Centrica has retained Charles River Associates (CRA) to provide an independent report examining the inclusion of queue management processes within the Connection and Use of System Code (CUSC) under CUSC modification CMP376. We have been asked to focus on both the proposed CMP376 solution (the Original Proposal) and the 11 Workgroup Alternative Code Modifications (WACMs) proposed during the workgroup consultation process.
The current system for connecting new projects to the transmission grid was designed for an electricity system based on a small number of large fossil fuel generators connecting each year.
With the rapid proliferation of renewable energy projects, the existing queue for Transmission Entry Capacity (TEC) has become oversubscribed by a factor of 3-4. This oversubscription has become significantly worse in the last few years.
Of the current 371GW of projects in the queue, 114GW (54%) has an expected connection date of before 2029. However, 62GW of this (54%) is still in the scoping phase and, as far as National Grid ESO (NGESO) knows, has not secured land rights, nor applied for planning consents.1
A longer queue and longer wait for connections increases uncertainty for developers. For example, there are no available sites to connect generation in the regions of South Wales, North Wales, the North West or the South West before 2036.2 This has a damaging effect on the investments required to meet the UK’s energy transition and net zero goals.
CMP376 proposes to rectify these issues by conferring on NGESO (as transmission system operator) the power to manage the queue in order to more efficiently allocate capacity. This would be achieved by setting milestones for existing projects within the queue which, if not met, would see their Construction Agreements terminated.
The Original Proposal would see this applied to new or modified projects. Due to the large number of delayed projects in the current queue, this would have a limited effect.
WACM7 proposes to apply the same processes to all existing projects in the queue. Imposing WACM7 would be beneficial for electricity consumers, net-zero targets, and the wider electricity system.
Through analysis of typical project development timelines we find that 12.3GW of solar PV, onshore wind, stand-alone storage and co-located storage projects with expected connection dates prior to 2029 would be unlikely to connect without delay.3
If WACM7 were applied, many of these projects would be at risk of termination through the missing of milestones. If an additional 12.3GW of solar PV were to connect over this period instead, it would account for 3.3% of system demand in 2029. This hypothetical solar PV generation would reduce carbon emissions from energy supply and from fossil fuels in totality by up to 4% and 1.1% respectively and reduce wholesale prices through reduction of system long-run marginal cost (LRMC).4
A reduction of wholesale prices, which make up a large proportion of retail bills, would reduce energy costs for consumers. In addition, whilst more solar PV would otherwise increase network costs, this would be offset by the high volume of storage capacity connecting during this period.