Energy developers are unaware of risk to investment due to circuit outages and stand to lose millions

PRESS RELEASE

Renewable energy developers are putting investments at risk of millions in lost revenue, by failing to plan for grid outages over the lifespan of projects. Roadnight Taylor has warned developers to urgently review the growing risk in their portfolios.

The firms analysis of data(1) from UK electricity network operators shows that 8% of renewable projects in England and Wales will each face an average of four weeks of downtime a year, over 40 years, due to planned connection, maintenance, and reinforcement-driven outages on the grid.

The UK’s complex electricity grid is a system that is evolving to meet the needs of new energy assets, balancing generation and demand to ensure a reliable supply of power.

Circuits require maintenance and reinforcement which result in planned outages. Alongside this, we are in a new era of next generation energy projects, including wind farms, solar farms and energy intensive projects like data centres, all of which require connection to the grid. This growing pipeline of projects requires circuits to turn off to allow connections to take place. Combined, this means that the number of planned outages each year is rising, impacting projects across the grid.

Hugh Taylor, CEO of Roadnight Taylor, says:

“It is likely that developers are unaware of the weeks and months of outage risks that many of their projects will be carrying.

“The pipeline of projects seeking to connect to the 132kV distribution and transmission networks, and increasingly the 275kV and 400kV networks, is ramping up. Consequently, this is simultaneously increasing both occurrences of planned outages and the scale of income risk to affected investors.

“Investors that have not assessed this impact for the full lifespan of projects across their portfolios are at risk of lost revenues totalling tens of millions of pounds, perhaps hundreds in some cases, which is largely avoidable. The expertise is available to manage this risk, no matter if the project is already acquired.”

Roadnight Taylor has provided advice and solutions for energy project investors that face financial impact from planned outages, with investment or asset management teams sometimes realising they have an issue after a project is up and running. One such example is a 132kV wind farm in Wales. It ran smoothly for the first five years before suffering revenue losses, with the developer then notified of an upcoming, seven-month outage, expected to cost up to £5 million in lost revenue.

This research highlights the need for the industry to ensure appropriate due diligence is carried out at the stage of the connection offer review, at acquisition, and during the operation of the project. Crucially, developers need analysis that qualifies and quantifies outage risk, especially for projects with single- circuit connections. Minimising the volume and frequency of downtime will save projects millions of pounds in revenue that can be reinvested into new projects, ultimately supporting green growth in the UK.

(1) Data and results : Roadnight Taylor analysed two random samples of 50 renewable energy schemes accepted to the 33kV and 132kV networks in England and Wales.

Results found that 33kV schemes have lower outage risk than the 132kV ones, though 8% still face higher risk of “abnormal” running (periods with outages). From the 33kV sample, 4% risk experiencing 30 to 50 weeks of downtime during their lifespans, while a further 4% were found to face even more extensive risks of 50 to 100 weeks of outages.

With more than a fifth (22%) of schemes found to be high risk, the 132kV network presents a challenge for developers, with 18% at risk of 124 to 166 weeks of downtime, and the 4% in the highest risk category facing over three years’ total time disconnected from the network during their lifespans.