Report

Overcoming infrastructure barriers to renewable energy

10.6.24 2024

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Low carbon, low cost, and a secure supply of electricity is central to a sustainable and productive economy. However, building the generation and getting the power to where it is needed is not without its hurdles.

The transition from traditional fossil fuel-based energy to renewable resources presents challenges that will demand more strategic planning and innovative solutions that make the best use of the infrastructure and the environmental and community space that is available to us.

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One of the primary challenges facing the transition to renewable energy is the existing infrastructure. The current grid was designed to accommodate a small number of large fossil fuel generators. These power stations were broadly free to locate where they liked—subject to access to coal, gas, and planning—ideally close to demand. However, wind farms are constrained not just by the best wind resources but also, for offshore wind, to seabed areas selected by the Crown Estate or Crown Estate Scotland. Onshore wind is essentially banned under planning rules in England. Where generation will locate is therefore much more constrained by government choices and invariably far from demand.

The regulatory framework governing grid build-out and development has not kept pace with this changing landscape. There has been increasing misalignment between infrastructure design and future energy needs, and this is posing a significant barrier to progress. Over the 35 years since privatisation, we have built less than 200 km of new transmission lines. The regulatory models have incentivised sweating assets to minimise costs today at the expense of long-term investment in the network of the future.

This position cannot hold. Indeed, National Grid ESO, responsible for managing the design process for the future system, recently published “Beyond 2030,” setting out a £58 billion blueprint for a decarbonised energy network designed to bring power from as much as 85 GW of new offshore wind in the North Sea to where it is needed. This is the first step on the way to greater strategic planning. The next step will be the Strategic Spatial Energy Plan, or SSEP.

Over the 35 years since the privatisation we have built less that 200km of new transmission lines

The SSEP will set out where we can expect to see generation in the future and the sorts of things that we will need to consider. Offshore, this will need to include the complex interactions between various marine uses. How should we balance renewable energy projects with other marine activities such as oil and gas extraction, marine biodiversity preservation, and protected areas? By taking a holistic approach to spatial planning, policymakers can minimize conflicts and maximize the benefits of renewable deployment.

The SSEP will then inform what new electricity infrastructure will be needed to carry power around the country. This will also initiate open and frank discussions between the government and its agencies with local communities about what this infrastructure should look like and precisely where it should go. Some communities, like those in East Anglia, are being asked to host electricity infrastructure for the first time. Balancing the need for new infrastructure with community concerns, keeping costs down, and considering environmental impacts will require delicate management. Should we, for instance, put more cables underground, which will protect communities from the visual impact but impose high costs for bill payers and the environment?

Getting power around the country is all but useless if we cannot get renewable projects connected to the grid. Battery storage is an essential complement to renewable generation, and the sector is booming—in the past 12 months, the pipeline of projects has grown by 67% to 96 GW; there are fewer than 5 GW of storage on the system today.

But this boom has also meant that the queue for a grid connection has grown. Projects are being offered dates to connect to the network into the late 2030s. There is an urgent need for reform in the grid connection process.

Efforts are underway to streamline the grid connection process by transitioning from a first-come, first-serve approach to prioritize projects that are ready to connect or can demonstrate benefit to the system. This approach aims to expedite the connection process and ensure that renewable energy projects can come online swiftly.

The government aims for a decarbonized power system by 2035, and Labour is looking to 2030. These goals are essential to avoid the worst impacts of climate change and give consumers access to low-cost renewables. Strategic planning, regulatory reform, and streamlined grid connection processes are essential steps in addressing these challenges. By embracing innovation and collaboration, we can pave the way for a sustainable energy future powered by renewable sources.

Guest Contributors

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Rosalind Clifford

Partner, Head of Energy & Renewables

A holistic approach to energy and renewable related property issues sets Ros head and shoulders above her peers.

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Andy Fewings

Andy Fewings

Partner, Energy & Renewables

Driven to tackle the climate crisis, Andy is passionate about the transition to net zero across the fast-moving renewables sector.

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Amy Souter

Partner, Energy & Renewables

Amy is an environmental consultant and project manager with experience in feasibility, environmental assessment, planning, negotiation, land assembly, site acquisition, and due diligence for energy and infrastructure developments.

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