Grid News and Views #10

00:05:09 – Pete Aston

Hello and welcome to another Connectology podcast from Roadnight Taylor. I’m Pete Aston and I’m joined by Catherine Cleary, Philip Bale and Nikki Pillinger. It feels like a long time since we’ve done a podcast, we were just saying, so we might be a little bit rusty, but we’ll do the best we can, and we’ve all had the fits of giggles just now as well, so we’ll try and keep that out of the podcast as much as we can.

So, this is going to be a grid news and views update. So, there’s plenty to talk through, as ever, but top of the list is, as ever, Clean Power 2030. So, we’ve done quite a few webinars on this recently, so we’re not going to go into loads of detail, but I think it’d be good to just update on some time scales. So, I don’t know, does anyone want to kick off with some time scales? Anyone got any particular burning time scale from the CP30?

00:57:00 – Catherine Cleary

So, we should probably time stamp this in the sense that we are recording at the beginning of February, and we are, so we’re still awaiting decision from Ofgem, which we are expecting, so a decision on the CUSC Mods and a minded T position on the license changes, hopefully at the end of February.

00:01:17 – Pete Aston

Yeah, Kyle reliably told me that it’s going to be the 28th of February.

00:01:22 – Catherine Cleary

That is what it says in the CUSC Mod spreadsheet tracker, which is never wrong, obviously, but I think technically they have committed to definitely doing it by the end of Q1, which is March.

00:01:31- Pete Aston

Yeah, so when they approve that, that means that the CUSC Mod CMP434, 435 are approved, but there’s like …

00:01:44 – Catherine Cleary

And there’ll be an implementation timeframe set with that approval decision.

00:01:47 – Pete Aston

But then there’s something like a 56-day approval period, sort of license period, before the license can change for the methodologies.

00:01:56 – Catherine Cleary

Yeah, exactly, I think it’s for the methodologies you say, Pete, because the license condition changes are separate from the Code Mods themselves. So, to approve the CNDM methodologies, the gate team methodologies, and the project designation methodologies, they’re making a minded two decision, and then that has to have a notice period associated with it before those licenses are actually changed.

00:02:17 – Pete Aston

Okay, so that means that because the date that everyone’s really waiting for is the application of Gate 2 to the whole queue, is going to, you know, where the existing queue gets all mashed up and turned around through the complicated methodologies, but that’s, at the moment, still likely to be May, do we think?

00:02:34 – Catherine Cleary

I think that’s where our end of February, plus 56 days, gets us to May.

00:02:38 – Pete Aston

Okay, fine, so your guess is as good as ours as to whether that’s actually going to happen or not, but we’re all looking to see if that happens and it’s possible, or quite likely that I guess maybe some sort of portals or something, could open where applications maybe could be submitted prior to that time – or do we not think that’s going to happen?

00:03:00 – Catherine Cleary

Nikki, you were talking about DNOs potentially looking to get pretty organised now to start that, because they’re going to have you know thousands of customers coming back to them.

00:03:08 – Nikki Pillinger

Yeah, so they are going to write to everybody, but ideally they are looking to, because it’s a whole new kind of IT system for them; but they are looking to get them up and running. I mean, I say all of them, I’ve had it sort of confirmed from a couple of the DNOs that they are looking to get portals up and running within the next couple of months.

00:03:25 – Catherine Cleary

Whereas I imagine at transmission that will probably be more of a, you know, a kind of form submission, which I imagine they might use the existing portal and so on, but yeah, yeah, I guess that…

00:03:37 – Philip Bale

Because I’m already starting to see customers start to ask of which evidence should be forming, what format is it going to go in. So, I think people are already starting to think about trying to form that evidence and also concerned around ultimately it requires the DNO to process it and go through and the concerns of what happens if it is late and delayed and everything else.

00:03:54 – Catherine Cleary

Yeah, so what we don’t have at the moment is, although there is in the methodologies, in the Gate Two methodology, there is a like, a clear list of sorts of like the evidence that will be required, we don’t have, no one has a form yet to fill out. So, there’s nothing, don’t panic yet if you haven’t filled one in.

00:04:10 – Pete Aston

Through Dad’s Army.

Okay, talking about Dad’s Army and not panicking, a bolt fell out of my chair earlier – I’m hoping that it doesn’t collapse.

Okay, so still on CP30, their new applications have been frozen, haven’t they too? That happened what a couple of weeks ago that new applications for generation schemes are now frozen.

00:04:31 – Philip Bale

And Mod App.

00:04:32 – Pete Aston

And Mod Apps.

00:04:33 – Philip Bale

And project progressions.

00:04:34 – Pete Aston

Yes

00:04:36 – Catherine Cleary

So, all new, any kind of application that would go to NESO, apart from demand applications – which we’ll come onto in a minute, and..

00:04:45 – Philip Bale

And emergency ones.

00:04:46 – Catherine Cleary

Sort of emergency, not panicking Philip.

Safety critical, and kind of you know like, I guess, delivery critical Mod Apps, so like projects that are in construction and so on. But for everything else, yes, the application freeze; everything had to be submitted by the 29th of January, so, and clock started by the 12th of February, which is next week. But if you haven’t already submitted it, it’s too late.

00:05:10 – Pete Aston

And then demand applications have got a little bit of a longer time – I think it’s 21st of March is the deadline for demand applications to go out. So, if you are listening to this, we will get this published before the 21st of March podcast. So there will still be some time for demand schemes to be submitted for transmission connections. Then there’s something, there’s quite complicated rules around transitional offers – so do you want to just tell us what a transitional offer is, Catherine? Because …

00:05:44 – Catherine Cleary

I mean, I didn’t prep for that one.

00:05:45 – Kyle Murchie

I know Kyle’s not here.

00:05:46 – Catherine Cleary

Yeah exactly!

So I think a transitional offer is that what NESO have called offers which were given to customers, which essentially say a bit like a step one offer when we had the two step offer process in England and Wales. Here is a very indicative offer, subject to the outcome of Connections Reform.

00:06:06 – Pete Aston

I think it’s a Gate One offer, but they can’t call it Gate One yet because we haven’t had that process.

00:06:12 – Philip Bale

Light touch, very little assessment, which then also leads on to obviously technical competence of the application if you’re not actually studying them properly, but obviously they will eventually need to study them as part of the CP 2030 outcomes.

00:06:25 – Catherine Cleary

Yeah, I suppose the important, there were a couple of kind of, probably where you were going with this Pete, but there were a couple of big questions about transitional offers. The first one was – if I’ve only got a transitional offer, am I like, in the queue enough to be considered in the Gate Two to the whole queue exercise? And they have very clearly said yes. So, if you have a signed transitional offer and you meet Gate Two, you can still get a Gate Two offer. So, I guess that’s when that like restudy work comes in. But you mentioned that you think there might be some different rules around whether or not somebody holds a transitional offer can submit a Mod App at the time of meeting Gate Two.

00:07:01- Pete Aston

Yes, Kyle was telling me this, so unfortunately Kyle’s not here to give us any details. But, yeah, so I think that was possible, that can happen. Whether that actually needs to happen as part of the Gate Two application process, I’m not sure yet, but yeah, we’ll maybe provide some more details on that at some point. Okay, moving swiftly on from the items we don’t know very much about.

Okay, moving on, then, let’s pick up on the CUSC Mod CMP446, which is all about increasing the threshold for transmission impact assessment. So, Nikki, do you just want to sort of briefly let us know what this is?

00:07:48 – Nikki Pillinger

Yes, so this is I think it’s come about broadly because of the local power plan that Labour has. They want to encourage community energy and community groups, and the issue that we have at the moment is that even community groups are getting quite caught up in their transmission works assessment. But if you increase that threshold of five megawatts then that does actually cover quite a lot of small community projects. Yeah, small community wind or solar, that’d be really really positive for them. The proposal is to bring it up from one megawatt in, it’s in England and Wales, it’s not in Scotland. So, from one megawatt to four point nine four megawatts, not quite five, there’s a rounding. And then in Scotland it is, I think it is, from 50 to 200 – 200 or 250?

00:08:39 – Catherine Cleary

It’s going to be 200 kilowatts across all of Scotland, at the moment the thresholds were 50 kilowatts in SSE region and up to 200 in Scottish Power region, so its uniformly probably 200.

00:08:52 – Nikki Pillinger

Yeah, so from 50 up to 200 across Scotland, so yeah, it’s very positive. They’re aiming to bring it in for, in line with the sort of Gate Two submission window essentially so it should be May. It will be retrospective, but not for connected projects, it would only be for projects that are accepted, not yet connected. I don’t think there’s a huge amount of these projects around. The DNOs have, I think, done all their own individual impact assessments on what this might actually mean.

00:09:22 – Pete Aston

I think it’s something like 380 projects or something.

00:09:26 – Catherine Cleary

That they think are affected?

00:09:27 – Pete Aston

Yeah, at the moment.

00:09:28 – Philip Bale

I think you might find that that will go up a little bit because, as well as for the community groups, which is obviously very important. One of the things that we see is the industrial, commercial side of things, so where you’ve got someone that wants to decarbonise in the owner factory and we’ve had projects which are above a megawatt, less than two megawatts, where they’ve been told that they have to wait till 2037, wait for two new GSPs to go through and be constructed. So those are the projects I think are going to end up coming through. But there’s still, in the early stages, still working through on what will happen, what’s the rules, what’s in, what’s out. It’s going to be very tricky for people who’ve got things like standby generation does that count, does it not? And CHP plants and lots of other things going through. So, there is some fine point that’s still being worked through, but obviously we have an observer who’s on there and we have clients who are also on that working group as well and I think hopefully now there’s enough depth and breadth on the working group – that means a lot of these things will end up being worked through. But it’s a tricky one – I think we’re all very much supportive that it’s a good move in terms of going through, that it unburdens transmission system operator and yet in terms of the assessments they do. One of the things I think has to just be carefully assessed is making sure that it doesn’t destabilise the market in the way that it goes through, which increases risks for other people. But I think there is enough clever people in the group that they can find that happy balance.

00:10:50 – Pete Aston

Yeah, I think Philip’s referring to everyone else rather than me.

00:10:53 – Catherine Cleary

You’re just an observer, it’s fine. You don’t need to be clever.

And Pete, what’s the five-megawatt threshold? Is there a consensus as to whether that applies to the export capacity that someone has applied for, or how much generation they’re planning to install? So if I want to install 20 megawatts of PV, but I’m going to use it all in my factory and I have zero megawatts of exports?

00:11:17 – Pete Aston

No, there is no consensus, but we should find that in the consultation that is due to come out tomorrow, as of the date we’re recording this podcast, and it will be open for something like five days, so by the time this podcast has gone out and you’re listening to it, unfortunately, consultation will be closed because it’s very, very short, but we’re expecting the consultation to have the sort of main proposed idea is probably going to be based on installed capacity and sort of an option, the wacom as they call it, based on export capacity.

00:11:52 – Catherine Cleary

Okay. So both options being considered?

00:11:54 – Pete Aston

Both options being considered, but yeah, it’s a bit split I think as to the views you know and understandably, lots of developers are quite keen on it.

00:12:04 – Catherine Cleary

Yeah.

00:12:05 – Pete Aston

Being reduced to 5 megawatts, being sorry increased to 5 megawatts. But I think there’s probably some developers who are like well, actually I just do big projects and so what’s going to be the knock-on impact for my scheme if all these now 5 megawatt projects get free ride? And we were talking earlier, I think, about transmission, ANM schemes and so on. Are these sub 5 megawatt schemes going to not now require transmission ANM, and does that mean that schemes who are above 5 megawatts get worse curtailment?

00:12:36 – Catherine Cleary

Yeah, their headroom is eroded.

00:12:38 – Philip Bale

And one of the things that we’ll find is it will be very location specific. So, where you’ve got GSPs that have fewer transformers, you could have a dozen 5 megawatt schemes, that ends up making a very material impact on a GSP versus another, much bigger GSP, whereas in the grand scheme of things it’s going to be in the rounding errors.

00:12:55– Pete Aston

Yeah, and there was a very long conversation on the group about rounding, which was not that exciting but, I suppose, quite important, which we won’t go into now.

So, yeah, that’s CMP446, increasing the TIA threshold, which I think in general is going to be quite positive for lots of schemes and lots of smaller customers, like the community schemes and so on.

Okay, moving on, Catherine, you want to talk about the securities freeze, that’s sort of part of the overall Clean Power 2030 piece.

00:13:28 – Catherine Cleary

Yeah well, probably another piece of goodish news, we like good news in January, don’t we? So, obviously, this is a letter which has come out from NESO it’s actually, it was a letter that went directly to contracted customers of NESO – so not everyone may have seen this letter, but effectively it announces a freeze in everyone’s securities for their cancellation charge liabilities. So normally customers would have got like an NM statement in January and another one in July for sort of the next two security periods, so that’s running from March to October, and then from October to the following March. The freeze effectively says that everyone who’s currently contracted their liability they’re not going to get issued those statements this year, so, no one gets a January statement, no one gets a July statement, so that the security payments they’re providing if they’re providing cash security, or if it’s a letter of credit, or a bond that just gets frozen at the current amount. There has been quite a lot of discussion since then to just sort of clarify what does that mean for people like embedded customers? So embedded customers won’t have got a letter from NESO, but we have started seeing DNO’s come out, haven’t we this week with some really good updates to just make it clear that, yes, this freeze, applies to everyone who’s currently contracted. If you’ve had a previous NM statement or security statement from the DNO, again your security requirement is frozen. Your liabilities, so lots of people have asked us, you know, like, if your securities are frozen, does that mean your liabilities also frozen? And effectively NESO have kind of written a statement to say that in the event a customer cancels, they would basically look back to the last statement and follow the kind of business-as-usual process for recovering cancellation liabilities. So, I guess if you’re on actual liabilities that’s always like a reconciliation process anyway. So, I suppose they’re probably worth being mindful of that there could be increases in customers’ actual liability even though your securities are frozen.

00:15:32 – Philip Bale

I think at that point it would be, people be sensible to be aware of the CP2030 process and the rules and the processes. And if you were going to cancel the project, is it better to do it now, is it better to not receive a Gate Two offer and then cancel projects when, at which point, securities could be refunded?

00:15:50 – Catherine Cleary

Yeah, yeah.

00:15:51 – Nikki Pillinger

Yeah, the more sensible option. I don’t think we’d see many people cancelling between now and May because you’d just not go through that process and get it all back.

00:15:59 – Philip Bale

There is a lot of people, especially the people that are the smaller developers, the local authorities, who may not be quite as aware of the process that’s going through, because the whole process is very long and very detailed and very complicated.

00:16:10 – Catherine Cleary

So, generally, securities freeze is genuinely good news and its good news for everyone transmission and distribution customers. But, Philip, you made already a point about there are some people who might see securities required if they’re like in a sort of in-between stage at the moment.

00:16:30 – Philip Bale

Yeah, there’s, I think some people will be aware that some DNOs that have received project progressions, outcomes that they don’t think are sensible or right or misleading, or don’t have the right figures in, so therefore they haven’t been signing them.

00:16:42 – Catherine Cleary

The DNO hasn’t been signing it?

00:16:44 – Philip Bale

The DNO hasn’t been signing it, which then effectively means that it hasn’t been signed and can’t be signed by NESO. And obviously at that point, that means that those parties may have been given their indicative NM statements, of this is what we’ve received, but you’re not formally liable for these until you get a formal variation or until you’ve signed up to them. Obviously, those parties they don’t have anything to freeze at the moment, unless the DNO has accepted it and not passed it on to the customer. And the DNO may still want to recover the money that they’ve put securities down for, because some of the DNOs have been accepting things, trying to work it through and then only passing on the security to the customer at the point that they feel like they’ve rectified things. So, there is a bit of greyness for some of those customers in those scenarios. But I think you put it right, Catherine – if you’ve received a formal ANM statement and you’ve placed securities, or you’ve received it and signed on to it and it says zero, that means you’re in the clear. If you’ve been given a draft copy or not received anything at all, there is a risk that you may still be asked to post securities for that project now because you’re not covered by the freeze.

00:17:46 – Catherine Cleary

Yeah, well, you’ll be asked to post securities once, and then they’ll be frozen.

00:17:50 – Philip Bale

Exactly.

00:17:50 – Nikki Pillinger

And they shouldn’t be high either, because you know in theory, if you haven’t actually agreed on what you’re doing, then you shouldn’t have spent any money. I say in theory – I’ve seen security statements that have started off at several tens of millions of pounds.

00:18:08 – Pete Aston

It depends on what.

00:18:09 – Catherine Cleary

What else is going on in that part of the network?

00:18:11 – Pete Aston

It depends on what works are underway, doesn’t it for that? Because, like you say, there are situations where, if works are already happening and you’ve been told to secure those works, the level of security could be incredibly high.

00:18:23 – Catherine Cleary

Yeah, yeah. Well, I think that’s one of the fundamental problems, isn’t it? It has become a bit of a postcode or substation lottery, you know if you’re happening to connect somewhere where they’re already doing works.

00:18:31 – Pete Aston

And on the security thing, I did hear the other day, and I don’t know if any of you have heard this as well, that there’s going to be, I think, another CUSC Mod to potentially remove securities associated with schemes that have already been approved by National Grid.

00:18:54 – Catherine Cleary

Yes.

00:18:55 – Pete Aston

I think this sort of was tried to have happened last year and sort of failed.

00:19:01 – Catherine Cleary

Well, there were two modifications raised last year which were both looking to do similar things, and so Ofgem effectively said, well, these two CUSC Mods kind of need to be evaluated and will approve one of them, but whilst they had similar kind of intentions, they didn’t, they didn’t have the same scope. So actually, Ofgem approved the CUSC Mod which just said could we take things which are effectively, like you say, things which have already been, a strategic investment decision has already been made and therefore the view is that there’s no real risk of abortive works, i.e. we know we need this, you know really big HVDC bootstrap link and therefore, you know, even if one individual project cancels, there’s not really any requirement for that money to be recovered because it’s not going to be sort of, you know, a stranded asset, and so they focus, one of the CUSC Mods focus very heavily on transmission links which have been identified as really required in the holistic network design and the network design follow-up exercise. That was the actually the Mod that was approved, the other Mod was much more global and said anything which has been through a strategic investment decision, sorry you know, so it’s a large-scale infrastructure project and it’s been approved, had a needs case approved, should be sort of excluded. So, there were two Mods last year. One of them was approved, but actually it was the much smaller Mod only encompassed a real, really small handful of schemes, which are basically the HVDC bootstraps and at like one island link, and so I think that perhaps, like that lesson, has now been acknowledged that there was a bit of a failing there or a bit of a missed opportunity, and so there have been a further CUSC Mod raised to address that. And again, I think we need Mr Murchie because I’m pretty sure that he sits on the workgroup for that one.

But there’s going to be a whole load of debate, I think, probably about which kind of schemes are accepted schemes. So, this is the idea that attributable works the definition of grid code has literally been changed from CUSC to say that attributable works for project are, you know, as defined, the works up to the MITS node, except accepted works, and that’s now a different definition. And at the moment accepted works are just those handful of HVDC schemes, for example, but they will potentially be modded to include any projects which have been through like, maybe like the ASTI strategic transmission investment framework or some of the other sort of transmission investment frameworks, but they’re different for the different TOs. So, I think there’s going to be a whole load of work required.

00:21:38 – Philip Bale

The really sensible thing here is where you have a scenario of project that was in the past connecting 2037 connection date, the circuit was just about to be restrung, and they were on the hook for very significant initial securities because that work was either started or underway. That’s one of the elements that helps reduce some of the substation lottery, postcode lottery which then stops you securing works which were obviously going to happen regardless of whether you were there or not – so it makes sense.

00:22:05 – Pete Aston

So, yeah, I think that’s positive. So, I think there’s a couple of really positive things on that.

Onto something less positive, is the potential CUSC Mod to bring in a financial instrument.

00:22:19 – Catherine Cleary

Financial instruments.

00:22:21 – Pete Aston

I thought you said final instruments again, a financial instrument. So, this was the idea where there was going to be a sort of £20,000 per megawatt top-up fee for all cancellation liabilities, wasn’t it? That came out last year and sort of hasn’t been talked about yet because there was a lot of kickback against it.

00:23:41 – Catherine Cleary

Yeah, it sort of floated as an idea, wasn’t it? You know, I think we had a call for evidence. I don’t think we’ve seen the evidence out of interestingly.

00:22:49 – Nikki Pillinger

I think everyone said no.

00:22:52 – Catherine Cleary

But essentially, so I guess NESO asked for evidence which they would have got from industry as to whether or not they thought that was an appropriate mechanism. Yeah, I think the feedback was pretty negative, wasn’t it? I think someone did make a very good point that the public feedback had been negative, though privately some organisations had contacted me to say they were actually very supportive. I imagine some quite deep-pocketed organisations had contacted me to say they thought this was a great idea, so maybe it wasn’t unanimously bad feedback.

00:23:21 – Philip Bale

So I think on that, just to sort of the pros and the cons, obviously the idea of a financial instrument is if you put it in place, the idea being that the serious parties who want to go through and progress a project will be willing to put their money where their project is and back it in terms of going through. The obviously very negative side of things is there is a lot of potentially good projects which don’t have that cash at the moment, which will get there, and especially the smaller players who will develop a project up to nominal shovel ready and then sell it to a larger project or larger organisation who will then go through and construct it. And obviously one of the very negative things is ultimately you’re forcing people to tie up cash and then they could turn around and say, actually I’d much rather take my money and go play with it in a different market where I can make more from this.

So I think there is there is a rationale for why they looked at doing it, obviously, the key thing being it’s quite a blunt tool and potentially could stifle some of the good projects which are now reached financial close are going to go into construction. Potentially those projects may not have done had this have been here. So, I think that’s the bit that needs to be balanced very carefully.

00:24:34 – Catherine Cleary

And some things people might want to know, the Mod hasn’t formally been raised yet, but we, it will have been by the time this comes out. So it’s CMP 448, and the proposal that we’re expecting to see is not necessarily a copy of what was floated in front of industry last year regarding that £20,000 per megawatt, and I think the way NESO described it in a webinar a couple of weeks ago was that they would like to make the CUSC change to introduce some kind of mechanism in CUSC that they could sort of enable in future. So, I guess, you know, lay the groundwork for there being a way to have a financial commitment or a financial instrument. But I guess, but no kind of word on things like the volume and stuff. So that’s probably quite an important Mod to watch because I imagine there’ll be quite a number of people that want to be on the work group, but also definitely consultations and so on.

00:25:21 – Pete Aston

So yeah, keep your eyes out for that one. Last thing on the list then, Nikki, you raised the point that you’d really like to talk about – issues with DNO customers not having had Mod App results and sort of variations from the DNOs.

00:25:40 – Nikki Pillinger

Yes, so this is not necessarily the DNO’s fault, it’s not necessarily NESO’s fault, but there are a hugely significant amount of customers who have not actually had formal Mod App responses yet, because what’s essentially happened is that the Mod App has gone to NESO and then they’ve looked at it, gone back to the DNO, and then the DNO has disagreed about the solution and then they’ve then gone back to NESO and then they’ve looked at it, there’s been this back and forth and you know this could have been going on for projects that applied three years ago, you know this is not…

00:26:15 – Philip Bale

Or longer. I’ve got one that’s five years old, that has planning, that still doesn’t have a project progression outcome.

00:26:21 – Nikki Pillinger

Yeah, and obviously we know that you need a counter-signed project progression outcome from NESO to actually go through Gate Two to the whole queue. Now we’ve spoken to a few of the DNOs about this and we’ve got a commitment that they will make sure that no one’s disadvantaged by this and that everyone can go through Gate Two the whole queue.

00:26:45 – Catherine Cleary

Does that mean they’re basically committing to definitely signing the Mod offers before?

00:26:49 – Nikki Pillinger

So, it’s not hugely clear. So UKPN are doing something called rider offers and these rider offers are going to be covering the kind of the lesser issues, like the less contentious issues. So they will sign things and say, you know, we’ll sort this out later. Essentially, they can’t do that for everything, and there’s no, like I said, UKPN are really one of the only ones that actually communicated about this, but there are other DNOs who haven’t actually sent out those.

00:27:20 – Catherine Cleary

I think NGED have said that they are aiming to sign everything which they’ve got kind of on their plate now – they are aiming to sign before May.

00:27:28 – Nikki Pillinger

I think all of the DNOs are aiming to sign the things that they’ve got before May.

00:27:35 – Pete Aston

Are these mostly related to the Step 2 offers that came out sort of middle of last year or is this a variety?

00:27:39 – Nikki Pillinger

A lot of them are, but not all of them, so there are still quite a few legacy ones that haven’t been signed.

00:27:45 – Philip Bale

And some more recent as well, and I think the key thing here is obviously where I think, we would, think it would be a good idea to sign them is, ultimately, we are going to do Gate Two to the whole queue, everything is going to go through being reassessed. You could find some of these project progression model outcomes that are particularly contentious, could actually look materially different for some of those projects that are in them, which arguably means the issues that they’re concerned about at the moment may end up being a mute point for a lot of the schemes if you end up going through and assessing the pots and a number of those projects that don’t have the protections that end up being stripped out. So, I very much understand; it’s very difficult for a DNO to sign something that they think is fundamentally flawed or wrong. It’s obviously just an assessment as to how much will it actually matter in the reality for the majority of projects.

00:28:32 – Catherine Cleary

And this is huge numbers of distribution projects, because it’s actually really quite large numbers of Mod Apps and each Mod App has multiple projects on it, probably.

00:28:42 – Nikki Pillinger

Yeah, so somewhat of an issue. But you know what, we’ve had that commitment from DNOs that its going to be signed, but then people who have applied quite a long time ago, are going to have a very late counter signature date are going through.

00:28:57 –  Pete Aston

Yeah, if you’re a DNO listening get those Mod Apps, Mod Offers signed, as quickly as possible so that all of your, all of your customers can go into Gate 2 to the whole queue and give them the best chance they can. That was all the items on the list. Is there anything else that’s cropped up while we’ve been talking?

 

00:29:16 – Philip Bale

Something that we’re starting to see more is there’s a lot of projects that are hybrid schemes, so they’ve got more than one technology with them, and a lot of the hybrid schemes are solar and storage, and there’s been scenarios where you’ve got a reasonably sized solar scheme, a small storage scheme, and it’s the storage element of the hybrid scheme that has triggered significant work, new SGTs which then means it’s sat there, and for multiple projects they’ve not known how to go around resolving the issues. Do you submit a Mod App to reduce the storage? Does that mean you stay in your original position? For the solar, do you have to go to the back of the queue?

There, in a number of cases that we’ve been working on, we’ve actually got quite positive outcomes, one of which is NGET was going to write and make it very clear that the solar element of it didn’t need new SGT or SGTs; the storage element did so therefore, if the storage element was to drop away, the project could continue without that massive financial cost hanging over it. Also, other projects, other DNOs now starting to say that potentially you can drop the storage element and it not be material change and then not go to the back of the queue with the other scheme. So, it feels like finally there’s a little bit more common sense coming out in a number of cases.

Obviously, the key thing that would be nice to see is the whole CP 2030 that ultimately that then follows through for far more projects where if they’ve got a good project especially the solar which sits within the headroom’s and the pot sizes, and the storage doesn’t that it can then be dropped and then gets reassessed as a standalone technology rather than as a hybrid. Obviously, it’s going to be very difficult for some of those projects where they have consented solar and storage and potentially, if they go through Gate 2, they might still find themselves being subject to that new SGT if there’s not enough headroom in that site based on other projects ahead of them. So, some difficult times for some of our customers in terms of trying to work out exactly what they do, what evidence they submit and what impact it can have on their project.

00:31:18 – Pete Aston

And you saying that just reminded me that Clean Power 30 doesn’t necessarily remove the need to pay towards SGT reinforcements.

No, so you still might go through Clean Power 30 and still be subject to paying towards an SGT?

Yep.

Because that issue is still being discussed separately.

00:32:10 – Catherine Cleary

Yeah, yeah, and it might become more of an issue, right? Because we might expect to see lots of projects. You know, half the projects that were paying for an SGT fall away, we still need the new SGT for the other half – they’re all paying twice.

00:31:51 – Nikki Pillinger

But it seems to be kind of something that hasn’t really been picked up with the whole we’ve got a massive queue is the fact that we only have a massive queue because there’s loads of people still in the queue that are waiting to see if people below them will drop out the people in the queue. You know you may have a 2032 connection date, but what you also have a lot of the time is a significant amount of reinforcement to pay for and you’re still potentially going to have that. But if people actually had a final offer of you have a 2030 connection date and you also, by the way, have to pay for this proportion of this new grid supply point or this new SGC, you still haven’t actually got a viable offer. That is going to actually mean that a lot of projects still can’t continue, and I guess that we’ve been going through this whole Connections Reform process.

But if people had actually had a final answer a little bit earlier, then we might not have had to do any of that really.

00:32:47 – Philip Bale

And I think there’s still a massive unknown we have with projects where we are now aware there’s evidence that projects ahead of them have fallen away already, but still not the ability of the DNO to categorically move projects from part four to part two, which then alleviates need, which then means, as it stands at the moment, those projects have to go through the Gate Two. They have to go through and submit their evidence, reassess the outcome of it, which ultimately means there are a lot of projects which are potentially sat there on tinter hooks wanting to know what the outcome is, that then can’t develop their projects, whereas if they had that, where they’re protected projects and they know they’re not on the hook for new SGTs, that ultimately they have a bankable project, they still have debates as to exactly when they can connect when they go through that process, but ultimately it will look like far better news for them.

00:33:37 – Pete Aston

And if you don’t know what part 2 and part 4 are referring to write to Philip separately.  I think that’s all we’ve got time for. Thanks guys. There is so much going on, as ever, but it just feels like at the moment there’s just a lot going on with Clean Power 30 particularly. Thank you everyone for listening and being part of this. It’s great to have you on board, we hope you join us for another episode. Thanks very much, bye-bye.