00:05 – The hidden risk
The first theme we are going to look at is to do with temporary DNO connections. So, transmission connected data centre projects, so we’re talking quite big data centre projects here, typically data centres that are 200, 300 megawatts or more in size; they’re going to have 275kV or 400kV connections as their main connection, and that’s what’s going to provide the main power. But they can take quite a long time to deliver. So, in the meantime, developers might want some early power to the site, and the challenge here is actually getting that DNO connection in time, because the focus of developers is quite often on the big transmission connection, and oh, DNO connections are smaller, they’re easier, they’re not going to be a problem, oh, we don’t need to focus on that quite yet; but that’s where the problem lies because DNO connections can actually be quite challenging to deliver and need quite a lot of early engagement with the DNO.
In addition to the actual DNO works potentially being complicated, there is the added impact that a DNO connection can in itself trigger an assessment of the transmission network, particularly an assessment of the capacity at the grid supply point that’s feeding that distribution network. So, distribution connections can get quite complicated even if they’re smaller.
01:27 – Early power options
So, in terms of the type of connection that a developer is going to want to use a DNO connection for, I guess the first thing is a building supply, or construction supplies. So, the developers are going to want to get on site fairly early, potentially two or three years ahead of when the actual data centre’s going to be available, and they’re going to want to start building the buildings, and to do that, they’re going to need construction supplies for supporting all the building works that are going on, on site. So that will typically be a one-megawatt connection from the DNO, typically they’re not so difficult to get hold of, but they still need to be applied for in enough time, because you could expect six-to-18-month delivery time on a small connection like that.
The next scale up really that developers are looking for is early power for the data centre buildings themselves. So typically, the data centre developers will want, some quite large supplies for commissioning those big data halls that they’ve got, and capacities of 10, 20, 50 megawatts might be required maybe 12 months ahead of when the transmission connections available in order to start commissioning those data centre buildings. Now, if you’re looking at a connection of up to 50 megawatts at a distribution network, that’s really quite significant; there aren’t many customers that come on a distribution network at 50 megawatts apart from other data centres who are looking for like a permanent connection at distribution level. So, to come in and ask for a temporary connection of up to 50 megawatts on the distribution network is really quite a significant challenge; it’s going to be delivered typically at 66kV or 132kV and DNOs will typically quote two, three, maybe four years to deliver a connection of that size. So, it can’t just be done at the last minute.
03:16 – The consequences
So for the developers, not getting early power could result in loss of revenue, they instead of connecting their transmission connection on time, they could get delayed a year if they can’t actually get commissioned, and I guess the ultimate scenario is there is no temporary DNO connection available in time, and so, you know, all bets are off you have to then wait for your big transmission connection before you can start doing anything.
03:42 – Navigating the process
So at Roadnight Taylor, we’ve helped quite a lot of developers navigate this process, the first thing that we try and do to help developers get this over the line is early discussions with the DNOs, that will quite quickly need to move on to making an application for a connection to the DNO, and throughout all this, the aim is to try and unblock things for the developers, so the developers can proceed with what they want to be able to do.
And there can be lots of issues involved with these connections. There’s potential for reinforcement works required. So, it’s trying to dig into, well, what reinforcement works are required and why and, and trying to understand that. And most importantly, I think is timescales for connection – what’s driving the timescale? If it’s a four-year piece of work to do this, why? Is it because there’s a lot of reinforcement work required? Is it because they’ve got lay long lengths of cable or build substations, how can that be accelerated? Can it be accelerated by the developer doing some of the works contestably themselves using an ICP?
So, it’s trying to dig into all of those details, but the critical point is getting an application in, getting in the DNO queue, getting an offer back, and reviewing that offer, to try and understand that process.
If there is then a capacity restriction at the grid supply point, then there has to be a review by NESO and the transmission company to actually go, well, what’s the capacity headroom at the grid supply point, and there all sorts of things that can be looked at as to, well if there is a capacity restriction, can there be a capacity loan from someone else who’s not yet connected and won’t be connecting for four or five years? Can there be some non-firm connection arrangements, some inter-tripping? Or something along those lines. It’s really trying to dig into options, but as you can tell, when you start to get into all of this; it takes a long time before the DNO even puts a spade in the ground.
05:38 – Act now
Almost as soon as you’ve secured your transmission connection, if you think you need early power from the DNO, do it straight away. Don’t wait. Get on with it because it’s going to take a long, much longer than you think, probably to, to get that sorted. Apply early so you’re not going to miss any milestones for your own timelines. And I think it’s worth saying that whilst this is mostly applicable to sort of large data centres that are connecting at transmission level, this could potentially also be the case for other large transmission connected demand projects as well – hydrogen, electrolysis, or other types of projects, but for data centre developers, get those DNO applications in early for early power because it’s going to take longer than you think.
