Podcast: Questioning the caps and SSEP with Ed Birkett, Low Carbon

00:00:30 – Kyle Murchie

Hello and welcome to another Roadnight Taylor Connectology® podcast. I’m Kyle Murchie and I’m joined by my colleague, Catherine Cleary.

00:00:36 – Catherine Cleary

Hi!

00:00:36 – Kyle Murchie

And we’re really privileged to be joined by Ed Birkett, from Low Carbon today. Low Carbon is a large developer of solar, and they have been really instrumental in a lot of the Connections Reform space, so we are really pleased to have you here, Ed.

00:00:53 – Ed Birkett

Thanks Kyle, thanks for having me.

00:00:55 – Kyle Murchie

So, I think what we’ll do is kick things off by maybe giving a bit of an intro into kind of Low Carbon, yourself and, ultimately, what you’ve been most involved in over the last six to twelve months.

00:01:05 – Ed Birkett

Great thanks, Kyle. So, for those who don’t know, Low Carbon we’re a global renewable energy company headquartered in the UK. Our heritage is particularly in the development of solar assets in the UK, but we are active in every stage of the operational lifecycle of renewable energy projects, from origination, development, construction and operations. Since 2018, we’ve been one of the biggest players in the UK solar market. We’ve secured planning permission now for over two gigawatts of solar farms in the UK in that period, as well as doing quite a lot of solar in sort of the previous waves of development back in the rock and the fit era. And a lot of those solar farms as well have battery storage projects co-located with them.

Just briefly on me. So, I sit in the UK development team at Low Carbon, where I lead on our work on grid connections, particularly in the pre-delivery phase. So, from originating new grid connection offers and then taking those right up to the point where we’re ready to take a financing decision, and then there’s a separate team that goes and delivers the actual physical infrastructure, I’ve been heavily involved in the connections process. I’ve spent hundreds of hours on the Code Mod working groups for the various code modifications that underpin Connections Reform, as well as feeding in and working a lot with NESO, Ofgem and DESNZ on the various caps and all of the issues that we’ll get into.

00:02:38 – Kyle Murchie

Yeah, and you’re certainly not joking when you say hundreds of hours, because if we think back it feels like a lifetime ago that the Code Mod started, but the amount of hours that’s been put into it has been quite significant across the industry.

00:02:50 – Ed Birkett

And it was quite frustrating for me personally, because some of my colleagues had organised a trip to go and look at all sorts of different projects around the country that had been proposed and they’re doing a big road trip, and it was like four days military precision; they were going to see 20 different sites and I had to spend I think it was four Code Mod working groups in a row of six hours a day rather than going on that, which was frustrating. But we are now getting to the end at least of the of the Connections Reform process, or at least it’s now ready to become operational, so pleased that that’s done.

00:03:23 – Kyle Murchie

Yeah, we probably should say at the time of recording. So, we’re just on the day that the transmission evidence window is opened up and obviously the DNO windows have been opened up for probably between six and seven weeks. But yes, we, we’re definitely seeing the outcome of all that work that’s gone in previously. I suppose it would be good to hear from your perspective of what has gone well. What do we need to consider about from a Connections Reform perspective, thinking about the future and moving into the SSEP and the Strategic Spatial Energy Plan? So maybe starting off with Connections Reform?

00:03:56 – Ed Birkett

Yeah, so I think the first thing to say is that we absolutely recognise that there was a need for change. The grid queue really was getting out of control. The numbers that I’ve got here is that we were getting to 750 gigawatts of projects in the queue across transmission and distribution, versus NESO forecasts that talk about an additional need for maybe 150 gigawatts of new connections by 2035, which is an absolutely massive number. But there was, you know, on one metric that looks like it’s five times oversubscribed. I think there were a lot of zombie projects and there still are a lot of zombie projects in the queue. So maybe that headline figure of things being five times oversubscribed won’t look that bad once some sensible measures are applied to kick things out of the queue.

But we definitely see merit in the idea that we’re going to be prioritising projects that are readier to connect. That’s one leg of Connections Reform is that projects that are ready to connect will be prioritised. The bit that we get a bit nervous about is where you then have what’s called the strategic alignment criteria, as you know, where projects don’t only have to be ready, they also have to align with the plans that are set out by the government and NESO, and that’s the bit where really the devil’s in the detail and I guess we can come into the pros and cons of how those plans have been made so far and some of the plus, some of the pluses and minuses of that. I think it is a really big intervention in the market. It’s very clear like we had a world of independent regulation where we were really looking to have a competitive market deciding what types of projects come forward. It’s clear now that we’re in a new era we can see pros and cons of that. I think on the whole Connections Reform will deliver better outcomes than we’ve seen to date, but we do have some concerns about some of the details.

00:05:48 – Kyle Murchie

I think we want to get into some of those details now.

00:05:52 – Catherine Cleary

We like this – Ed brought notes, this is good! This is the level of detail that we like!

00:05:58 – Ed Birkett

I just want to make sure, yeah, get all the details right. So, on the Connections Reform process. So, as I say, we’ve got this, this readiness criteria that projects have to be ready, they have to have planning permission to be prioritized, or if they’ve submitted planning and at a minimum, they have to have the land rights. We absolutely agree with that – we think that’s completely uncontroversial, that you are using the project’s progress as a metric of how ready it is to connect, and that’s absolutely something we want to be incentivising.

We don’t see any controversial anything controversial in this readiness criteria, but it’s when you come to the strategic alignment criteria that we think there are more challenges, because it’s really then about how is that plan being produced? So, the key trade-off we see is between certainty for the networks and allowing sufficient flexibility in the caps in order to have competition and also to account for the inevitable attrition of projects. So, if I just break that down a bit, on the one side you’ve got the need for certainty for the networks; they really need to know which projects are going to go where, and that allows them to then crack on and deliver the network, and that means that you would have low caps. You would only allow a few projects into the grid queue, only the ones that the government and NESO think are really needed. On the flip side of that, you’ve got this need for competition and this need to account for project attrition, which would push you towards having higher caps.

On competition, there’s competition between projects of the same technology. There might be some solar farms or wind farms that are much more expensive to deliver than others, particularly because of the grid connections, but also because of wind speeds for wind farms and solar irradiation for solar farms, and there’s also competition between technologies. A very clear one actually is between onshore wind and floating offshore wind, where the plans that the government’s put out rely very heavily on floating offshore wind, and if that doesn’t deliver, the obvious backup to that would be to have more onshore wind. But will there be onshore wind in the grid queue? And we don’t think there will be, because we think that NESO and the government have really erred on the side of giving certainty to the networks, and that comes with some trade-offs in terms of competition and accounting for project attrition. We actually don’t believe that that trade-off has been fully explored within Connections Reform and the Clean Power Action Plan, which is what then operationalises and introduces the caps, and we think that is something that really needs to be thought about carefully when we come on to the next set of caps, which will be set through the Strategic Spatial Energy Plan or the SSEP.

00:08:34 – Catherine Cleary

So strategic alignment is going to carry on being a thing you know it’s not just something for the kind of Gate 2 to the whole key window. When the future Gate 2 windows open, there will still be a requirement to be strategically aligned, but you’re going to be being strategically aligned with a new plan.

00:08:47 – Ed Birkett

Yes, although the Strategic Spatial Energy Plan is only meant to come in from the end of 2026, which means probably the first offers coming out in 2027. And that’s one of the concerns we have is that there’s still quite a long time between now and 2027. And if it turns out that the caps are too low, then we may need an interim step where those caps get raised before we get to the point where we have this new Strategic Spatial Energy Plan.

00:09:16 – Kyle Murchie

Yeah, so CP30 version two.

00:09:19 – Ed Birkett

Yeah, well, the Clean Power Action Plan version two, although it’s already, has been changed.

00:09:24 – Catherine Cleary

Yeah, I think we’re on version three!

00:09:27 – Ed Birkett

So it would then be version four and it’s interesting, I suppose, just for our listeners. So, kind of going back to the Code Mods, it was really the Code Mods that set the sort of the methodologies for, and the kind of rules around being ready and that kind of readiness requirement and through that process the expectation always was presented that the majority of people who get a Gate 2 offer in that particular scenario will accept it and therefore it was one of the justifications for not having significant levels of competition. But obviously, fast forward and we’ve then got the methodologies in place, you’ve got the Clean Power Plan and, as you say, that’s now brought in a significant number of strategic alignment requirements. So, do you think we’re going to end up with a lot of projects getting a Gate 2 offer that ultimately, for whatever reason, don’t accept?

00:10:21 – Ed Birkett

So, I think ultimately, we believe there will be significant attrition from the point of projects getting offered a Gate 2 offer to being built and there’ll be attrition at every step. So, some projects won’t accept their Gate 2 offer. Maybe they’ll have found out between submitting into Gate 2 and receiving the offer that their project is not viable for some reason; maybe the securities will be too high. As you know, there can be issues in grid offers. At transmission, the grid offers tend to be less variable, at least in England and Wales. Maybe in Scotland there’s some more funky requirements that get added in more recently. So yes, there’ll be attrition then, there’ll also be attrition that developers may then decide they don’t want to progress schemes into planning because they do some pre-planning work, and they discover that their scheme is unviable through some survey work. Schemes may then have attrition after they’ve submitted planning and actually it’s a healthy part of the process that that some schemes do get rejected by the local authority or some schemes do get rejected by the secretary of state or by Scottish ministers. We see in Scotland, where they’ve got this onshore wind consenting regime, that you do have a proportion of projects that are rejected every time and that is not explicitly factored into these caps. These caps have not been set to allow for that attrition that will occur. In fact, it was actually ruled out that there would be uplift for attrition and we think the problem there is that, if you look at the timelines, if a project drops out because it doesn’t get planning, if you’re then going to replace it with another project that isn’t already being actively developed, you then end up with a risk of missing your targets, even if a project gets consent. Projects now are mainly financed using the contracts for difference or CfD mechanism. There are some projects that probably shouldn’t get CfDs because they’re bad projects, they’re expensive projects and, again, it’s a healthy part of the system that some projects don’t get CfDs in order to keep down prices. And then, even when projects get CfDs, not all projects get built. We’ve seen with the Hornsea 4 offshore wind farm that it’s been announced that that project is on hold, that project has a CfD, maybe it will come back with a higher CfD price in future, although there’s complex questions to the government there about whether it allows projects to rebid and in what timelines.

So, there is attrition. I do think Hornsea 4 announcement of that project is being put on hold is actually some new evidence of the real risks around attrition, and therefore I do think there is a case for NESO and the government to look again at the caps for this current round. So, the Gate 2 evidence is going to be in by the end of July. The new queue is not going to be formed until September. Ofgem specifically flagged in its minded-to decision and in its final decision on Connections Reform that once NESO has received the evidence that it can then redo the methodologies. So, it could redo the methodologies to introduce an uplift for attrition, for example, taking into account the evidence it’s received and the new evidence about the Hornsea 4 announcement and other things like that. So, we do think there is a strong case to look again at the caps even for this current round before we get to Strategic Spatial Energy Plan.

00:13:46 – Catherine Cleary

I mean that could be quite controversial potentially for developers who are thinking – well, I’ve made quite a lot of strategic decisions about how I’m submitting into Gate 2 based on these caps, based on that kind of alignment criteria. Do you think that’s a sort of a credible scenario that NESO will reopen those?

00:14:03 – Ed Birkett

Well, I think it has been clearly flagged by Ofgem. So Ofgem flagged it at the minded-to stage and in their final decision that they would expect NESO to look again at the methodologies once they’ve received the evidence, or at least that they are open to changes being made to those methodologies once NESO has all the evidence. At the moment, NESO is operating with imperfect information. NESO doesn’t know what these projects look like because developers haven’t had to say where their land is. NESO doesn’t know how many of these projects have submitted or secured planning and actually a lot of their data has been really quite poor throughout this process, which has been one of the frustrations. NESO will soon be in receipt of full information and once they have that full information of the Gate 2, I think it is sensible for them to then look again and consider whether there need to be changes to the methodologies.

00:14:55 – Catherine Cleary

And what’s the, perhaps can we dig into a little bit to, so, what’s the, you know, perhaps  the consequence of getting this wrong? So, when we say that you know the current Clean Power 2030 targets don’t include attrition, what do we mean here? Because I suppose I’m sort of thinking as a Network Engineer, actually there are some assumptions around attrition, for example. So, although we set a cap for a potential, you know, certain amounts of gigawatts of onshore wind, for example, when that goes over to a transmission owner, a TO, for example, they’re studying their network they don’t actually assume that all of those projects come along and connect. They do take some attrition into account. So, when they’re kind of determining which overhead lines we need to build, what network reinforcement we’re doing, we are already taking attrition into the mix. So is the risk here – it’s not that we build kind of stranded assets because we’ve assumed everyone’s going to come along and connect, it’s that we haven’t connected enough projects to meet 2030. Is that right, is that your kind of view, Ed?

00:15:57 – Ed Birkett

So, I break it down into two parts. So, what would be the impact of attrition on generators and what would be the impact on networks? So if we have, for example, let’s say, there is a lot of attrition of solar farms, for example at the planning stage post Gate 2, if the secretary of state rejects planning for those solar farms, the secretary of state will then be in a position where there are not enough solar farms to have competition in the CfD auction. Maybe even every solar farm would need to be procured, and you might still miss the target. So, what you risk, is you risk putting the secretary of state in a position where either he misses his targets, or he has to procure projects that are uneconomic.

00:16:42 – Catherine Cleary

With a higher CfD price.

00:16:44 – Ed Birkett

With a higher CfD price. And that could also apply to offshore wind; there’s a lot of consenting risk out there with offshore wind at the moment. A lot of very live discussions about consenting of offshore wind farmers, particularly in Scotland. There’s a lot of risk around floating offshore wind. It’s very nascent technology, currently very expensive. If that doesn’t come down in cost, really, the Secretary of State should have a built-in off-ramp to say, well, if the offshore wind, the floating offshore wind, doesn’t come down in cost, actually let’s try and keep some onshore wind in the game so that we have flexibility there. Otherwise, the Secretary of State is left in a position where he has to procure all of the floating offshore wind, or miss his targets, even if it’s very expensive.

00:17:25 – Catherine Cleary

So, we lack commercial competition in that scenario that’s the real risk.

00:17:27 – Ed Birkett

And look, NESO has put some counter arguments through. There’s some quite complex discussions about ranges and how those have been applied. Personally, I don’t feel that those arguments fully address it. I put in quite a long consultation response which I put on LinkedIn, that goes through some of the technicalities of how those ranges have been come up with and why. I don’t think it addresses the competition point but it’s definitely something that needs to be looked at again going forward and I think it needs to be looked at in this round.

On the network companies, there’s this technical point around how does the networks actually model their network? Do they assume that all of the generation is built as you say? No, that’s not the case. If we go back to the predecessor to NISO was ESO. They had this five-point plan. Key leg of that five-point plan; one of the points was around how attrition would be modelled, the construction planning assumptions. One of my big frustrations through this process and that I really pushed NE SO on, is what happened to that work. What did it deliver and how did that then inform the decisions that would be taken around attrition within the Clean Power Action Plan? And I don’t feel like we’ve seen a satisfactory answer to that. It’s not actually clear to me now how attrition will be modelled going forward.

I understand network companies will still model some attrition, but if the network companies are modelling attrition, surely the caps should also include an uplift, so at least it’s back-to-back, and I’m not convinced that’s the case and I do think that should be looked at before this current round.

00:18:58 – Kyle Murchie

And of course,  you’ve then got the layer of complexity of protection clause three, you know and potentially for a lot of projects to be over those caps. You know those caps could be exceeded in certain cases. Then you’ll also have projects that could come back in the future and still fall under some level of protection.

00:19:16 – Ed Birkett

Yes, it all got very complicated, didn’t it?  Because NESO is really resisting having certain types of grandfathering or protections and then actually, quite late in the day, we had some quite broad protections introduced.

I think Scottish onshore wind is the one where this is really interesting. The way that the caps have been set is that basically almost every offshore wind project will be in, including floating offshore wind, including projects at the earliest stages of development, that haven’t yet entered the planning system.

But on the flip side of that is that onshore wind in Scotland in particular has been really squeezed out. Although there’s, I think, a doubling of onshore wind in Scotland planned, that is a lot less than the pipeline that’s in planning. So what we see is that up to 8 gigawatts of Scottish onshore wind farms that are in planning could be kicked out of the grid queue, or we expect them to be kicked out of the grid queue, and a lot of those projects are currently on track to deliver by 2030, and they are being removed from the queue to make room on the grid for floating offshore wind farms, which almost certainly are not on track to deliver by 2030 and, on current prices, are way more expensive. So, I’m not convinced that’s going to be a good outcome for consumers. You do have this situation where these offshore wind farms that get kicked out can then be re-added once they get planning.

00:20:34 – Catherine Cleary

And that’s the protection clause 3 that Kyle mentioned.

00:20:38 – Ed Birkett

Exactly.

The problem with that is that as soon as the projects are kicked out of the queue, my understanding is that the transmission owners in Scotland will have to stop all work on the enabling works. So, in Scotland in particular not like it is in England and Wales the transmission owners, as you know, have to do certain enabling works. They have to build a power line.

00:20:56 – Catherine Cleary

Yeah, they build out to the generator.

00:20:58 – Ed Birkett

Exactly.

But all of that work requires environmental surveys, it requires consents and then it requires being built. All of that work, in my understanding, is that will all have to be put on hold as soon as these projects kicked out of the queue.

So even if a project gets re-added to the queue in 12 months’ time, work will have to have been put on hold for 12 months. You might have missed certain survey seasons. It might be that environmental data is now out of date and so, actually, although it’s only a one-year delay on the project being in Gate 2, it could be a two, three, four-year delay for the transmission owner to actually be able to deliver the grid connection. And again, I haven’t seen a timeline published by NESO that actually steps through this. We’ve put that in, and we think it shows that there’s a real risk of permanent delay to projects, particularly that are on track to deliver by 2030, currently are on risk of a permanent delay and that won’t be able to be recovered. So again, that’s something that could be looked at before the new queue is formed in September, and before this 8-gigawatts of onshore wind in planning is kicked out of the grid queue.

00:22:00 – Kyle Murchie

Yeah, and particularly, as you say, if that evidence is there, it’s live it’s proper evidence to show that those projects will go to Gate 1 and then be in a position to potentially come back to try and seek Gate 2 later – the unintended consequences of that delay.

00:22:15 – Ed Birkett

Yes, yeah, I think. One other thing I’d just like to say on the Connections Reform process for the current round is we understand the timelines have been very compressed and that everyone’s had to move quickly. You know, NESO was commissioned by the government to come up with its Clean Power 2030 advice. That resulted in big changes to how Connections Reform was actually going to be implemented the introduction of strategic alignment reform was actually going to be implemented, the introduction of strategic alignment.

We have been quite concerned about the lack of public consultation on the NESO CP30 advice and then on the government’s Clean Power Action Plan. So, my understanding is that there was actually no public consultation whatsoever on NESO’s Clean Power 2030 advice and then no public consultation on the government’s Clean Power Action Plan. All that there was potentially some industry working groups that only certain members of industry were invited to by NESO, but no public ability to feed in. We, for example, didn’t feed in anything to NESO when they were producing their advice, despite being one of the biggest solar developers in the country. And then, once that advice was provided to DESNZ, again, there was no formal mechanism for providing feedback to DESNZ. So, it was really a case of just emailing DESNZ directly, the government directly, or just putting things out in the public domain, like on LinkedIn, for example, to say we have concerns about these individual elements. I think that’s something that really needs to be looked at going forward.

I know the timelines were compressed, but the impact of that lack of public consultation, I think was really big and there were a couple of really big banana skins that we hopefully have avoided through this current Connections Reform but could have been really bad.

So, for example, the NESO CP30 advice appeared to ignore the government’s change in policy on onshore wind in England where the government was removing the de facto ban on new onshore wind farms in England. That was announced many months before NESO published its advice; that was about four months before, but that was not taken into account in the NESO advice so DESNZ then had to amend that in the Clean Power Action Plan. The other big issue was that the market for solar has really moved from purely distribution connections to now having connections at both the distribution network level and the transmission network level and again that appeared to have been ignored in NESO’s advice. So, there was a one zone it was GBR zone 9 where a lot of the big transmission solar farms are. In NESO’s advice that had a cap of zero megawatts for transmission connected solar and that would have kicked out projects including those that were granted permission by the Secretary of State in his first week in office. So that was incredibly frustrating.

00:25:08 – Catherine Cleary

And really required, relied on sort of industry outcry to fix it you know, I think there was an element of you know, actually it was published, as you say, everything moved very quickly and then you do. You know we are an industry of some quite clear loud voices, but I suppose you do get a different response if you’re just relying on reactionary kind of outcry from industry. I think you do tend to hear from some of the very loud voices, in fact we have probably got three very loud voices on this panel and you don’t get the same sort of proportional response from the industry as you would if you’re running a formal consultation. I think is one comment I’d make.

00:25:44 – Kyle Murchie

Yeah, because there’s lots of players out there who won’t be doing this day to day, you know they won’t be on podcasts, they won’t be feeding in information on LinkedIn, but have really important views, and views as well that might be a little different to the views around this table or, for those loud voices, and not capturing that does really have an impact on the quality of information feeding into there.

00:26:10 – Ed Birkett

And even at the unsolicited feedback that some of us were providing, it was really difficult to actually work out the actual underlying data.

So NESO, in its advice, published these. Well, it advised the government to cap the capacity of projects in 17 different zones for transmission projects. But the numbers for what those caps were, that they were advising them, were not in the main Excel data workbook, they weren’t in the main report, they were on charts in a draft data impact assessment pdf. You had to then read those numbers off the charts, so every developer in the country would have been working out is that 800 megawatts, or 900 megawatts? Reading off a PDF chart. The zones, there was a map provided but there were no shape files, they weren’t provided until three months later. So, again, all of the developers in the country were then tracing on their GIS systems where they thought the zones were. I think that’s some real low-hanging fruit going forward where at a minimum, any data that NESO is advising the government on where it’s not commercially confidential (which this wasn’t), needs to be made public, the shape files need to be made public, the actual underlying numbers do need to be made public, and that then allows it lowers the barriers to entry for providing feedback, which I think is absolutely good practice when you’re doing consultation.

00:27:28 – Kyle Murchie

And it means everyone’s talking about the same thing.

You know, it’s the worst situation. If people are drawing slightly different boundaries and therefore talking then about slightly different numbers, slightly different boundaries, it becomes additional noise that’s not necessary.

00:27:39 – Ed Birkett

Yeah, and actually what it’s true and actually what happened is, we think that DESNZ, in the Clean Power Action Plan, tried to correct some of the numbers for transmission solar, but then actually that then didn’t quite work because although substations were in particular zones, they countered towards a different one. So, there were substations that were physically in one zone that NESO said were actually in a different one for the purposes of the caps. So, I think that’s one of the things that then led to the government having to republish the Clean Power Action Plan in April where they changed numbers for solar. And again, if all of that was on the table earlier, through public consultation, we would have, we would have resolved those issues.

00:28:22 – Kyle Murchie

Yeah, it’s getting into that level of detail where you could have a project in one zone,  but the substation is connected to is in a separate zone.

00:28:27 – Ed Birkett

Exactly.

00:28:29 – Catherine Cleary

Yeah so I guess, moving on then, when we you know, in terms of the process obviously noting your kind of ask there about what happens this summer, in terms of reviewing those caps the next time those caps effectively are likely to be reviewed is with the introduction of the Strategic Spatial Energy Plan. I mean, do you think there are some learnings that we can take from this process into the SSEP, and how that’s produced?

00:28:55 – Ed Birkett

Yeah, well, definitely. So, we’re already seeing the Strategic Spatial Energy Plan moving forward at pace. I think NESO is probably already very close to the critical path to delivering that plan by the end of Q4 2026, so you know, they’re really, I think, feeling the pressure to get everything moving and get it published. But that can’t mean that we don’t learn the lessons from Connections Reform so far. I mean, I think the key lesson for me is that we need this public consultation and unfortunately, the way that NESO is running the SSEP at the moment, I think, is with an extreme level of confidentiality. So the governance process I would describe as a closed governance process where there are industry working groups but only organisations that are invited by NESO to be on them can actually see the materials that NESO is working through, and then those members of the industry working group, particularly trade bodies, are asked to then get feedback from their members and provide that then back to NESO.

But that might mean, for example, that someone like Roadnight Taylor might not be a member of the right trade body. You might want to provide your feedback publicly, but you wouldn’t be allowed to do that, even if you could get it. There might be an equivalent of Roadnight Taylor in Germany, for example, that’s been through a similar process. They almost certainly won’t be a member of a UK trade body, so they won’t even see the material; they won’t have any chance of providing any feedback. One thing we saw was that NESO was asking the trade bodies to get feedback on a particular issue. I’m not sure if I can say what it is, otherwise, I might get my trade body in trouble. The trade body then had to get views from its members, but it was not allowed to show the members the slides and the content that NESO is seeking feedback on. So, we, as members of industry, had to provide feedback on detailed proposals made by NE SO from a description of the materials from our trade bodies.

00:30:51 – Catherine Cleary

That’s just inefficient, isn’t it?

00:30:53 – Ed Birkett

Well, I don’t think that is a defendable position, and we have moved on a bit now where the trade bodies are now allowed to share some more materials with their members. We’re being asked at the moment to provide feedback on some initial outputs from the modelling. I wouldn’t say that they are actually outputs from the modelling; they’re descriptions of some outputs from the modelling. So, again, we’re moving in the right direction. But I think we should all, as an industry, really be pushing NESO to say – why is this confidential? Why are the actual initial outputs from the model confidential and why can’t they be published? And, equally importantly, the inputs; how many inputs can be released? What cost assumptions are being used? Are there any constraints that are being put on, like annual build rates for particular technologies, because it might be that the industry has views on that and might have expertise on that that can be fed in.

You know, there’s so much going on with SCP that maybe some of this has happened already and I’ve missed it, but from what I’ve seen so far, there is a lot more that can be done to make this process open. I think what the risk is, we end up with NESO publishing the draft SSEP or publishing it for the government to decide then which scenario to choose, and at that point the industry actually sees what the outputs are.

00:32:15 – Catherine Cleary

And says we don’t agree with that.

00:32:16 – Ed Birkett

Yeah, and says this isn’t workable, but then we’re now in a position where it’s too late to change anything, and so then what happens?

00:32:23 – Catherine Cleary

And I think this is quite interesting in some ways coming from you guys as a commercial developer, because I think, if we go back to perhaps where NESO have come from in terms of strategic planning, they’ve had the holistic network design exercise that they ran when they were the ESO that was looking at offshore wind effectively, so had a very sort of closed group of developers and I think they probably felt that there was a want from the developers to, you know, keep some things confidential, you know, so people could feed in cost assumptions. For example, they had some supply chain members, you know, and I suppose often it was that the data was going from those, you know small number of parties into NESO. It was important, you know, IP commercially sensitive. They didn’t necessarily want that shared outside that group, but actually it sounds like potentially that’s not the case anymore. There’s no, you’re saying we’re a commercial developer, we’re very happy to feedback and we don’t think it needs to be confidential – we want to put that stuff out in the public domain.

00:33:16 – Ed Birkett

Well, I think at the moment we’re not actually being asked to input project level data. We’re also not being asked to input from what I’ve seen, we’re not being asked to input sort of generic input assumptions like costs or things like that. Yeah, if you get down to really detailed discussions about how your connection will actually be designed, which I guess for the offshore wind farms is what was happening with the holistic network design, then there will be some more confidentiality requirements. But most of the material that I’m aware of as being in SSEP, I don’t see commercial confidentiality. This is high level modelling, I think there’s 17 zones again, so it’s not going into the individual projects and actually NESO is very clear about that, that the SSEP is not about individual projects.

One example where we need to, I think, more understanding of what NESO is doing is around how co-location is going to be modelled, c o-location of, for example, solar plus battery or wind plus battery – this is one of the key issues that wasn’t resolved in the Clean Power Action Plan and it was sort of said, I think, by NESO that they saw it as something that co-location almost certainly has benefits. But it’s something that we will look at later. Well, we’re now into later SSEP and so we need to understand exactly how co-location is being modelled. In particular, we need to make sure that NESO is modelling the availability of connection bays at substations and the cost of having to build new substations. So, if you have one solar farm and one battery, each having their own connection into a substation, that could trigger the need for a new substation, as you know and I’m sure you’ve seen. But if they share, if it’s a co-located project, it might be only one bay, a new substation might not be needed; huge cost saving for consumers because a lot of those costs of substation extensions are socialised through, that’s just how transmission charging works.

00:35:06 – Kyle Murchie

But of course, your connection as well, the actual physical connection, it’s cheaper as well.

00:35:11 – Ed Birkett

Yeah, exactly.

So, adding a battery to a solar farm is incredibly cheap. The additional grid connection cost is incredibly low but at the moment there’s no allowance for that in connections policy and Connections Reform and the benefits, I’m not sure those are being accurately modelled through the Strategic Spatial Energy Plan.

00:35:36 – Catherine Cleary

And maybe some of that detail would. I think, perhaps just kind of defending the sort of principles of we have the Strategic Spatial Energy Plan, which is, you know, really quite high level, what kinds of generation are we going to get in what kinds of areas, so that we can work out you know roughly what sort of power flows might we see across, kind of key boundaries in the network that will then feed into what we’re calling the, Centralized Strategic Network Plan, the CSNP, which is much more, you know, let’s start drawing some lines on a map to say we need an overhead line here, or this would be better being done as a maybe an HVDC link, and you know, and we’re going to need some substations. So, when you’re talking you know I was just thinking there when you were talking about bays and bays sharing you know it’s something I think we definitely think there’s loads of opportunity for in the future. Actually, maybe that’s the next step, maybe it’s the CSMP, not the SSEP.

00:36:19 – Kyle Murchie

Maybe that’s also where the more confidential data will come in as well. Thinking back to the listing network design, those details are probably going to be at that lower level, not the SSEP.

00:36:33 – Ed Birkett

I’m not sure I agree, actually because it is, I believe, the SSEP that’s going to be used to revise the caps in Connections Reform. And so, this is something where there’s not much detail in the SSEP methodology. The SSEP methodology says there will be an interaction with connections, but it doesn’t set it out. My understanding is that SSEP I think the basic assumption should be SSEP will basically create some new caps that will replace the existing caps and within that we think there needs to be an allowance for co-located projects in general, and so SSEP needs to model the benefits or disbenefits of co-location in order to then justify creating an additional allowance for co-located projects. Yes, if you then get into the CSMP, you could then look at bay sharing for individual projects, although really that I think should just be looked at by the transmission owners as part of the Gate 2 process, and that’s actually another concern we have. Is that, you know, is that policy on bay sharing sufficiently well developed at this point the NESO and the TO policy to allow that to really be considered as part of the Gate 2 offers, or actually are we going to have to come back later and look at that and start amending offers again?

00:37:43 – Catherine Cleary

Oh, we need another podcast on bay sharing I think, yeah.

00:37:47 – Kyle Murchie

I think we could have a whole other podcast.

00:37:52 – Catherine Cleary

Absolutely, but I think the message that should go out is there is a policy on bay sharing, yeah, so I think my view is that a TO is absolutely not precluded from offering a Gate 2 offer which involves base sharing. The problem, I think, will come in that there is no obligation on them to do so and that it would require, you know, direct bilateral conversations with the two entities, the two customers who might be involved. So,   I think that’s a time frame challenge.

00:38:13 – Kyle Murchie

Commercially I think it’s quite challenging, but technically.

00:38:16 – Catherine Cleary

But it is a possibility. So, you know, let’s be optimistic.

00:38:20 – Kyle Murchie

So, we could chat indefinitely, but I think it’s good to maybe kind of bring that to a close there and kind of natural close. So, what are, in a couple of bullet points, what are your kind of key takeaways, key messaging that you want to to get across from today?

00:38:38 – Ed Birkett

Yeah, thanks, Kyle.

So, I’ve got one on the current round of Connections Reform and two on the Strategic Space Energy Plan.

So for the current round of Connections Reform, once the Gate 2 evidence is received at the end of July, I really think NESO needs to look again at whether or not there’s a case for raising the caps through changing the methodologies or through advising the government to change the numbers in the Clean Power Action Plan, and that would ensure that these reforms are sufficiently future-proof to allow for the attrition of projects, which will inevitably incur, any developer will tell you that, and also to allow for strong competition between projects going forward so that we get the best outcomes for consumers.

On SSEP, I think the first ask is that the process becomes much more open and that confidentiality restrictions are only applied in very limited circumstances where it can be absolutely justified and there are lots of public consultations run. And secondly, we need to understand what the interaction is going to be between the Strategic Spatial Energy Plan and connections. That seems like a ripe example for a public consultation on how developers think that should work and how the learnings they’ve had through Connections Reform maybe inform how they think SSEP should interact with connections.

00:39:52 – Kyle Murchie

Perfect. Well, thank you very much, Ed, and thank you very much everybody else for listening. Certainly, join us again for the next podcast. So, all I’m left to do is say thank you much, Ed. Thank you much, Catherine, thank you.

00:40:05 – Ed Birkett and Catherine Cleary

Thank you.