Decision details

Enabling Net Zero Infrastructure – National Grid

Decision Maker: Environment, Economic Growth and Transport Scrutiny Committee

Decision status: For Determination

Is Key decision?: No

Purpose:

Representatives from National Grid will attend the meeting to present on progress with enabling net zero infrastructure in Lancashire within the national context.

Decisions:

The Chair welcomed Kiran Jassal, Stakeholder Lead, and Tariq Ajumal, Regional Connections Manager, from National Grid, to the meeting.

 

A presentation was provided on the National Grid's regional update on their work in the North West, in particular for Lancashire, and ongoing connections reform to enable net zero infrastructure. The report detailed ambitions regarding the National Grid's capacity, and how the transition from fossil fuel led energy to clean low carbon generation would be enabled. 

 

In response to questions from the committee, officers responded as follows:

 

·  It was noted that project requests for the National Grid currently amounted to over 300GW or power; this far exceeded the additional capacity needed to reach Net Zero in Great Britain, which currently stood at 70GW. Officers highlighted that there were ongoing reforms to manage the pipeline of contracts and reduce the number of customers waiting to those who were ready to go with developers and funding in place, helping to mitigate delays in the system.

·  The current projection for 70GW additional capacity needed to reach Net Zero was based on future energy scenarios for generation and demand that the system operator (ESO) had released. It was noted that currently, the peak demand on the network was 58.5GW, which highlighted the extent of oversubscription for the grid's contracts as that volume of connections would never be needed.

·  Officers highlighted that generation customers were those connected directly to the National Grid's network, and embedded generators were customers deemed too small to connect to the grid so instead connected to regional providers such as Electricity North West (ENW). Connections to local networks still impacted the transmission network as the power flow went back to the grid through Super Grid Transformers. As such, the National Grid was experiencing an increase in power flow coming to the grid and was having to build more transformers, such as those at Middleton to facilitate those connections.

·  It was clarified that the Electricity System Operator (ESO) was currently owned by the National Grid and would soon become a public corporation. Its role was to receive customer applications for grid connections and notify the transmission owners. Currently there were three transmission owners across the country.

·  On the challenges with achieving Net Zero and the recommendations made by the Electricity Networks Commissioner, Nick Winser, it was highlighted that these were multi-faceted and included issues like constraints with supply chains to build the infrastructure developments and facilitate new connections. Officers confirmed that they would respond to the committee with further information at a later date.

·  On green energy, officers highlighted that the National Grid was agnostic and currently bound by license obligations that required them to offer network contracts to all applicants wishing to connect to the network. It was explained this was the reason for why over 500GW of generation customers were coming through the system. It was noted that additional queue management reforms had been brought in to help organise the volume of applications, where applicants had to progress through certain milestones or face either going to the back of the queue, or having their contracts terminated.

·  One of the key milestones within a customer's contract was the financial investment decision to ensure that before National Grid began to invest significant funding, the customer was also at that same stage and able to invest.

·  On the financial constraints for enabling new connections, it was noted that the National Grid's finance model was managed alongside their regulator, Ofgem, who provided allowances for investing funds into equipment and projects. The National Grid operated in price controls with the regulator Ofgem, where business plans detailing investment needs were drawn up and passed to Ofgem to consider and scrutinize. The current price control period (T2) would finish in March 2026 and preparations were already underway to plan for the next price control for the next five years from April 2026 (T3). Engagement events had been arranged which councillors were encouraged to attend to learn more about future investment plans. It was noted that approved business plans were published on the National Grid website.

·  When new energy supplies were being created, it was explained that the National Grid's role was to facilitate the connection, but they had no control over the cabling route. Establishing the cabling route was the responsibility of the customer who must apply separately for planning permission with local planning authorities. When queried about public engagement, officers assured that any planned extensions beyond the existing operational fence line resulted in extensive consultations with local planning authorities. In addition, it was highlighted that a major projects team would be responsible for community engagement, and that further information would be circulated to the committee.

·  In response to a query on using buried cables instead of overhead lines and pylons, it was highlighted that using cables would increase the cost as they were significantly more expensive to install, and they also reduced the capacity potential from around 6-8GW (for overhead lines) to 2GW.

 

The committee thanked the representatives for the detailed report and presentation.

 

Resolved: That consideration be given to including an item on smart meters during the 2024/25 work programme process.

Corporate Priorities : N/A;

Divisions Affected: (All Divisions);

Contact: Gary Halsall Email: gary.halsall@lancashire.gov.uk Tel: (01772) 536989.

Report author: Gary Halsall

Date of decision: 25/04/2024

Decided at meeting: 25/04/2024 - Environment, Economic Growth and Transport Scrutiny Committee

Accompanying Documents: