Government sets out plans to speed up connections and increase grid capacity to boost energy security with more taxpayers' money
Major plans to speed up connections and rapidly increase capacity on the electricity grid have been set out alongside £960 million taxpayer investment in green industries – strengthening UK energy security and delivering long term savings for families and businesses.
The package of measures will support economic growth and further cement the UK as one of the best countries in the world to invest in renewables, bringing forward investment by building network infrastructure faster and speeding up grid connections.
Launched by the Chancellor and Energy Security Secretary, government has published its response to Electricity Networks Commissioner, Nick Winser CBE, accepting his recommendations in all areas. These measures will halve the time it takes to build high-voltage power lines from 14 years to 7.
Building on this, the Connections Action Plan will cut the average delay time projects face to connect to the grid from 5 years to just 6 months. It will also see the end of the existing ‘first-come, first-served’ system, which had led to a long queue of projects to connect to the grid – holding back low-carbon investment.
Communities hosting new power infrastructure could benefit directly with lower electricity bills and money for projects in their local areas. They will have the power to decide how this is spent, for example on apprenticeships, energy efficiency measures, local parks or community energy generation. Properties closest to new transmission infrastructure will potentially receive up to £1,000 a year off electricity bills over 10 years.
The government has also committed £960 million for the Green Industries Growth Accelerator, which will accelerate advanced manufacturing capacity in key net zero sectors, including offshore wind, networks, carbon capture, usage and storage, hydrogen and nuclear.
As demand for renewables grows, with international competition across supply chains, the government is making sure the UK has the right conditions for further investment and growth. As a result of the UK’s global leadership in clean technologies, including the flagship Contracts for Difference scheme and the £20 billion recently committed to develop carbon capture, usage and storage, the UK has attracted £200 billion since 2010. A further £100 billion is expected by 2030, supporting up to 480,000 skilled jobs across the country.
The new package announced at the Autumn Statement is expected to bring forward £90 billion of investment over the next 10 years and will ensure the country’s infrastructure is fit for the green industries of the future.
Energy Security Secretary Claire Coutinho said:
National Grid Chief Executive John Pettigrew, said:
The Autumn Statement includes the following:
Speeding up Grid Connections
As set out by the Prime Minister earlier this year, the government is taking action to ensure significant investment in new energy projects is supported by modern grid infrastructure – necessary to bring clean power to households and businesses while delivering emissions reduction targets.
The Connections Action Plan, published jointly with Ofgem, will overhaul the way projects access the electricity grid, releasing over 100GW of capacity from the grid connections queue. This is equivalent to around a quarter of the electricity needed to power our economy in 2050.
A ‘first-ready, first-connected’ approach will also be established, ensuring speculative and slow-moving projects are removed from the queue and supporting viable projects to connect when they are ready. Meanwhile, a triage service will be established to work closely and at pace with relevant investors, network companies and Ofgem to support accelerated connections for strategically-important demand customers, such as new industrial developments.
This follows Ofgem’s recent decision to give the Electricity System Operator (ESO) new powers to terminate connection agreements of stalled projects that are holding others up in the transmission queue.
The government has also accepted the programme of reform recommended by the Electricity Networks Commissioner to build new networks faster. This will support the delivery of up to 50GW of offshore wind power by 2030 and 24GW of new nuclear by 2050, as a major step towards decarbonising the UK economy.
This includes developing a Strategic Spatial Energy Plan, which will enable better decision-making on the location of energy system infrastructure to create a more efficient, lower cost system. The plan will give increased certainty for investors and industry, and give every community a say. It will be produced through close working between the government and the ESO (and Future System Operator once established), in consultation with Ofgem, and act as a reference for the creation of a transmission network blueprint in the Centralised Strategic Network Plan.
Community Benefits
As set out in the consultation response on Community Benefits for Transmission Infrastructure, benefits could be offered to communities hosting new transmission infrastructure.
These will be in the form of both electricity bill discounts – of up to £1,000 per year, or £80 a month – over 10 years for eligible properties; and money to spend on local community projects.
The government will publish guidance next year, enabling residents to decide how to fund projects in their area, such as education initiatives for young people, local parks or community energy generation, electric vehicle charging points or energy efficiency measures.
The government is also considering establishing a Community Benefits Register, to ensure developers comply with the guidance and provide inspiration to communities of projects for their local area.
Reforming the Planning System
Meanwhile, National Policy Statements – the bedrock of planning major new energy projects in England and Wales – have been strengthened to make clear that the planning system must treat low carbon energy infrastructure as a Critical National Priority.
This underlines for everyone involved in planning decisions just how critical the need for energy infrastructure is. This works alongside a package of wider reform measures also being announced as a part of this package, to ensure the country can build the infrastructure it needs for energy security and net zero. This will facilitate investment to support growth, jobs, and emerging green industries, whilst respecting legislation to protect the environment.
This is an important step towards delivering net zero as fairly, efficiently and quickly as possible.
Backing Green Industries
By reducing delays in network build and speeding up grid connections, this package could bring forward investment by around £90 billion over the next 10 years.
The government is committing £960 million over the next 5 years for the Green Industries Growth Accelerator. This will drive economic growth and bolster UK exports, while removing bottlenecks from the supply chain.
The Chancellor has also announced permanent Full Expensing: Invest for Less for those investing in IT equipment, plant, and machinery – an effective permanent tax cut of £11 billion a year. This will create the certainty that businesses, including renewable energy projects, need to confidently invest for less. A company can now permanently claim 100% capital allowances on qualifying main rate plant and machinery investments, meaning that for every pound invested its taxes are cut by up to 25p.
To further support new renewables investment, electricity generators who take a substantive decision to proceed with new projects after 22 November 2023 will have an exemption from the Electricity Generator Levy (EGL) on revenues from those projects.
Stakeholder Reaction
National Grid ESO Executive Director, Fintan Slye, said:
Director General of the British Chamber of Commerce Shevaun Haviland, said:
RenewableUK Chief Executive Dan McGrail, said:
Chief Executive of the Energy Networks Association Lawrence Slade, said:
SSE Chief Executive Alistair Phillips-Davies, said:
ScottishPower Chief Executive Keith Anderson, said:
Microsoft Vice President External Affairs Hugh Milward, said:
GrantScape Chief Executive Matt Young, said: