Is the National Grid the true obstacle to the green industrial revolution?

• 5 months ago (2023-11-08)
• Junior Isles

Transmission 181

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By Zoe Stollard, Partner, Browne Jacobson

In leafy South Yorkshire now sits one of the largest battery storage systems in the world, Thorpe Marsh. The site is capable of supplying 340 000 households with electricity for one day with renewable energy; one step forward in the UK’s marathon to achieve a net zero power grid by 2035.

At present, the calls for the Green Industrial Revolution have never been louder. As the world grapples with the urgent need to transition to a sustainable, low-carbon economy, the role of the National Grid in this transformation has come under scrutiny. But what are the true obstacles to this revolution, amidst a perpetual “blame game” between the industry, network operators and the government?

One of the National Grid’s largest concerns is capacity. In the dawn of EVs and electric heating systems, the demand for electricity is expected to rise by 50 per cent by 2035. The National Grid have estimated that £54 billion worth of investment will be required to add more transmission lines to the existing infrastructure to accommodate the increase in demand.

Yet, there is another dog in this fight: the public. Local communities have ferociously opposed the construction of new pylons and other net zero infrastructure. Calls for those affected to take solace in the fact they are playing a vital role in the fight against climate change seem to have fallen on deaf ears (unsurprisingly). Perhaps Electricity Commissioner, Nick Winser’s, suggestion of compensation payments and contributions to community funds might be better received.

The Grid’s manifesto, The Great Grid Upgrade, released earlier this year, takes account of these gripes and offers incentives for local communities to host infrastructure projects. The greatest sigh of relief however follows the dissolution of the Grid’s ‘first come, first serve’ system that sees renewable energy projects stuck in a bottleneck for an average of 10 years before they can connect.  What Ofgem chief, Jonathon Brearly, has referred to as a system of “polite queuing” results in hundreds theoretical and unworkable projects standing idly in line with no prospects of ever connecting. One way in which the Grid plans to resolve the issue is by removing the financial penalty incurred by developers for leaving the queue which they hope will hasten connection time by 2-10 years.

The UK government’s role in this transformation should not be overlooked either; reform of the planning system is crucial to achieving shorter timescales for consenting to major renewable energy projects. This will need to be bolstered by an increase in funding to planning bodies and statutory consultees and also, a clarification of roles and responsibilities among regulators. Ofgem’s ‘invest and connect’ policy is a step in the right direction; the regulators say they have removed all barriers to investing in grid expansion, a decision which allowed £20 billion to be invested into connecting 26 offshore windfarm projects in December last year. Ofgem’s ability to approve investments for renewable energy projects on a rolling basis will be key to attracting the private capital required to achieve net zero.

Earlier this year, National Grid Partner, Lisa Lambert, hailed the three Ds: digitalization, decentralisation and decarbonisation. They are goals we can certainly get behind but what if we could achieve them without the grid? In the US,  Tesla Powerwalls allow individual households to store their own renewable energy for self-consumption. Widescale application of these decentralised power banks would enable individuals to sell their excess energy back to the grid or other homes, transforming energy could from a utility to a commodity. This could drive down energy prices and at the very least, alleviate capacity concerns. In fact, the UK’s first local energy market, Centrica Cornwall, is already underway and capable of supplying 200 homes and businesses with power; an achievement that’s harboured global attention.

Hydrogen powered units (HPU) are another viable option for alleviating capacity concerns in tandem with battery storage units. In January this year, GeoPura’s HPU’s were able to provide 250 kW of power for up to 45 minutes. However, at present, green hydrogen, which is produced by the electrolysis of water and releases significantly less emissions incurs a much greater cost than grey hydrogen making the large-scale deployment of HPUs impractical. The Climate Champion’s Breakthrough Agenda optimistically predicted price parity between green and grey hydrogen by 2023 but it is now more likely that this will occur by 2030 at the earliest.

In the spirit of joint responsibility, regard should be had for the UK energy industry’s slow uptake of renewables. In 2020, 90 per cent of the UKs largest industry players increased their gas and coal fired capacity faster than their renewable-based counterparts. Complaints of vested interests hiding behind years of investment in power portfolios have justifiably surfaced. In 2023, the UK’s investment in renewables still lags significantly behind the rest of the world in an increasingly competitive race for clean energy.

In conclusion, chartering the road to net zero is a complex challenge requiring the synergy of many moving parts. The National Grid does not have to be an obstacle; it can be an enabler. However, we must not allow its monopoly over power transmission and distribution to cloud our vision of viable alternatives or to excuse unacceptably slow progress in the renewables field. For too long we have stood as passive players in energy and it’s time to take an active role.