Podcast: Addressing Connection Uncertainty – Part 1 – with Graham Pannell, BayWa r.e

00:00:45 – 00:01:02 – Catherine Cleary:

Hello, and welcome to another episode of Roadnight Taylor’s Connectology® podcast. I’m Catherine Cleary and I’m joined today by my colleague Kyle Murchie, and we’ve got a very special guest, Graham Pannell from BayWa r.e, Graham you are Bay Wa r.e’s Head of Grid and Electricity Regulation. Tell us a bit about BayWa r.e as a developer.

00:01:03 – 00:01:40 – Graham Pannell

Ah, of course, thank you for having me. BayWa r.e is a global renewable energy project company, active across 31 countries, five and a half billion euros annual turnover. We develop, construct, deliver, own in some cases and, and operate renewable energy assets right across wind, solar storage on and offshore. And in the UK that means a development pipeline of around three gigawatts. We built some 400 megawatts of, of solar and storage last year, and with one and a half gigawatts under operational management.

00:01:40 – 00:01:52 – Catherine Cleary

So, I mean a pretty big player, and you’ll be a well-known face and name I suspect to a lot of our listeners. What does BayWa r.e actually stand for Graham? Because I shied out of doing the proper German introduction.

00:01:52 – 00:02:12 – Graham Pannell

BayWa r.e originated in the 1920s in South Germany as an agricultural cooperative of workers, their full title; Bayerische Warenvermittlung Landwirtschaftlicher Genossenschaften AG – okay? Which we conveniently shorten to BayWa r.e.

00:02:12 – 00:02:13 – Catherine Cleary

And on behalf of everyone, thank you.

00:02:13 – 00:02:14 – Kyle Murchie

Yes, thank you!

00:02:14 – 00:02:39 – Graham Pannell

Still, I get all sorts again – Byware, Bywere, Bywear. But yes, I think I, I would think about, um, surely a lot of people for the football teams, if you’ve heard of Bayern Munich?  Vosberg particularly big in the, the Women’s League in Germany. We can, we can pronounce BayWa r.e

00:02:39 – 00:02:58 –Catherine Cleary

BayWa r.e, yeah. Excellent. Perfect. Now, I mean, beyond BayWa r.e, I mean, Graham, you’ve, well, I was gonna say, you’ve been around for a while. That seems like a very ageist thing to be saying, doesn’t it? I think you’ve worn a lot of hats, is probably a good way of saying it within the industry, and a huge wealth of experience. Have you, we were, I’m trying to count just, just how many sort of roles grid groups have you been involved in?

00:03:00 – 00:04:25 – Graham Pannell

Yeah, that’s, quite a sum to tot up. I’ve been very grateful to be involved in, a lot of the sharp end of policy developmental connections for 15, pushing 20 years now. I have to say while being Head of Grid at BayWa r.e as it stands in the UK and also been six years Renewable UK’s grid Chair. I was eight years Vice Chair of the DG Forums; that’d be the lead spokesperson for all DG working with, at time the DNOs to the best at connections. I am IREG, that’s the independent renewable energy generators group, lead policy advisor, and lead spokesperson for a fair energy future; which was the campaign  around 55 who came together with a view to, in the most practical sense work to reduce bills and ordinary people, and really by flagging our concerns about zone of pricing, that while it was a lovely idea academically when you work on cost of capital, delivery, zone of pricing, was going to end up saddling the bill payers with a, with that, an unhelpful increase in bills overall.  Now we’re working, what’s the next steps? We’re all looking forward to December at end of the year, governments reform national pricing delivery plan and how we’re going to practically move towards a reduced bill’s future.

00:04:26 – 00:05:00 – Catherine Cleary

Sounds like good news for one. Now, I mean, so bear bearing that in mind. I think we could have asked to talk about pretty much anything on this podcast, and you’d have taught us all lots. I guess, I think we thought timely I know both you and Kyle were at an event on Monday, to do with kind of NESO and, getting developer feedback on the Connections Reform process, and how that’s going.  I guess Connections Reform is constantly evolving and that’s one of the themes we thought perhaps would be worth discussing. Do, do you guys want to sort of just explain what the event was on Monday and what some of the themes that came out of that that were?

00:05:01 – 00:05:05 – Kyle Murchie

Absolutely. So, the title, I forget what the, the title end up being.

00:05:06 – 00:05:06 – Graham Pannell

The NESO’s Connections Customer Representatives Advisory Day.

00:05:07 – 00:05:14 – Kyle Murchie

Good that you remember that.

00:05:14 – 00:05:16 – Catherine Cleary

Surely it had an acronym, it’s NESO it must have had an acronym.

00:05:17 – 00:07:04 – Kyle Murchie

I don’t think there time. It was, quite fast paced in terms of how it all kind came together. And I know driven by a lot of the, trade bodies and their kind of engagement over the past few months, kind of highlighting that we really need to get to a day where, your colleagues from the industry across the industry really came together, to have a conversation.  And I think both inform NESO of, you know, kind of key points that maybe have communicated before, but also get through some of the noise, the inevitable noise, you know, there’s lots of things going on, there’s lots of people involved at webinars, you know, sometimes you do get bogged down in a lot of information, but not necessarily context behind it and actually, being able to move forward with the solution.

So, you know, it was interesting when we went into the room, it was set up where after the intros, we all had three rooms that we’d move around, three different kind of main topics that NESO felt were key topics, which was interesting itself. I’m going to come onto that and spent, everybody, spent 60 minutes in the first room and then 30 minutes in the next two rooms, kind of adding to the conversation that had been had before.

And I mean, instantly it was actually kind of called out by NESO sort quite a few times that, the group had already been really constructive, almost from kind of minute one, which of course we would be, we were all there to try to move the conversation forward. But I think they’ve come from a position of getting a lot of feedback, a lot of open letters floating around a lot of, you know, various conversations and comments on LinkedIn or webinars.

00:07:05 – 00:07:06 – Graham Pannell

You’re being polite Kyle.

00:07:06 – 00:07:08 – Catherine Cleary

Are you saying they’ve been slated a little bit you know.

00:07:08 – 00:09:09- Graham Pannell

Angry voices. It goes to the, the key thing with that, which was have an informed conversation, to build policy. And probably what I want to do is throw this back quite a long way and look at some of the history of connections over the last 10 years and some of the big movements in policy and show what triggered those. How did the good policy come about?

And when I say good policy, that is policy that is useful, that helps users get connections in a timely and efficient manner that gets us to the Clean Power future that we all want. What was screaming out of Monday’s event with NESO, was that NESO had held customers at arm’s length. Now, I can understand that when you are doing something as difficult and complicated as each queue to whole queue, where one is reprocessing every connection contract in the country, there’s a certain amount of I need to go into my bunker, find the solutions, and then come out. But as you said, Catherine Connections Reform is evolving.

You may think we drew the line and drew the rules when Ofgem made their decision in April or the CMP 434 and 435 decisions. It didn’t stop there. What is material in terms of a Mod App?  When are you allowed to engage of the customer account manager, will my securities remain frozen? All these things are being worked on as we speak, and it goes to a big thing of uncertainty. Which is difficult for users to manage and the risk of some people in NESO, many of whom in fairness, have come in other areas of the industry. NESO has grown very rapidly in a short space of time. A lot of these don’t have a lived in experience delivering connections at the sharp end. Are they writing rules that actually work in the round? Have they been robustly checked? Is there a forum to properly kick the tires on some of these ideas.

00:09:10 – 00:09:13 – Catherine Cleary

And I guess at the moment the answer to that sort of being no.

00:09:14 – 00:09:24 – Graham Pannell

Yeah, it isn’t. So, you’re going to indulge me. We’ll do a little potted history of Graham and again, no apologies for this, you invited me.

00:09:24 – 00:09:25 – Catherine Cleary

We want to hear it, come on.

00:09:26 – 00:14:13 – Graham Pannell

It was 2010, 2011, there was a huge amount of bad feeling about how particularly DNOs were dealing connections. It was very much DNOs at that time because at that time a big wind farm was 20 megawatts. Obviously, what turned, but the scale of things, it was very much DNOs in the front line. There was an increase in interest in connections. DNOs weren’t healed up tooled up to deal with that. Ofgem ordered them to hold a forum with customers because they recognised for smaller customers it’s just speed, and broad measure of customer satisfaction. Are you hitting an eight or nine out of 10? That doesn’t work for EHP. It doesn’t work for 20,30, 50 megawatts. It’s quality of service; it’s timelines of information so we can align programs. So, after Ofgem told the DNOs host a forum, tell everyone how you are working your connection business and they did. They hosted a forum, which they stood up and said, everything’s brilliant, we are brilliant, aren’t we? Brilliant, thank you very much. Of which two or three of us quite loudly and robustly objected. We had two of these before we decided that the list of queries that were being brought by users, there was no avenue for dealing with it.

So, I think collectively, almost at the forum with an Ofgem rep present and the DNO rep present, we said, we need to get together, we need take all these ideas, all these specific problems, contact with customers after the offer’s signed, interactivity timelines – the list was endless. How do we make sure they’re being resolved? How do who’s accountable for them being resolved? So, we set up first DG forum, which to get in a room with, at least a rep from each of the network companies and a similar number from industry to work through the list.  And if some are complicated, we park them because there’s reasons why and dialogue on both sides. Why do customers need information about what network capacity is available? Well, it’s so we can manage our portfolios to be in the right place to get efficient connections, that’s overall, in the interest of consumers because it’s lower cost overall. And that again, can you tell us which of your network are full? Listeners may not believe this, this is before the days of heat maps where you’d have to wait for the annual LTDS, which was six months out of date by the time it was printed to know what capacity was available six months ago. And even then, it was hard to pass.

So, we started this regular forum, and to say it was ad hoc was to say, we got into a room started writing that everyone had said on a flip chart initially, and said we need to corral this, so we need a lead spokesperson on each side. And I said, well, I’ll be the spokesperson for generation because I’m shy and cautious like that. And had a quick vote and they said, that’s okay, you can do it and then held that post for eight years. But what we did was make sure that each of the requests, we could cross out the silly ones or the unrealistic pie in the sky, and we could get to work on things that could fixed.  So, can we have heat maps? Can we have a register of generation, which became you better capacity register. We also saw that people couldn’t get hold of DNO planners, couldn’t have a sensible conversation, and the reason was they were too busy churning out speculative offers, this became a long program.

So, through this DG forum, and every other month, we would tour the country gathering ideas, we used to host regular in public events. We wrote rotate Glasgow, Birmingham, Cardiff to make sure we were covering the nation Great Britain. We, picked on this access to planners’ problem and suggested, well, do you know what, there should probably be some kind of fee for making an application for making an application as a minimum, and shouldn’t be a huge amount, but it should you’ve got to show some skin in the game, and that the gap, the connection offer expenses regulations 2018; shoutout to my favourite civil servant, Paul Hawker, for driving that through the internal government grid to make it a reality. And that came out of the DG forum, as in a plurality of other good things, including crucially, this idea that network companies couldn’t just say, “everything’s rosy.” We said: you should improve customer service, but you should write down exactly how you’re going to improve it, and you should come back and tell us how you did against the things you said you were going to do.

00:14:14 – 00:14:15 – Catherine Cleary

So, you said, we did.

00:14:15 – 00:14:58 – Graham Pannell

And this became—James Venie at Ofgem as it was at the time picked up on it, he loved it, and heput it into the price control, and that became the ICE—the Incentive on Connections Engagement—which then obliged network companies to deliver that customer service. At the time that was revolutionary. We’re talking customer service that went from there to there for EHV-scale generation. And perhaps it has slightly stepped away from that in recent years. I know it’s still there and I’m sure improvements are still being had, but we were really busting the low-hanging fruit at the time of: can you answer the phone? Can you explain? Can I have a tee-in or a loop-in?

00:14:58 – 00:16:14 –  Kyle Murchie

I think it was felt in this price control, or the upcoming control that we’re in at the moment that it could be effectively embedded within the DNOs. The DNOs would all run their own forums, and it would all be looking at—yeah, the big stuff,

as you say, was covered. And we were now looking at the fun-settling, specific problems that would arise in each DNO. But actually, what we’ve ended up with is: yeah, that’s all good and great, but nobody considered at that point, making the decision—Connection Reform and ultimately the changes we’re seeing now.

And actually, I was just—it was interesting because as you were talking basically about a forum that started 15 years ago, there’s many parallels to that conversation we had Monday. You talked about getting access to individuals—maybe planners then at DNO level—but today we’re talking about access to NESO, and engagement with the teams, engagement with the TOs, and still similar kind of engagement with colleagues in the DNOs. We talked about access to information, transparency of information—a register. Back then it was the ECR; on Monday it was a sort of similar register but on status of…

00:16:14 – 00:16:15 – Graham Pannell

Gate 2 status.

00:16:15 – 00:16:30 – Kyle Murchie

Exactly, and an update on connection dates. So, it’s amazing how actually it’s really gone full circle—what you’re talking about then, and the need and the opportunity and the benefit could be replicated right now.

00:16:31 – 00:20:46 – Graham Pannell

It’s having those avenues for real-world developers to feed in their risk, their understanding, realistic project development, delivery, what it takes to get a board to approve a sum of money for a reservation on a transformer that needs to be ordered into the network companies so you can have workable queue-management milestones.

And again, history—queue-management milestones came out of the DG Forum. It was the same problem of—you may recall there was a period where solar in particular had a hefty—I refrain from the word subsidy, but a hefty support mechanism at the time—that a Conservative government cut instantly and overnight. There was a queue of tens of gigawatts of proposed solar energy that suddenly turned around to their DNO and said, “Oh, solar? Oh no, I’m a battery now.” Is that fair? Is it not fair? We got the question. We had multiple rounds of consultation. We toured the consultations. We did in-person responses in Scotland and Wales.

And then we together—it wasn’t a network company person, it was myself, a Renewable UK representative, along with an ENA representative—we co-authored the original queue-management milestones approach, and in parallel to that, the allowable-change policy—what you can say you’ve change and that’s fair to keep your connection contract live. This was really important to me because a lot of the proposals coming out of Ofgem at the time were very money-tied. There was a certain group who would just like to auction off connection capacity, and it’s very “I’ve just done an economics degree and economics is the answer to everything—supply and demand,” which does have its place, but in the real world, siting of power stations—and there’s numerous studies, there’s a particularly good one by the University of Alberta on the history of generation in Texas—when you look at all the influencing factors, and it’s labour, land availability, school resource, roads networks—so many factors go into power-station siting. You can’t assume that one lever of its own will be the optimum pull or push. So, we embodied fairness in our response. You want—you have the block of land, and you need to move your substation from there to there because it’s better sited, or you found ground-nesting birds—that’s fair. You want to move it across the motorway into a different field—that’s not fair. Somebody else should have priority access to the grid. And perhaps without dwelling too much on it, but we were in the room signing off on queue-management policy with at the time an NG ESO system-operator representative who said, “We don’t need to apply this because we are transmission and we don’t have that problem.” And the DNOs did it. National Grid did not do it at the time. And here we are, 800 gigawatts later, looking how to rationalise our queue. The moral was: there were generator representatives on the panel who contributed even to the authorship: what is fair? What is a red-line boundary? Where is a point of common coupling? Who understands what that means? And that robust exchange—that ability to really kick the tires on the emerging policy—made it a better policy. You can have your own opinions about how it was implemented—I certainly have a feeling that network companies initially, none of them wanted to go first and risk being put in court, and their lawyers were very nervous about removing users’ connection contracts—perhaps overly cautious. So, it wasn’t necessarily effectual. But at least the tools were there, and we started to see it be very much effectual for at least the early milestones: thou shalt go into planning, thou shalt have planning.

00:20:46 – 00:21:43 – Catherine Cleary

And I think it gives developers certainty. I mean, some of those documents are probably some of the most referenced policy documents in the last five years when it comes to connections and grid strategy. So, I think having that in the public domain with a general feeling that both sides support that policy is really powerful. And I suppose just bringing us back to Connections Reform, where we currently are and the sort of current evolving solutions and challenges— I mean, I was conscious when we were talking before—actually we did have sort of advisory groups and developers feeding into Connections Reform when it was being created. So, pre-April this year, we had CPA as an advisory group. I mean, do you think—Kyle, I know you’ve been heavily involved in the trade bodies as well as Graham sort of involvement in all of these grid groups —do you guys think there’s a need for, you know— do we need CPAG again? Do we need a CPAG implementation group?

00:21:44 – 00:23:14 – Kyle Murchie

Yeah, I mean, I absolutely—and also I’d add to that first, you know, when you think about—yeah, you know, we had CPAG, you know, and I suppose we were just talking about the DG Forum, but more recently, yeah, CPAG, you know, thinking in history as well, we’ve had sort of Open Networks, you know, there’s been things that have been delivered through those forums. Code Mods as well. Effectively anytime where we’ve had a good group around a group of individuals in the room focused on trying to deliver solutions to problems and identify what those problems are before we get to them has actually delivered successes. Yeah, sure, there’s been things that not everybody would agree with, but generally speaking, there’s a lot of understanding and a lot of effort that goes into it. If you think about Reform—CPAG

and, you know, CMP 434 and 435—a lot of effort went into that. Then we got the methodologies, then into the protections. Much, much less user involvement, you know, a much smaller group of individuals making those decisions. Sure, some feedback loops, but certainly much more limited. And then certainly, as we talked about earlier, since then, really very little opportunity to feedback. And the feedback—because you’ve not got that particular forum—feedback then becomes quite linear and not very transparent. You know, that list was really interesting when we got into the room on Monday, there was a list of perceived key issues and key points, and we really didn’t touch on them at all.

00:23:14 – 00:23:15 Catherine Cleary

Because they were outdated or because they?

00:23:15 – 00:23:17 – Kyle Murchie

Maybe misinterpreted or?

00:23:18 – 00:25:07 –  Graham Pannell

This was NESO’s view on what the key problems were. And as Kyle says, it’s massively illuminating in itself that NESO’s connections-people idea of what the problems were not what developers came into the room with. Which just shows the gap in a robust interchange. Take a specific example of user liabilities and securities that need to be placed to maintain your contract. NESO have been taking cues from the angriest and noisiest people on their regular webinars. A webinar is a good place for one-way dissemination of information: something has been decided; it needs to be communicated outwards. Yes, they have their open-mic moment at the end where some people can vent their fury, but it’s not a cyclical exchange to really work up good policy. And so NESO’s been sort of guessing what’s the least-pain approach by the loudness of the feedback there.

Whereas if you had a group in a room, you could have developers who can inform how long do I need to get a letter of credit in place if I get an offer in June but there’s going to be a statement from NESO in July for updated securities—how can we line them up so I can put in a single credit? It’s efficient all around. Ultimately efficiency will filter through into reduced bills. So, let’s not waste everyone’s time. That kind of DG Forum. And interesting—you raised CPAG, the Connections Policy Advisory Group, which was seen as a vehicle to talk about the policy of Connections Reform under the Connections Action Plan. It has stopped. I don’t know if formally stopped—I’ve not been invited.

00:25:08 – 00:25:09 – Catherine Cleary

I’ve not been invited either, I think it has stopped, I don’t think you’ve just fallen off the list.

00:25:18 – 00:25:51 – Graham Pannell

And that matters because while I say something like the DG Forum needs to be restarted to give this feedback, so on securities policy, on milestones policy, on… it’s been so long since we paused transmission offers,

so what’s a sensible target-date policy? There needs to be some useful conversations about that with some experts from both sides in the room so we hear why they can’t do certain things as much as what we want to do on the developer side.

00:25:52 – 00:25:54 – Kyle Murchie

And we talked about that, the…

00:25:54 – 00:25:55 – Graham Pannell

It was the name, it can’t be just EG.

00:25:56 – 00:25:57 – Kyle Murchie

Yes.

00:25:57 – 00:26:18 – Graham Pannell

It needs to be transmission-connected. It probably needs to embrace transmission demand as well to an element. It needs transmission and distribution. So, I’m yet to formulate how to keep the room below 20 people—anything beyond that is not really a meeting: it’s not necessarily constructive. Thoughts are welcome, write them in the comments.

00:26:18 – 00:26:20 – Catherine Cleary

Yeah, exactly. Absolutely.

00:26:20 – 00:27:28 – Kyle Murchie

And we were just thinking about the way the session was set up on Monday where, you know, the network representatives were in the room—not every network was represented in each room—but there were always kind of two DNOs effectively and a TO. And it was amazing how—what I’m saying is—it’s amazing how constructive it was. I expected that it would be, knowing the individuals in the room, but we all actually had a lot of commonalities on particular issues or challenges that had been brought up.

And, you know, it’s worth noting that there are other groups out there that are obviously led through the trade bodies and a wealth of knowledge is collected in sessions like that where there’s a route for information to actually be collected, fed through and discussed with network colleagues and, you know, legal colleagues as well—we had some legal representation in the room as well, which was really helpful because that brings in a completely different angle, much more from an investor angle, on top of the developers. So, I think that type of forum—really thinking about the types of individuals that we need in the room and the types of representation—is going to be really quite key.

00:27:29 – 00:28:05 – Catherine Cleary

And I suppose that is important. I think sometimes you sort of think, oh, it’s kind of invite-only, who’s in the room? And is that just the usual suspect list or the people that NESO happen to know the email addresses for, but I suppose that’s what you’re pulling out—no, there’s a kind of pretty tried-and-tested route here, which is you’ve got the key grid groups—things like RenewableUK or any of the trade associations—who historically have done this, always been used to saying “Yes. Actually we’re 250 developers, but we’re pretty aligned on 85% of these key points and we’re happy to just send Graham.” And it works.

00:28:07 – 00:28:17 – Graham Pannell

Yeah. And I don’t want to give the impression of smoke-filled rooms, you just want a group with just 12 people or so, because that’s really productive, but that doesn’t stop you gathering information from the whole industry.

00:28:17 -00:28:18 – Catherine Cleary

And of course, feeding it back.

00:28:19 – 00:28:56 – Graham Pannell

And reporting it back. And going back to DG Forum, we would go do a live event in Glasgow; everyone was invited; all the feedback was recorded; the reps took that on and made sure the network companies understood it as well, because sometimes writing a post-it live—another developer can translate that two months later, whereas a new network-company policy rep might not understand it. So, it is to get all of the feedback. And to reiterate what Kyle said NESO approached at the top of the event on Monday and said, “Oh, we know all of your problems are unique.”

00:28:57 – 00:28:58 – Catherine Cleary

That’s interesting, isn’t it?

00:28:59 – 00:30:42 – Graham Pannell

And we were able to bring that back to well, no fundamentally we all have the same problem of uncertainty. And all the certainty that’s possible to give to users in this process is going to help not only the developers and delivery agents, but also the investors behind them. Because let’s not forget that Connections Reform has to work, or the UK is going to suffer a GDP hit. Frankly it’s not even just about clean-power delivery; it’s about confidence that infrastructure will be in place—generation, supply, flexibility, networks. The aims of Connections Reform—massively laudable. I would say the huge majority do support it. For a number of months, it was fine because the process had to happen. The uncertainty for a period was necessary. Now that it’s strung out for—there was pause since January, a decision in April, and we’re talking about people receiving their contract offers sometime next September—yeah, we’re now seeing that those slightly removed—holding the money—are more and more twitching. They didn’t really want to know about it. They wanted to know, “Will I get an offer in time? Is my project protected?” “Okay, you’re telling me it’s protected, fine.” And a few months ago, you could get through investment committees on that understanding. And now even protected projects don’t know if they qualify for Gate 2 yet. That has filtered back into “Well, I think I’ll just hold tight for a few months until I know,” and that could be really costly. So, we need to get to the certainty as soon as we practically can.

00:30:44 – 00:31:17 – Kyle Murchie

But on that—just thinking about—you know, another thing that came up was some of the assumptions that had been made. And I think if anything, the initial thing that came out of Monday was the ability to actually test out some of the thinking around those assumptions. You know, the big one was the conversation about 2028 projects—you know, we were really talking about 2028 projects onward. Well, why not 2026 and 2027? And the assumption in the room—from a legal view—was, well those have either all got FID or are already progressing anyway—they’re beyond that point. It’s the 2028 projects that are risk.

00:31:18 – 00:31:27 – Catherine Cleary

Because they thought the protections were sufficient confidence. Whereas we, as independent consultants, would absolutely not be advising someone, “Don’t worry, you’re absolutely fine with your 2027 offer, I’m sure nothing’s going to change.”

00:31:28 – 00:31:43 – Kyle Murchie

And even the TOs and DNOs in the room were going, “Well no—if the customer’s not been confident, then they’ve not instructed us to spend, so it’s not a case of, oh, the developer has been progressing, or the investor hasn’t been progressing.” There’s that full chain that has a big impact.

00:31:44 – 00:32:13 – Catherine Cleary

In some cases, you might have developers who were confident, you know, and you would still face network operators who’d say, “Actually, I’m still waiting on information here.” We’ve seen that for a number of projects, actually.

Really down in the technical detail—you’ve got projects going, “Well actually I’ve got a TO who needs to design a harmonic filter, but they don’t know whether they’re designing it for three customers to comply, or two, and NESO can’t tell them,” And talking about quite long-lead-time kit items. And actually, design decisions absolutely need to be taken now for things happening in 2027.

00:32:14 – 00:32:32 – Kyle Murchie

So, the connection point and the dates might not change if they’re protected under a particular protection clause, but as you say it’s all the detail downstream of that— of what order will we be connecting in? And that kind of detailed design has quite a big impact on what gets actually delivered in the end.

00:32:33 – 00:32:51 – Graham Pannell

And a worrying concertina effect—of everyone delaying a few months to a few months to a few months—that you still have a December 2027 that you must meet or you fear losing your contract. The demand for even senior authorised persons had to perform the switching as part of final commissioning.

00:32:52 – 00:33:04 – Catherine Cleary

Outages, outage coordination for 2027—that is not looking like a fun game. Although maybe we should make it a board game. Graham did let slip he’s a bit of a board-game aficionado. So perhaps—how connection outages.

00:33:05 – 00:33:08 – Graham Pannell

I do, I do. Anyone who’s been on a video call with me would have seen the wall of board games behind me.

00:33:09 – 00:33:11 – Kyle Murchie

Actually, “Connection Outages: The Board Game.” Could that be out for Christmas?

00:33:12 – 00:33:37 – Catherine Cleary

Can we just call it “Risk”?

Okay, so—but joking aside, I suppose from a Bay Wa r.e’s perspective, you’ve seen a lot of these challenges in project-specific cases as well, I’m sure, and what are your top three—you can ask sort of top three of kind of perhaps either the sort of challenges that you think are really really ripe for being addressed now before we get into offers being issued… or go bigger.

00:33:38 – 00:34:11 – Graham Pannell

To riff on a famous political speech: my top three are uncertainty, uncertainty and uncertainty. That’s a very good answer. Perhaps more specifically, it’s being able to align your program for delivery. And it goes to what you were saying earlier about the various detailed-design packages—even initiating land clearance or exactly which bay you’re going to connect to, therefore where is your cable route—to be able to line up getting your land rights. These things do not happen overnight.

00:34:13 – 00:34:25 – Catherine Cleary

And in terms of unlocking that, I mean, I suppose some of the ideas—there was sort of talk of less comfort, I suppose, maybe before they got Gate 2 offers. Is it actually just about improved communication? You know…

00:34:26 – 00:35:17 – Graham Pannell

There’s a rational dialogue that needs to happen for even protected or shortly-after-protected projects that were on paper 2026, 2027, 2028 need to be able to have a rational dialogue, particularly with the TO. And we need to see now—well, more or less as Gate 2 is declared first week of December—at that point those projects, we will know that they are in Gate 2. I’m sure there are some that have been pushed into Gate 1 by human error or otherwise and will need to appeal that—that’s a whole separate conversation—but at least you’ve got a piece of paper that you’re Gate 2 for a large number of projects. They then need to be able to align that delivery program, start looking at outages. There needs to be an allowance for the contract of moving kind of, sensibly pro-rata, but at the same time not allow a window for gaming.

00:35:18 – 00:35:27 – Catherine Cleary

So sensible modifications to the contract structures, which I guess we’re arguing would need to be non-gated Mods. But they need to—there needs to be agreement as an industry to what they are.

00:35:28 – 00:35:51 – Graham Pannell

It shouldn’t need a user to submit a modification. This should be—this has been on hold forever, let’s get in a room. Your contract was for July 2027. We both know a 132kV grid transformer needs to be ordered, so let’s move it to April 2028 by mutual consent; the TO signs that that’s an appropriate adjustment.

00:35:52 – 00:35:53 – Catherine Cleary

And at some point, they said here’s an ATV…

00:35:53 – 00:37:08 – Graham Pannell

And you still must meet your early milestones—I mean you’ve got to have been consented to get into this in the first place—and you’ll need to appropriately press on with your program from that point of Gate 2 approval and work rationally towards Project Commitment, which surely would come early 2026 for that kind of timeframe.

That will be proportionate, but we can’t, at the same time, allow someone to say, “Oh, you know what? My 2027 is now 2030, so I’m still Phase 1, but I want to kick my user commitment out to 2027, and therefore I’ve got nothing at stake here, and I can just keep plates spinning until I hopefully flip that development project”—that rational discussion, which—well, sorry, I’m literally going to chip in a moment—but that rational discussion, that’s proportionate to the delivery of equipment and land rights that could be informed with aligned queue-management and construction milestones.

There’s a lot of focus on the queue-management milestones— you’ve got Appendix Q—but there’s also the milestones—Appendix J—where NGED won’t get up and buy things they should order or bought unless you’ve passed a certain metric. They need to be organised as well.

00:37:09 – 00:37:27 – Catherine Cleary

So, should that be an automatic ask, then—that actually 2026 and 2027 projects, transmission level, need a bilateral three-way call with their customer-contract manager and the TO to agree actually what the Appendix-J milestones are sensible, sorry what the Appendix-J construction program and certainty delivery timeframe look like?

00:37:28 – 00:37:46 – Graham Pannell

Yes. We could put a metric on that to stop it being open-ended. You could talk about the uncertainty period since January when BCA applications were paused, or you could talk about April when Ofgem made their decision—count the months there—one is allowed to push back that date by that many months, because that’s the months of uncertainty you sat with. Something like that, I haven’t tested that.

00:37:47 – 00:37:56 – Catherine Cleary

Some kind of framework parameters, but ultimately it needed to be a sensible engineering conversation that says yes, we all agree this is actually deliverable.

00:37:57 – 00:38:49 –Kyle Murchie

I think from a milestones perspective, if you think about the later milestones anyway, and within two years of your connection date—two years after your updated offer—it would all be likely negotiated anyway. There’s no fixed timetable. So, I think having that—you know, it needs to have an open conversation anyway to a large extent.

And when you were talking earlier—I thought it was really key—you know, it’s not as black and white as either you have really hard-set rules which say, “Well, that’s your date so you have to manage it, you know, that’s what you entered into and that’s what you asked for so that’s what you’re going to get.”

Or you have whatever you want; it’s a free-for-all. There is that significant part in the middle, which is you’ve that conversation. If you go back years ago, this is how projects got delivered. A few projects got delivered on the date that was in their contract.

00:38:50 – 00:39:41 – Catherine Cleary

Well, I think—I mean, I would say our personal experience is that for large-scale transmission projects, that has never been the case. I have never seen a transmission project that has gone through its last couple of years of construction and commissioning and then energised on the date that was in its agreement.

We have always needed that flexibility to kind of, you know, it’s normally been to facilitate system access—the outage required by the TO. So that’s been NESO granting an outage on the network. And I think that’s going to remain the case. So, it’s not being driven by milestones necessarily. I think this is being driven by a reflection

on industry that we haven’t magically created a solution which gives us perfect certainty that says this project of Graham’s can magically connect on September the 1^st, 2027. Because I’ve got perfect weather forecast, I’ve done all my outage planning and so on. We know that’s not the case. It’s still a placeholder date. So, it still needs an engineering discussion.

00:39:42 – 00:40:51 – Graham Pannell

I’ve managed the delivery of a project that was at BCA version 22. That’s a record there. I haven’t got there yet. That was valid, every one of those changes. This also speaks to this rational conversation. It’s important to me that we allow some breathing space for the TOs to do good design and crucially good procurement.

I talk about this concertina effect of suddenly trying to rush in a lot of connections in a short space of time. What I have seen is TOs leaning on their existing framework suppliers—probably too much—or because of the internal bureaucracy of adding a new supplier is a barrier. But what that means is their existing framework suppliers are flat out, order books full. And what we’re seeing is prices that TOs are passing are essentially the price of saying, “Well, you’ve paid me enough, I’ll come off that job and prioritise your job instead,” which is adding a premium and it will end up in bills. And I’m not talking small amounts here.

00:40:52 – 00:40:56 – Catherine Cleary

We’ve seen TO costs almost double for a number of asset types.

00:40:57 – 00:40:59 – Graham Pannell

Which is outrageous.

00:41:00 – 00:41:09 – Catherine Cleary

I think it’s something that there is—again—a wealth of experience in the industry for developers who procure similar assets themselves. You know, this isn’t something which network operators need to deal with in isolation.

00:41:10 – 00:42:48 – Graham Pannell

We’ve delivered this same level of assets recently and bought them independently through an ICP—Independent Connection Provider. I’ve seen, for example, the backup LV supply or a UPS for a substation being quoted at £800,000 for some batteries to provide 25 kVA of sun drop load. Absurd. I’ve seen a TO try to quote a 33-kV circuit breaker, and you and I could go to a famous German manufacturer tomorrow and buy the standard one for about £80k—perhaps double that with all the installation—and being quoted £800k. And this is a symptom of poor procurement.

And I’m really hoping that Ofgem’s end-to-end review can shine a light on some of this. I also wind back to sensible discussions on program to allow the TOs to resolve this. I think we’re starting to see this recognised.

I know now—we at RenewableUK have signed off on a letter where a group of members have anonymously shared some commercially confidential data about this very point of TO price inflation, which we’re sending to Ofgem to influence this. I know there are people, there are individuals in TOs who want to do a good job, but there are also a lot of them who just want to go home at five o’clock and will just send you the price from the database.

00:42:49 – 00:43:09 – Catherine Cleary

And we are, you know, we are asking a lot in terms of what a TO is going to have to deliver over the next six months in terms of market design—you know—but then over the next five years in terms of build.

Fantastic. Well, I mean I think that is probably an amazing point to leave it there sadly. We could probably go on all day, but Graham thank you so much for your time and for joining us, and thank you very much Kyle as well, and thank you all for listening!