Guest series with Merlin Hyman, Chief Executive, Regen and Joe Colebrook, Head of Grid Connections, Innova

00:00:05 – Pete Aston
Hello, and welcome to another episode of the Connectology® Podcast from Roadnight Taylor, I’m Pete Aston, and I’m very excited to be joined by three wonderful guests this morning. We have Nikki Pillinger, my fellow Connectologist® from Roadnight Taylor, we have Merlin Hyman – Chief Executive of Regen, and we have Joe Colebrook, Head of Grid Connections from Innova.

00:00:26 – Joe Colebrook
Hi.

00:00:27 – Pete Aston
Welcome.

00:00:28 – Merlin Hyman
Thank you.

00:00:20 – Pete Aston
Thanks for coming.

Can we just, could you just sort of all three of you just slight, give us a bit of an intro to who you are, what you do as a day job? Nikki, can we just go to you, sort of what things do you do in a normal course of a week?

00:00:43 – Nikki Pillinger
So, I do mainly distribution connections, so I work with various developers delivering projects, I also do a lot of industry engagement and sit on a lot of the scrutiny panels, and industry groups, and steering groups.

00:00:55 – Pete Aston
Ok. And can you just tell us Nikki, why are we four here? Well, what’s the linkage between us four in the room?

00:01:03 – Nikki Pillinger
So me and Joe co-chair the Regen and Grid working group, which of course Merlin is a Chief Executive of Regen and sits on the working group with us.

00:01:14 – Pete Aston
Yes, and I probably should have said already that we’re here to talk about all things Connections Reform, what else?
Joe, just coming over to you, give us just a brief insight as to sort of the scope of your role.

00:01:24 – Joe Colebrook
Yeah, so as Head of Grid Connections, so Innova have a portfolio of distribution projects, transmission projects, everything from operational projects to you know, early-stage development. So, me and my team, we work throughout the process, working to develop and deliver those projects, mainly engaging with the networks and the NESO and, yeah.

00:01:54 – Pete Aston
Okay, it’s going to be great to have you on the podcast, particularly just so that you can give us that sense of what will these Connections Reform changes mean for you as a developer, so I think that’s going to be great to get that angle on it.

And over to you, Merlin, if you give us sort of a bit of an insight as to what you do.

00:02:11 – Merlin Hyman
Lovely, thank you, Pete. So, thank you for the invite.

So, yeah, so I’m Chief Executive of Regen, which I think most people know, but it’s a kind of organisation whose mission is this transformation of the energy system to net zero, and we do that in a number of ways, providing advice for leadership and influence and policy formation. And then we also have a membership of kind of whole system, or membership of organisations involved in the energy transition who want to kind of work with us to address some of the policy issues and barriers and challenges; and one of those areas we work on a lot and have worked on a lot over many years is, the grid, and our grid connections working group is getting bigger and bigger – I think there’s 140 attending this, well, this meeting today, so there’s a lot of interest in there. And because of that kind of experience we’ve gained, I was asked by NESO to chair the Connections Process Advisory Group, CPAG.

00:03:13 – Pete Aston
And how long has that been going?

00:03:16 – Merlin Hyman
Well, that’s a year, there was a predecessor group whose name has thankfully left my brain by now, which I also chaired, and then I also sit on the connection’s delivery board, which is the kind of next up in the hierarchy. But I should say that this, all views here, are my own, and Regen’s – I’m actually not speaking for NESO.

00:03:39 – Pete Aston
So, the grid connections working group that’s obviously been going for quite a few years now, and has that borne lots of fruit?
Is the main part, purpose of that just to collaborate, share ideas between sort of various people in the industry?

0:03:54 – Merlin Hyman
Yes, I mean, I’d say the main purpose is action oriented to try and bring together industry. And when I say industry, I thinking quite broadly, so including say local authorities, community groups, as well as mainstream developers, you know, so the kind of full range of organisations involved in this transition and to try, you know, agree on areas we want to see change and influence. So, you know, the group’s done some excellent work, for example, with ENA and DNOs around technical limits issues and encouraging them to make changes, etcetera. So, it’s a, it’s very much an action – let’s try and improve things.

00:04:35 – Pete Aston
Yeah, okay, brilliant.

Joe, I’m going to come over to you now. So, obviously one of the big parts of Connections Reform, and it’s probably worth saying Joe, you’ve been sitting on all of the Connections Reform working groups, haven’t you?

00:04:48 – Joe Colebrook
Yeah, so 60 plus working groups. I also, so for the benefit of viewers as well, I’m on the CUSC panel, so the Connections Use of Systems Code Panel, which sort of governs the cusk and the energy code. So yeah, I have that experience as well as the sitting on 60 working groups, so very involved with Grid, Grid Connections Reform.

00:05:09 – Pete Aston
So, you’ve been in the weeds of trying to work out what Connections Reform should and shouldn’t be saying, and involved in lots of those discussions?

00:05:16 – Joe Colebrook
Yes.

00:05:18 – Pete Aston
So yeah, thank you for doing that on behalf of the industry, and for everyone else who’s been doing it as well – hard work.

00:05:24 – Joe Colebrook
Thanks.

Yeah, I would say I think the working groups obviously focused on CMP 434 and 435, so the gated process and the window application, application windows that we’re trying to implement, the methodologies that came out of that, that the NESO have recently published, it’s not something the working groups have really been able to scrutinise – obviously there’s a separate consultation for that.

00:05:49 – Pete Aston
Yeah, yeah.

And I think we’ll refer to all the consultations later on towards the end, but one of the methodologies published is all about the reshuffling of the queue, to how it’s going to fit within the sort of Gate Two readiness criteria in the Clean Power 2030 needed criteria. So how’s that looking for you as a developer as it is in Inova?

00:06:13 – Joe Colebrook
So yeah, I think particularly the key part of the methodology is the reordering of the queue. So the existing queue, we have connections, so transmission connections that range from sort of 2027 to 2037 – so a broad range. And obviously we’re, you know, we’re really keen to unlock some of those connections which are much later, but at the same time, Connections Reform creates a lot of uncertainty and uncertainty is never a good thing in the investment world. You know, we, these projects which we’re looking at in 2028, you know, there’s a lot of work that needs to happen now in order to, to build them. So even though we’ve got planning on several of them, you’ve got various supply chains that we have to consider. So we, you know, that the supply chains in the UK at the moment or generally in the world, I think for electrical items, are very long – I think 33KV you’re looking at 52 weeks, so up to 400 KV you’re looking at, you know, nearly three years, and for 400KV transformers. So you, we need to be making decisions now and investment decisions now. And I’m, you know, I’m concerned, I think Inova are concerned that limiting, creating uncertainty for any projects post 2026-27 and beyond is going to potentially slow down investment over the next couple of years, or year and allow, and that potentially creates that vacuum in 2027/2028. So, you know, if we can somehow mitigate that, and allow projects that are ready to build to keep investing and keep developing their projects, then I think that would really help alleviate a lot of the concern in the industry.

00:08:08 – Pete Aston
Are you seeing any difference between your distribution projects and your transmission projects? Because obviously they are very different lead times on different items there.

00:08:15 – Joe Colebrook
Yeah, I think that’s it really is mainly lead times. Right, so your distribution projects, we’re looking now, some of the ones we’re building, we’re hoping to you know, we’re just, we’ve just completed ICP tenders, and they’ll be hopefully built in 2026. You know, the next batch is sort of looking at ICP tenders next year for 2027. So already it’s going to have, it is going to have an impact on them, but there is that lead time – but obviously compared to transmission those lead times are a lot less, so it’s less of an issue.

00:08:48 – Pete Aston
Yeah, and within the methodologies that have been published, there is an allowance isn’t there for schemes that are in construction and are going to be energised by 2020, the end of 2026 that they’re not going to get caught up in the reshuffling. But what’s Inova’s view on that?

00:09:08 – Joe Colebrook
I think as, because of the reason we just said, I think we would like it to be longer because there’s obviously a lot to build and we want to be able to build stuff in 2028, and I think the danger is that this pushes a lot of those projects out a year, and that means that there’ll be that hole in 2028. And we’ve already got a lot of restraints on the grid, resources in the country, both engineers, you know, supply chain, everything. So having a year, potentially back ends everything to the end of 2028/2030, which we don’t really want to. We want to do – we want to be building stuff in 2028. But yeah, so what was the other part you said?

00:09:48 – Pete Aston
I was just talking about the 2026 date and the, I guess some of the ambiguity around, the wording within the sort of 2026 construction.

00:10:03 – Joe Colebrook
Oh, yeah, yeah, so you’re talking about they’ve got to be under construction. I think there’s a lack of clarity about what construction really means. Like I have yet to see is it, does it mean you’ve got, you know, contract signed? Does it mean you’ve got a spade in the ground? Like it’s very ambiguous about what that means, and I think that’s something that the NESO really needs to clear up.

00:10:24 – Pete Aston
Yeah, I think so.

And Merlin, from your point of view, are you hearing other developers saying similar things around this issue of 2026 and in construction or not?

00:10:35 – Merlin Hyman
Yeah. I mean, I think stepping back, I would say the industry, I was talking to Joe earlier, and it feels a bit punch drunk at the moment. It’s like the volume of change that in a short period of time has, you know, left people scrabbling a bit to kind of work out what this means for them, what they think, what they think about it. And that that’s not necessarily a criticism that, you know, we’ve moved. There was quite a long process of Connections Reform thinking about sort of first readiness, but the idea of aligning to a strategic plan, CP2030, and what that might mean kind of emerged in August. And it’s clearly quite a complicated thing when you have an existing landscape of 700 gigs of projects and you say we’re going to now, kind of rethink that whole landscape based on is it aligned to a strategic plan? So you know, and you can see that in the volume of documentation, I think that’s come out, I think someone said 500 pages, I don’t know if anyone’s actually counted at least, and obviously a relatively short time, you know, time to think about that, and yet I think there are also some areas where there’s still a lack of clarity, and I’m sure we’ll come to that. So, you know, all of this is about, you know, a noble, laudable aim, that I think everyone shares, which is to get more stuff built quickly to accelerate this transition – so I think everyone’s behind that. So I think everyone’s got a lot of goodwill and wants to work with this process and wants to make it work, but it is a challenging time scale for everyone, I think on a challenging scale of change.

And so, I have heard from quite a number of people Joe’s point, like could we give certainty a bit further out, so that those who have really started, have already made significant investments, are definitely not negatively impacted because that then sends ongoing signals to future investors, and to, you know, we’re trying to, I think is it 40 billion a year? I mean, we’re trying to, you know, we’re trying to get an eye watering number amount of investment into this country into, into clean energy projects in a very short space of time. So we, to attract investors, we don’t want to create risks, so is there anything else that we can do to make sure that anyone who’s already well down the path doesn’t get caught by this, and indeed that, to not start do exactly what Joe wants, and I’m sure if Chris Stark, I’m sure Chris Stark listens to the RKTT, the Connectologist® podcast.

00:13:04 – Pete Aston
But if he doesn’t, he should.

00:13:06 – Merlin Hyman
And I’m sure he should, if he hears this, he’d be like no, no, no, please build. I want you, you know, let’s get on with it!
So, anything that can do we can do to avoid risk to it, there’s an avoid delay. I think it’s really important and at the latest webinar, James Norman did signal willingness to consider that date, and also, I think it was Paul Mullen, his colleague talked about the need to define what they mean by ‘construction’. So, I think everyone’s moving in a fast pace here trying to work some of this stuff out.

So I’ve, you know, why it’s so important that we do discuss it, engage in it and the industry does highlight the issues it’s seeing.

00:13:51 – Joe Colebrook
And, sorry just so just on that point, I think there’s a couple of things there, like you talk about engaging with the industry, there is so much knowledge in the industry, I don’t think, I think, you know that lots of people have built connection projects before or transmission connected projects before, distribution connected projects before, and they all, there are all certain things you have to do in order to develop them, in order to deliver them and construct them. So I think there are, there is evidence and things you could choose, you know, whether it’s surveys, feed studies, contracts, however you wish to do it, where you can say that provides enough certainty to that you’re going to build in 2028, right?

00:14:35 – Pete Aston
Because there’s a big difference between having a grid connection and planning permission and having a project that’s actually able to be delivered, isn’t there? There’s a massive, great big gap between the two.

00:14:47 – Joe Colebrook
It’s something that people will take a financial investment decision on and invest several hundred millions of pounds – you know, people don’t do that on a whim.

00:14:54 – Pete Aston
No, and I guess some of the criteria at the moment within Connections Reform are, you know, understandably to some extent, quite course, you know, the have you got land, have you got planning in terms of the reshuffling of the queue, but it almost feels like there’s, you know, steps beyond that, which needs to be about, are these projects really deliverable by 26,27,28, whatever it is.
So I guess moving on from some of that uncertainty, perhaps that some of the reshuffling is causing.
Nikki just come over to you, there’s already various things bubbling around in the background anyway, aren’t there that are causing certain amount of uncertainty? And I know you had a few thoughts, I just wondered if you could just sort of unpack those for us?

00:15:38 – Nikki Pillinger
There is yes. So we have, you know, we’ve been aware of this queue issue for quite some time, and you know, initially we had the National Grid’s five-point plan, you know, that was…

00:15:49 – Pete Aston
That feels like a long time ago.

00:15:52 – Nikki Pillinger
I know.

You know, that was initially supposed to sort the queue out, that was the aim of that. That’s somewhat been superseded by what’s happening now. But alongside that, we also had the ENA, they had a three-point plan, among that was sort of technical limits. So there’s, which already creates that ambiguity as to what is a connection date? So there’s projects that have, you know, actually received technical limits offer maybe in December, January, and they’ve been getting on with their projects the last year or so. And now because of this queue reshuffling that does actually put them fairly, significantly at risk.

00:16:33 – Pete Aston
So are you saying that there are some projects that have had a technical limits offer and then have gone ‘I can proceed under that?’. So, if anyone doesn’t know, the technical limits offer is essentially an active network management type connection. You can connect early, but you’re going to have some curtailment potentially instead.

So are there some projects who you think are developing under technical limits, but now are saying I might be at risk of being, having my queue date pushed back because of ….

00:17:00 – Nikki Pillinger
Potentially, so there’s very little clarity on how technical limits is going to be managed. We’ve sort of said, you know, we’ve heard it said that yes, that will continue. But equally technical limits, you know, it has applied to quite a lot of projects. And because you might have only heard, you know, fairly recently that you can actually connect earlier, you know, projects probably haven’t gone into planning. They certainly haven’t come out of planning. You know, time scales for planning are, you know, 9-12 months at the moment for projects to actually even come out once they’ve put planning in. Yeah. So it’s quite a challenging landscape in terms of especially it being sort of NESO led. Those, nuances of how this is going to impact distribution I think still need an awful lot of work.

There’s still that sort of wider ANM piece as well. We’ve got ANM in some parts of the country, not in others. Scotland is particularly complex in terms of what we’re doing with ANM in terms of what the transmission distribution interface is there.

Yeah. So there’s still things like that that are in play and kind of maybe haven’t been, sort of, the process hasn’t been fully sorted out yet, that we’re kind of putting another process on top of them. It needs to be thought out a bit better.

00:18:16 – Joe Colebrook
Do you think, like, you know, we’re moving at such pace, there’s everything being laid on top of each other? And do you think the interactions between them have really been considered? And more like the when you really get down into the trying to make this operational, like it’s all well and good writing a policy, but when you actually go, OK, we need to implement this, do you think that that’s really been thought about and how, you know, Connections Reform interacts with technical limits or you know, financial commitment interacts with technical limits, all those things?

00:18:56 – Nikki Pillinger
And that’s what worries me as well is that that hasn’t particularly been considered. And we’ve also got that question of enduring technical limits, which many customers want, which is a fairly unanswerable question at the moment it seems.

00:19:09 – Joe Colebrook
Yeah.

00:19:11 – Merlin Hyman
So we have, as Regen’s Grid Connection Group, raised those issues direct with ENA. And I think our thinking is to put them out in an open letter at some point. But with the blizzard of stuff coming out, I think if you don’t get your open letter out pretty quickly in this game, you know, the world’s moved on. You need to act pretty quickly!

So, and as you know changing hats as chair of CPAG, I have asked ENA to kind of come to present to the group this week on how this reform applies at distribution and they’re clearly thinking hard about that. But I think from their point of view until we have the overall process, the sort of the kind of transmission overall process, it was almost impossible to decide how you’re going to implement that at distribution. It makes a lot of sense, but given the time scales if we’re trying to getting all this in by the end of March and offers out. New offers out kind of April and if we miss that time, then we’re kind of missing people getting new offers next year. And we’re trying to build, you know, that’s not great in the 2030 context. So there isn’t very much time there. So that’s going to be a real challenge, I think for ENA and the DNOs. And as Joe points out, working collaboratively with industry to iron out all those details very quickly.

00:20:40 – Joe Colebrook
And that’s why we need to use transparency to our advantage here. I think there’s no point hiding anything because you need everyone’s brain on this challenge. You can’t be like, we’re going to go away and think of this in a private room and then come back to you with an answer because inevitably you haven’t thought of everything. Because it’s impossible for one person, or a very small group of people, to know everything that’s happening and understand everything in this industry. So the more that’s out in the open and the more that is there for people to challenge constructively, the more I think the quick, you know, the quicker we can get to an answer.

That’s often been a problem in the past, is that people have just thought, well, I don’t want to share that because I’m worried about the negative feedback, the challenge. And that then means that we’ve then delayed that inevitable challenge a few months down the line. So, I think the more transparency the better and the quicker we can make this all work.

00:21:44 – Pete Aston
Just widening the perspective out slightly, Merlin. How are you seeing this in the sort of wider context of delivering net zero generally? So you know that there is this ultimate goal, I guess for us to get as a country to net zero at some point. Is this actually going to accelerate us getting there?

00:22:11 – Merlin Hyman
Yeah, good question. Look, I guess everyone agrees that we weren’t in a good place before – where we were before, it was not fit for purpose. And we can all debate why we got to that place with projects stuck, projects getting connection dates of either 2040 or whatever, 700 gigs in the queue where we need maybe 200, you know, all of that, all of those points.

So, I think everyone’s very highly supportive of Connections Reform. And I think there’s a lot of goodwill towards, you know, CP2030. Why as an industry, would we not support a, you know, massively ambitious government mission for clean power – absolutely.

So, yeah, the decisions that have been made over the last few months and the directions taken, you know, were subject to some debate, and NESO with Ofgem and DESNZ have made various, you know, calls about the approach we’re going to take.

I think most, you know, I think there’s a lot of concern out there, but I think probably most people are in the mindset of how do we make this work now rather than let’s argue about whether we should have gone this direction 6 months ago or a year ago. I think, I don’t presume speak for everyone in the industry, you know, fundamentally what we’re talking about is building a lot more, a lot quicker, that stuff we all want to do, we can all get behind. What we have is a proposal on the table, you know, how do we make it work as best we possibly can. I think that’s where most people are.

00:23:53 – Pete Aston
I think so. And I think it’s really easy to lose sight of the fact that this is a massive change, isn’t it, to the industry, you know, sort of the biggest change in many decades of this energy transition? And so it’s actually, I think I, you know, I certainly agree with you that there’s lots of really positive things going on.

And it’s really easy for, I know us, we to get, we get stuck in the detail and go, ‘Oh, this is terrible and that bit’s awful’. But you know, if you take a step back and you go actually, there’s lots of good things going on and it’s really difficult as well, isn’t it, you know, I think there lots of people working really hard.

00:24:28 – Joe Colebrook
I have a lot of sympathy for people in NESO, particularly NESO, but across the industry, like this is not an easy challenge. We’re not saying it is. I think again, that’s why the more we’re allowed to debate and collaborate and discuss it, the more we can hopefully come to a good place.

00:24:47 – Merlin Hyman
And working, you know, engaging a lot with, as I do with through CPAG and CDB, with NESO, Ofgem and DESNZ, I think they would all, you know maybe it feels sometimes that they’re going off into a dark room. I don’t think that’s their intention. And I think they would entirely agree with Joe that this is needs to be a collaborative process.

You know, someone has to make a decision in the end. And that’s what they’re there for. It’s in the job title of NESO and fundamentally Ofgem really, which is the critical decision maker in approving a lot of this stuff. But I think they’re very keen for as much, you know, collaboration and transparency as possible.

And this is, you know, this is a consultation. There is a consultation out, I mean, that’s the way. So we do have that chance to, to engage and to try and shape it at this point. And I know it’s difficult and complex and everyone’s very busy, but I think this is the, you know, this is a moment everyone does need to respond. And, I don’t think, you know, speaking to everyone, I don’t think this is a, I don’t want to use the word, you know, sham consultation. I’m sure government and its agencies would never do such thing. But maybe there are times they go into these processes with a pretty set view and they’re, you know, not that interested in change. I think because we’ve been moving so fast, I think they really recognise there could be lots of issues and details and challenges and they won’t have thought of everything. They must have done an enormous amount of work and burnt a lot of night oil to get to the 500 pages. I kind of hand it to them! So I think that definitely there’s a lot of openness to listen and change, but it is being done at pace, which is definitely the challenge.

00:26:38 – Pete Aston
Just to turn to you, Joe. One of the documents that NESO produced was the Clean Power 2030 Plan and their associated data impact assessment, which was trying to define the size of the pots of different technology types that are required for 2030, which is obviously a very challenging thing to do because we haven’t yet had the strategic spatial energy plan. I think that’s what it is SSEP, isn’t it?
So how are Innova seeing that because obviously that quite heavily impacts on potential opportunities up to 2030?

00:27:14 – Joe Colebrook
Yeah, I think obviously it provides a strategic direction, right? It provides a good clarity as to what we as developers should be targeting. And that I think helps if everyone is going in the same direction, that obviously helps a lot. Like I think, you know, it would have, having this in the past would have probably have stopped having the 200 gigawatts of energy storage in the queue, which I think a lot of people might, it might turn out to be that a lot of money has perhaps been invested there, which maybe didn’t need to be or is, you know. So it does provide clarity, which is really good.

I think the thing that it will do next is then it will concentrate investment. So, there is a very set plan and a very specific group of technologies and values or capacity of technologies that we need to invest in as a country. And so everyone will concentrate their investments within that plan. And that can potentially be seen as a good thing, but could also be a bad thing. Like infrastructure is hard to deliver, especially in a land constrained place such as the UK. So it takes time. And therefore, if you want to pivot or change your strategy, you can’t do that very quickly.

So in setting this plan, you’re going to concentrate investment, but therefore you need to be confident that your plan is the right plan and have measures in place to change your strategy years in advance of when things are actually delivered. You know, we don’t want to be getting to 2030 and going, oh, maybe we should have built more energy storage because you’ve got to wait another three or four years for someone to go and build that. So, yeah.

So, you know, my coming back to Merlin’s point about consultations and engagement, you know, I’m really glad that there’s a consultation on methodologies and on Connections Reform. The one thing there isn’t, doesn’t appear to be a clear consultation on is the Clean Power Plan and the values in those pots. So, you know, I’m not sure how we as an industry can be sure that they have been robustly challenged.

00:29:51 – Pete Aston
Because we don’t yet have complete clarity and openness on the methodology that they use to develop those pots?

00:29:56 – Joe Colebrook
We don’t even have complete clarity yet on what the regional pots are. You know, NESO have said that they will publish them soon, but it’s that we don’t even know what the regional pots are to each technology. We don’t know how they’ve got to the numbers themselves. And there doesn’t appear to be a consultation to actually say what we think about them as well. You know, so I am a little bit concerned about that, and I appreciate this come up pace and there’s lots of things that are moving around. So, you know, I just would like, I think the industry would like to give their view on those pots and say, you know, we think there should be more or less of this.

00:30:37 – Pete Aston
What you are asking for is for another consultation?

00:30:39 – Joe Colebrook
I hate to say it, but I think I might be!

00:30:44 – Nikki Pillinger
I think it’s been such a departure, hasn’t it, from what we’ve seen from the last few decades. You know, we’ve had that very sort of Thatcherite driven economics. So if you know, the market will provide, the market will do its job. We will not be picking winners. Whereas we’ve very, very quickly gone to that, you know, strategic spatial energy plan, central government driven, very defined view of what we want an energy system to look like, which is very challenging when we actually, you know, we still have a privatised system. You know, we have, you know, have the NESO now, but we still very much have a privatised energy system.

00:31:20 – Pete Aston
And, Merlin sort of picking up on Nikki’s point around that sort of, you know, more central sort of control of different energy technologies and where they might be going. How does that fit into a wider picture of, you know, the market?

00:31:39 – Merlin Hyman
So I mean, firstly, from Regen’s point of view, we have all for some time argued that if you’re going to have this scale of transformation in the energy system, you do need a strategic plan. You kind of, you know, otherwise you end up putting stuff in stupid places and trying to make the market send all their signals is very, very difficult. So, we’re right behind, you know, a strategic plan.

We think that Clean Power 2030, you know, has been done at pace. It is as everyone has said, a genuinely transformational document that NESO has turned around in an impressively short space of time. There was a lot of consultation. I went to quite a lot of stakeholder events and had one to ones with Julian Leslie and the team at NESO.

So you know, this is an incredibly exciting mission. Clean Power 2030 I would say in the context, if it may have COP29 and international perspectives, you know, the UK, the quest can the UK pull this off is kind of recognised around the world, if you like, as an important thing. So, you know, genuine exciting mission, great to see a plan turn around it at great pace. And Government really then about to turn that into its own plan in perhaps around mid-December, which is the final plan. So this is the advice what we’ve heard so far, they’ll turn that into in the final plan.

So all great because as we’ve talked about the kind of when the rubber hits the road and where that really starts to bite is, particularly at the moment, on the grid connection side of things. And as we’ve identified the kind of the size of the pot and the localities of those pots of technology, you know, it’s where this really gets quite, quite detailed and difficult.

We don’t have a sort of pre-existing methodology or way of doing that, you know, and I guess if I was to be, you know, critical of NESO in this process, I think not publishing those numbers has not been particularly helpful. You know, there’s a slightly sort of there’s some graphs you could sort of turn into a chart. I’m sure lots of people in the in the industry have had, you know, ChatGPT or an intern or whatever, gradually filling in like, you know, looking at a line on a slightly scrappy graph going, oh, is that 300 or 400 megawatts?

And I think we’ve seen some, you know, some people have pointed out that I think is it zone 9? It hosts some of the those transmission connected projects that Ed Miliband approved with a blaze of glory was seen after he came in DCO projects and that those don’t appear to be on the on the chart. So clearly some challenges and teething problems in that process.

I refer back again to the webinar that NESO did last week where they were said very clearly – you’re right there Joe – they don’t seem to have a very a formal consultation process on that. But they said very clearly that those are preliminary numbers. Kind of almost talked them down a bit like ‘yeah, yeah, first go, of course these are going to need to change and we’re quality assuring them and let us know all your data and input. And you know, we’re definitely up for upgrade and for improving those.

So, yeah, so I think that’s, you know, that process of perhaps not being quite as slick and well communicated as it might have been, but everything’s happening at pace. But we do now have that open invitation. And I think everyone will, I hope, be going back and saying, you know, trying to provide a bit more evidence as to what those numbers should be. I guess there are some decisions in the in the end of that – if we’re going to do it this way, if you’re going to have a strategic plan, someone has to make a decision about somewhere somehow or what’s in the plan, what’s not in the plan. But just as we’ve talked about before, I think it a lot more transparency and openness about that. And to be fair, NESO have said that that’s what they’re going to do.

00:35:54 – Joe Colebrook
We do to be fair, we put a lot of pressure and ask on NESO. I think we as developers and as industry, if when we are providing consultation responses and we are trying to challenge the numbers or things that are in the methodologies, I think it is really important that we do provide evidence.

You know, I think too often we’re very good at providing opinions. And I think we just need to be, you know, if we’re going to be helpful here, if we’re going to be constructive, we need to provide the evidence and say, ‘this is why we think you need to do it. And these are the, you know, this is the evidence to back it up’. And that will hopefully help because NESO are open to change. Everyone I think is open to listening, so I think that will help the conversation.

00:36:40 – Pete Aston
Thank you.

But I am going to ask your opinion now on the financial instrument. So this is the idea that schemes will have to sort of be topped up to a £20,000 per MW security on the project following Gate 2. Have Innova had a chance to sort of digest that think around what that might be mean?

00:37:06 – Joe Colebrook
Yeah. I mean, maybe we just take a step back and like, what the NESO has proposed and what the practicalities are for someone like ourselves, right. So you’re going to ask someone to put £20,000 up per MW from the moment they accept a connection offer.

00:37:27 – Pete Aston
A Gate 2 offer is it?

37:28 – Joe Colebrook
A Gate 2, sorry yes.

So, at the moment that means you’ve got a land option, it means that you are quite likely to have a Gate 2 offer without planning. So you’re going to then put up £20,000 per MW, which let’s say you’ve got a quite a standard 200 MW energy storage or solar project transmission. That’s £4 million, if my maths is right! Yes?

So you’ve then got to finance that £4 million. Now you either do that off your balance sheet, which I think most developers are not in a position to do that. You get a shareholder equity in to fund it or you try and fund it through, you know, on the asset itself. Now that asset without planning is not worth £20,000 per MW – so that’s not possible.

So you’re then asking investors to risk their money on this. Developing itself is already a very risky business. There is already, you know, developers, people who are getting planning and grid connections for projects are already taking most of the risk or certainly, you know, the risk reward is very high. You put a lot of money up front hoping that you get a payoff in the future.

Is anyone going to put down £20,000 per MW? I’m not sure. So, it’s going to really reduce the players, it’s going to reduce the competitiveness in the industry for developing projects. So for me, the number one thing with this financial commitment in its current form is it is anti-competitive. And that I think is something that really needs to be thought about.

And then second to that is, this was obviously the reason we’ve got to where we are is because the connections action plan, I believe it was, mentioned the need for NESO to consider financial incentives to reduce speculative projects. I think was sort of the word.

And I think that we need to take a step back and say, and talking earlier we talked about interactions between all these moving parts, is we need to take a step back and say is that financial commitment needed in the same way that it was needed back when before when we started Connections Reform?

And I think with all the reforms that are coming in through the code modifications, we’ve got gated process, we’re linking land to planning application to , connection applications. So now you can only move 50% of your capacity outside of your original red line boundary. So the land that you’ve linked to your connection offer, which kind of stops anyone saying, well, I want to build a site here and then going, actually I’ve changed my mind. I want to build a site down the road with another landowner. They can’t do that anymore. They need to reply for a new connection and go through the process again. So yeah, I just, I’m not sure it’s needed anymore.

00:41:01 – Pete Aston
Nikki, are you hearing similar things from other developers that you’ve been working with?

00:41:06 – Nikki Pillinger
Yes, certainly. So, I personally have some fairly strong views about this.

00:41:12 – Pete Aston
We’d love to hear them.

00:41:14 – Nikki Pillinger
So I, you know, we’ve spoken about this a lot, but it certainly seems like too blunt and instruments. And like Joe says, it seems very anti-competitive to me – it seems like you would be kicking out most developers, even the large ones, by the way, this is, it seems like a bit of a tirade against the sort of smaller, maybe speculative developers, which by the way are a very important part of the industry; but even the larger ones, you know, this is unfundable for most people, or for most companies apart from large utilities – so that to me is incredibly anti-competitive.

I also don’t think it’s needed at all, we have a securities and liabilities process for a reason, that should be done properly. The reason that we have so many people sitting in the queue without very high securities and liabilities, it’s because they have 2037 connection dates, which they shouldn’t be having in the in the new system – so that should actually get over that problem. £20,000 per MW is just it, you know, it’s a huge amount of money, you think about like Joe said, but you know, even a 50MW solar park at distribution, that is a million pounds, a stage of a project where it would be hugely financially irresponsible for a developer to risk that much money at that stage – hugely, you know, enormously financially irresponsible – you wouldn’t do that, it’s not correct.

00:42:44 – Pete Aston
And I guess with the current securities and cancellation liabilities process, you can get some big numbers through that, but you, it’s linked to something specific, isn’t it? It’s like..

00:42:58 – Nikki Pillinger
Yeah, at least it’s reflective of what they’re doing.

00:43:00 – Pete Aston
Here’s this bits of work that’s going on, and you’re sort of securing this bit of it, which is difficult to take it sometimes on some projects. But at least there’s a sort of a rationale behind it that you can go, there’s some logic as to as to why you’re having to put that particular security up.

00:43:15 – Nikki Pillinger
Yeah, whereas £20,000 per MW, that isn’t linked to anything. It’s a fairly..

00:43:21 – Joe Colebrook
Well, Baringa did a study, which is what it’s linked too.

00:43:24 – Nikki Pillinger
Yes, no, I appreciate that’s what it’s linked too, but it’s not linked to anything physical being done.

00:43:22 – Joe Colebrook
I think, the Baringa, if my memory serves me correctly, is that they sort of linked it to the, to what the project would be worth once it got to a certain stage, so they were trying to say, well, you need to spend this much money to develop a project and therefore you should put that money up, and kind of like as you spend money, you can draw down on this money you’ve put upfront. But I think that, and that kind of, I can see the log, I can see what they were trying to achieve, but I think it fundamentally misunderstands how you develop a project and the commercial risk you have to take.

00:44:13 – Nikki Pillinger
Yeah, and it’s just not reflective of the infrastructure that’s actually being put in. If you’re securitising against a new SGT or something like that, that’s understandable – I get that. But just securitizing for the sake of it, especially like we said at that stage of a project, it’s just, it’s not viable – it will destroy competitiveness within the industry, I believe it’s not necessary.

00:44:36 – Merlin Hyman
We did obviously discuss it this at the Regen last working group in some detail, and Joe drafted some questions for us to send out to the membership, and the response was interesting. I would say about 50% were, no, we don’t need this, but about 50% were, okay – I’d pay something, but you know, maybe more like an order of magnitude lower, and then I think we got one person who was like, yeah, fine, happy with that. So yeah, I think there’s, there was a split between the industry between some willingness to put down something, but not at the sort of level we’re talking about, and then the other half saying we don’t need this at all – we’ve got existing processes. So that, just a feed in, that’s the, that was the sort of wisdom of the crowds coming back.

00:45:26 – Pete Aston
Thanks, Merlin.

I think this brings us to our very last point, which is the consultations. So, there is a chance to respond to the consultations there, on this financial commitment.

00:45:37 – Merlin Hyman
Yes, they, well there wasn’t, you’re right – there was a call for input. It’s probably worth saying that in the sort of hierarchy of where we are in policy development, this is a sort of a call for input, quite an early stage, but sort of there isn’t a specific implementation or code model. It would need a code modification – nothing’s come to Joe and cusk as of yet.

00:45:57 – Joe Colebrook
Not that I’m aware of.

00:45:59 – Merlin Hyman
So it’s the other things we’ve been talking about, are Code Mods and methodologies, tabled. We are, this is what we are going to do, you know, tell us if it’s wrong. This is more we’re thinking about this – what do people feel, what do people think? And then if it was, once they’ve had that, they would then have to go through the code modification process and have Joe critique, and what they’re doing and everyone else in the usual way.

00:46:23 – Joe Colebrook
And, and a call for input is a great, like a really sensible thing to do, you know, before you raise a Code Mod, what do you think? As an industry, we can feed that into the proposal. So, the call for input closes on the 22nd of November – so this Friday.

00:46:39 – Pete Aston
So, and by the time you’re listening to this, it’s probably in the past.

00:46:45 – Joe Colebrook
Probably in the past, yes, but hopefully everyone who has obviously, then there are, then you can go to the working groups if you so wish, if once it became a Code Mod. So there, I think with a financial commitment, there’ll be plenty of opportunity to engage and consult if you have missed a call from …

00:47:00 – Pete Aston
And there are some other actual consultations out still that can be responded to.

00:47:04 – Joe Colebrook
Do you want me to go through the days?

00:47:06 – Pete Aston
I do want you to because I can’t remember any of that.

00:47:10 – Joe Colebrook
Right, this is testing, yeah, testing my memory, but also showing how much, what I’ve been working on for the last how many months and weeks.
So you’ve got the Connections Reform Code Modifications, so CMP 434 and 435, those, the code admin consultations, there’s already been one consultation, this is the next one, for the code admin consultation runs until Tuesday, the 26th of November, 5:00 PM, which will possibly in the past by the time you watch this.

00:47:45 – Pete Aston
Possibly we will see.

00:47:47 – Joe Colebrook
So that’s one, then you’ve got the methodologies consultation, so, which includes the draught impact assessment that we talked about earlier – that goes until the 2nd of December also probably 5:00 PM, everyone likes to end their consultations at 5:00 PM.

And then there is the call for input, which you discussed, and I think that’s all of them at the moment.

00:48:10 – Pete Aston
Isn’t that the Ofgem end to end review?

00:48:13 – Joe Colebrook
There is the Ofgem end to end review, which I believe is 13th January – I’m 90% sure on that.

00:48:20 – Pete Aston
Anymore for anymore?

00:48:21 – Joe Colebrook
And also, I think it’s worth saying similar to what Merlin said earlier, NESO have asked for feedback on the Clean Power Plan. I don’t know whether you can share some contact details as part of this podcast, but there is a Connections Reform dot box that you could send some feedback to, so it’s not formalised, but they are open to receiving it, they are keen; so I would encourage anyone, if they are, they have got some particular views and evidence to share that.

00:48:53 – Pete Aston
Yeah, thank you, Joe. And I think it’s definitely, we all like to share our opinion, but let’s share some evidence as well in the consultations.
I think that’s all we’ve got time for. Thank you to all of you for joining us on the podcast and thank you, everyone for listening, and we do hope you’ve enjoyed it, and we hope you tune in for our next episode as well but thank you and goodbye.

00:49:16 – Merlin Hyman
Thank you very much, Pete.