just in the next couple of weeks. What sort of additional complexity does this add on what was discussed on Monday? Is that going to significantly change what those mods look at in the window between now and implementation in Q2? Or is this something that would be added on later?

00:14:45 – Pete Aston
I think this changes the nature of it. I don’t know necessarily how it might change the sort of actual process for Connections Reform. But, if you like, Connections Reform was bringing in readiness criteria. So, it was like if you pass these certain readiness criteria you can be in the queue, being able to go to planning, getting land and so on. Now this is not just readiness criteria but it’s technology criteria. So you have to be ready and within a certain pot of technology to be able to then proceed. So I think that brings in all sorts of complexities.

How do I know I’m going to be in that pot? Do I only know that after I go through Gate 2? How is that administered? Or the first one who’s just outside the pot of technology that’s allowed? Where do you go from there? So do you get, are you on like a reserve list, a waiting list? That feels like a whole extra load of procedures that need to be incorporated somehow or other into this. So, is that too late for Connections Reform? Question mark don’t know. Nikki, I interrupted you just now because you were just about to speak before I did…

00:15:54 – Nikki Pillinger
No, that’s okay. It’s super difficult on podcast, isn’t it?

I think the main thing to pick up is that there’s two potential scenarios here and that this is something that they’ve only just started thinking about now, which is mildly concerning given the time scale.

But the new queue could either be formed of ready projects, as in projects with land rights that are needed by CP30 under the sort of spatial energy plans, and also ready designated projects, which are those projects that NESO deems critical to security of supply, which we can postulate that is probably offshore, wind and nuclear, or the new queue is formed of the ready projects, the ready needed projects, the ready designated projects and any other ready projects as well.

There’s also a few other sort of variables that they’re thinking about, like attrition, efficiency of network utilization, whether this is going to be locational or not, and anything to do with undersupply or oversupply of certain technologies. They were talking about maybe reserving bays for technologies that haven’t come along yet, that they think they want. So it’s up for grabs in a certain way. But if that sort of scenario one is chosen, so only the projects that are needed and only the projects that are designated, that’s going to have a huge impact on projects, because there’s going to be so many that just aren’t going to have the opportunity to progress.

00:17:53 – Pete Aston
Well, I gave the silly example as we were chatting before the podcast, what if the government turns around and says you can only install solar farms south of the M4 because that’s where it’s sunny? You know that’s got a massive impact on people who’ve currently got, who would have projects north of the M4 and, as developers, don’t know that yet that leads to some significant uncertainty. But, like I said before, that’s a really difficult decision for the Government to make. But you just rattled off a lot of criteria there, Nikki, so there’s almost like a matrix of 10,15 different criteria, potentially that to go ‘Are you allowed to proceed’? And that’s highly complex.

00:18:35 – Nikki Pillinger
Yeah, this does seem to be hugely overcomplicating an already very complicated process that is not well defined for distribution at this stage. For transmission it’s complicated enough, but trying to, and I think we’ll talk about this later, but trying to apply it to distribution is very challenging and not something that I’ve not really got any answers on how that would work on Monday.

00:18:56 – Kyle Murchie
What’s been defined as methodologies, so those will, the intention is that those will go through a consultation which would be November, December this year. But those will set out a lot of the actual detail, the kind of lower end detail, the processes and procedures, the rules etc. would effectively sit there rather than sitting in the code itself. There’s been lots of discussion about the pros and cons of that but, as I said, those would be methodologies that would have an approval process, so not like guidance. They couldn’t be changed kind of overnight sort of thing without industry input.

But at the moment that’s Gate 2 criteria is one, designated projects, which you mentioned there, Nikki, that’s another, and connections network design is the third, Obviously massive topics in their own right. But it feels like under the scenario two, where you’re still allowing the projects that are there, that are potentially ready, to remain in the queue, is that maybe just an additional layer then an additional methodology? It certainly sounds like scenario one would probably need more changes to the legal text if you’re actually almost excluding a complete set of projects and particularly applying that to the existing queues. Yeah, quite a lot of detail to be covered in quite a short space of time

00:20:08 – Nikki Pillinger
Yeah, it does… they said they think they can do it within the existing methodologies. I’m not quite sure how, but that’s the kind of the view at the moment is that they can utilise what they’re already doing in order to implement this.

00:20:22 – Kyle Murchie
Interesting. I suppose it’s one we’ll see evolve over the coming weeks and certainly within the process. Alternatives can also be put forward as well, that’s still something that we’re seeing coming through, so it’ll be interesting, off the back of this, whether there are any alternatives to the ESO’s proposal.

00:20:41 – Pete Aston
Is this going to be a lot more WACMs then, Kyle?

00:20:44 – Kyle Murchie
Yes, that lovely acronym. Yes, there’s lots of WACMs and I think the difficulty with Connections Reform and the two mods that we’re talking about – CMP434 and 435 – because they’ve got so many elements to them and one alternative could be everything as is with one change. It can become quite complex. You could end up by the end we might end up with a significant number of WACMs and combinations of WACMs that the group is in that process at the moment, but it will probably not become clear for another couple of weeks yet of exactly what the working group is going to put forward. But you’re right, there could be quite significant differences between those WACMs, which could then cause a bit of a kind of challenge for Ofgem in terms of being able to make that decision on which option is best.

Yeah, I think we could talk about reform all day, but I’m just thinking about that application to the existing projects and the existing queues. We’ve already said that the risk here is that if you’re an existing project, then potentially you’re no longer designated as being needed for CP30. Just thinking about the implications from a liabilities point of view. If you’re sitting there, obviously you’ve put significant costs into your project already, but are you now also on the hook for cancellation charges if you were to do a longer route to go forward.

00:22:04 – Pete Aston
Well, theoretically, if you have to terminate your offer because you can’t proceed, you pick up cancellation charges, don’t you? Which does seem wholly unfair because you were told you can’t proceed. But then I think we were talking about this the other day, Kyle, what if so many projects have to pull out that ESO no longer has enough securities in place, cancellation liabilities in place, to cover the cost of their works? But then you could argue if they don’t have enough projects in place in the queue to cover their works, then should they be doing those works anymore? So you can see arguments both ways, perhaps for sort of taking cancellation liabilities away from those customers who can’t proceed and leaving them in place. I think if you leave them in place and then those schemes cancel, I could see quite a lot of angry developers out there wanting to have a serious and potentially legal conversation with the ESO.

00:22:58 – Kyle Murchie
I suppose that’s a challenge because those liabilities are very varied. Some could be on attributable works but are quite far out in terms of actually the kind of far-reaching impacts that are going to be needed anyway for other customer or other projects coming in place. But if they’re associated directly with your project, the reinforcements have already been started to facilitate that. Yeah, you could definitely see both ways the argument that I’m being told to cancel but there’s therefore inefficient spends for the TOs because they’ve started work, potentially even building out to your connection point. I suppose that’s one of the questions whether there’s a bit of a cutoff, certain work’s already done, or there’s a certain connection date already guaranteed. Does it just happen in any case?

00:23:42 – Pete Aston
I guess the other thing is, with these criteria as to whether your scheme is needed or not, and designations and so on, is it just the case that you might not be needed for 2030, but you might still be needed between 2030 and 2050, for example? So, in that sense, could you be kept in the queue beyond that point and still proceed, because there’s other forms of generation going to be decommissioning over the next 15, 20 years aren’t there and the need for more power anyway? So, between 2030 and 2050. So, is it just a timing thing, rather than kicking out the queue and just saying we just don’t need you yet, rather than we’ll never need you?

00:24:25 – Kyle Murchie
Yeah, maybe that’s where an NESO designation can partly come in as well. If you’re in an area that CP30 says you’re not actually needed now, but you’ve already gone through the process of developing, you are ready to connect effectively, then maybe there’s an opportunity through what’s already been set out as an NESO designation, maybe allowing those sorts of projects to move forward because it’s still the most efficient spend from a national perspective. Particularly, as you say, if it might be needed in five years time, it would be a bit foolish to say let’s cut that project off and then require something else to come along in five years when you think all the risk of projects not being able to meet those requirements.

00:25:16 – Nikki Pillinger
I think the idea is that we, well, they certainly said on Monday that they are going to only really apply this to projects that actually have a transmission impact. So, obviously we have to go through the Gate 2 process again and it’s not really that clear to me how the transmission and distribution queue is going to be coordinated when everything in the queue is essentially resubmitted to Gate 2. That’s something really important that needs to be done properly. But ESO did say on Monday that they would not be applying this to any projects that didn’t have any transmission works applicable to them. So that would suggest to me that there’s going to hopefully be quite a few projects that can actually progress that now don’t have any transmission works associated with them and any project that’s slightly lower down in the queue, who haven’t really had any transmission works, they had those sort of lesser transmission works assessment results, they didn’t need a new GSP., hey might maybe need a new super grid transformer or something like that.

Even then, haven’t really had a lot of money spent on them, because all those SGT replacements are, as far as I can see, they’re 2028, 2030 to be completed. So they haven’t been ordered yet. So, in theory there shouldn’t be that many projects that have had that much money spent on them. Hopefully! I’m sure there’s going to be some outliers there. But yeah, hopefully there’s not a huge amount of projects that actually have that higher liability, and hopefully there won’t be that wasted infrastructure.

But yeah, that’s very much for ESO to look at and sort out, and make sure that they’re not allowing that to happen, potentially.

00:26:51 – Kyle Murchie
Yeah, it’s a good point. I think particularly at embedded. For embedded customers, I think that’s probably even more so where you’re going to have, as you say, projects that could potentially be turned around relatively quickly in the grand scheme of connections timescales. You know, if you’re looking at 33kV connection versus 400, it should be take less time for the 33kv connection in theory, but that barrier being upstream transmission works and certainly another thing that the GSP is obviously slowing those projects down and the ability for them to move forward.

I suppose, thinking about this and having looked at the slides also from Monday, that there is mention of embedded, but maybe one mention. But what was the discussion? Did it open up much about embedded customers or were they more of a footnote in that particular conversation?

00:27:43 – Nikki Pillinger
To be honest, I wasn’t a huge… I bought up embedded customers, as did a few people, in terms of how they’re actually going to be dealt with in this new process, and it is something that worries me quite a lot because there’s a process under Connections Reform for embedded customers to be considered, but with technology caps, depending on how it’s done, unless the DNO has some more power to say what technology they think they need or that they want, then the ESO is going to have to see each DNO project as an individual project, not an individual customer, but they are going to actually have probably have that visibility of individual projects at a DNO level that they haven’t had before. They’ve essentially just seen them as mod app submissions.

Yeah, very challenging to say what’s going on really, because I did ask, and apparently the ESO are having conversations with the DNOs that there was no clarity regarding how that was actually going to be administered, how DNO projects or embedded customers were going to be considered and how that was going to be made fair in the grand scheme of having a better coordinated transmission distribution queue and making sure the distribution customers are actually considered in these sort of technology caps and how that’s done for the smaller projects.

00:29:05 – Pete Aston
I think there’s another really interesting element to this at distribution level and potentially at transmission level, is the demand customers element. So, all this talk about Connections Reform and the talk about Green Power 2030 is just focused on generation schemes, but the impact of demand customers and the impact on demand customers is significant as well. So, if you think about it at transmission level, we’ve talked a bit about bay availability. There’s something of a resurgence of data centers across the country at present. Understandably, because with rollout of AI and so on, it’s just a thing. We need more data, and more data centers. So, they take up bays and in fact, most data centers want two connections, two bays, rather than a generator only needs one.

00:29:55 – Kyle Murchie
Three, with SQSS requirements.

00:29:55 – Pete Aston
We might get three, yeah.

So how do you balance the need as a Government to say, do you need more solar connections at transmission or more data centers, because maybe you can’t have both in the short term, if you don’t have enough bays. So that’s an interesting one. And at distribution level you’ve got the impact of actually all these accepted battery schemes have taken all the demand headroom up at a lot of GSPs. So that’s, you’re getting demand connections in quite a lot of parts of the country now that are a megawatt and above, being told they have to wait for transmission reinforcement.

That just doesn’t feel sustainable. So how do you build that in as well? To be fair, most demand connections are on the distribution network. How do you not stifle the economy by blocking housing developments, commercial developments and so on? So I think there needs to be that joined up picture. But say embedded, even embedded demand, generation schemes are currently being slightly brushed under the carpet in this process

00:30:57 – Kyle Murchie
Yeah, I suppose at least with in demand at transmission level, they are included in the TM04+ process. They are still going to be going through a gated process. Agree, there’s still all these challenges with can you have both and effectively those other markets and stifling GB growth and investment, more broadly. One thing that’s been raised on a number of occasions from an embedded perspective is that those embedded customers that are demand only aren’t included in the process. So while you might trigger off, as you say, upstream reinforcement, because you’re still sitting there alongside batteries that have already triggered demand, the demand will be treated as you know, it will effectively go through a mod app to the ESO at any time. It’s not following the gated process based on the current proposals. I think the intention is that will be better because you’re not implying the new rules or, you know, putting forward the new rules on embedded projects. But I think in reality, unless you map that through, you’ve still got, effectively, now got two systems that are working for demand, with some parties like batteries sitting across both, which I think will become quite complicated in certain circumstances.

I suppose bringing it back to clean power, the idea of industrial decarbonisation, which in most cases, the large number of projects are going to be a distribution level where parties are looking to decarbonise through some electrification and or maybe a move towards hydrogen. It becomes quite a tricky balance between decarbonising in that way or are we talking about decarbonisation through generation of electricity?

So it sounds like we’ve got a bit more work as industry to solve the challenges for embedded and, importantly, make sure it’s consistent. That’s another big aspect. It’s got to be consistent across all DNOs, otherwise we end up in a similar situation to maybe what we’ve had in the past, where Appendix Gs are applied in very different ways or timescales are different. I think we need to have that consistency.

But thinking even more broadly, then, what we’re talking about here is started off at connections level. We’re now talking about the industry effectively having a limit on certain technology types. Does that now effectively set the market? Or are we now, we’re going from nominally market on one side of the table and connections on the other to effectively facilitate the market requirements? Are we now seeing a bit of a combination of the two?

00:33:29 – Pete Aston
It feels like. It certainly feels like the market approach that’s been in place for quite a few decades now, to just a completely free-for-all, market-based approach, is now being squeezed into a sort of a mould set by the Government. Yeah, I think that the market has definitely been skewed and inevitably that will present itself in all sorts of different ways. I think in the short term that’s going to, you might well have known that you could have a chance of meeting a readiness criteria, but if you don’t know that you’re going to be a designated scheme or a needed scheme, are you really going to want to spend lots of money on developing this?

Yeah, I think it’s going to put some uncertainty in the short term.

00:34:06 – Nikki Pillinger
I think it’s huge, to be honest, this sort of departure from Thatcherite market-led economics that we’ve had since the 80s, since privatization of the networks yeah, that is a massive change. Sort of Labour Government has come in and said we are going to effectively pick winners which they have not done before, in terms of what technologies they think they’re appropriate. What kind of worried me was, among other things, one thing that concerned me was the attrition rate that is potentially going to be used by National Grids, because saying that a project is ready when it has land rights is not realistic at all. There are hundreds of other hurdles to get over.

Just because a project had land rights doesn’t mean it’s necessarily going to build. So what they need to make sure is that they have probably quite a large amount of oversubscription in these sort of buckets of technology that they’re talking about. In order to avoid them having said to the projects in these buckets, you are the ones that are going to build, here’s your firm connections and then discounting anyone else from the queue or keeping them at Gate 1, or putting the barrier so high that people can’t apply anyway. So, I think now it runs a real risk of actually us compromising energy security here. I think it can be a very blindsided thing to say we’re going to get to clean power by 2030, which is probably not realistic anyway, depending on what clean power means. We will certainly still need a strategic reserve and we need to figure out what that strategic reserve looks like, and we need to make sure that this doesn’t have a huge price impact on consumers because it hasn’t been well thought through enough.

00:35:51 – Pete Aston
I think there’s some other quite interesting outcomes of this and maybe this is slightly more loosely related. If you think about decarbonization of the electricity grid as a whole and if you’re a large demand user, for example, and you currently use a lot of fossil fuels on your site and you’re looking at all the problems with decarbonizing the grid and reinforcing the grid, you might go ‘maybe I don’t want to decarbonize by using the grid, maybe I want to look to have completely off-grid technology solutions’. Some customers might be looking at small modular nuclear reactors are coming on in the next five, 10 years. Maybe I can go completely off-grid with one of those or two of those or three of those or whatever. Do the grid issues drive other behaviours that are then outside of the electricity grid? I don’t know. That’s more slightly speculative, longer-term issue, but I think it’s an interesting one to keep an eye on.

00:36:51 – Nikki Pillinger
There’s always unknown factors, isn’t there?

I was just going to say. It’s always surprising what people can come up with, what unintended consequences can happen.

00:37:00 – Kyle Murchie

Absolutely, and I was just saying it’s something we are seeing, whether it’s private wire arrangements or those sorts of concepts have all been around for a while. But a bit more effort and kind of thought going into whether those can be solutions for decarbonization and kind of move to increasing electricity reliance on third-party connections rather than necessarily that reliance on the grid, which is, as you say, an interesting part of the mix. But is it an unintended consequence of perceived barriers to new connections?

Great, we could probably go on for another hour and chat through and try and solve a few problems, but I think we’ll bring it to a close there. Hopefully that’s been useful and informative. We will have other sessions and some of the topics we’ve touched on here will have other breakout podcasts or even webinars, but I think it leaves it for me to say thank you much to both of you. So thank you Nikki, thank you Pete. I look forward to joining you on the next one.

00:38:00 – Nikki Pillinger
Thanks Kyle.

00: 38:01 – Pete Aston
Thanks everyone.