A key deadline occurs in the coming weeks for applications for new electricity projects including those powered by renewable energy sources including wind and solar.
Modernising Britain’s electricity network – to facilitate the transition to green energy and update aging equipment – has been hampered by delays in the granting of the connections that plug new power generation projects into the system.
Bottlenecks are caused by the scale and complexity of existing infrastructure, input from renewable schemes around the country, and regulatory and planning processes. The grid was originally designed to take power from large, centralised coal-burning power stations, not from on- and offshore wind and solar farms spread around Britain.
Grid access reform to accelerate renewable energy deployment
Under the previous “first come, first served” system, grid connections went to those at the front of the queue.
Some applicants had a habit of lodging bids ‘in case required’, with little chance of connection, then withdrawing at the last minute, causing disruption and delay. This led to NESO, the UK Government-owned National Energy System Operator, reforming the connection process to prioritise “shovel-ready” projects aligned with UK energy goals.
Deadline extended due to technical issues
The original deadline of 29 July has now been extended by at least five working days due to technical issues that have accompanied the launch of NESO’s queue reform process. A new confirmed deadline has not yet been announced. This extension applies to the evidence submission window – open since 8 July – during which developers and the mainly regionally based distribution network operators must submit evidence of their projects’ ‘maturity and strategic alignment’ to be considered in the reordered grid connection queue.
Gate system is key to UK renewable energy investment
Next month NESO will start assessing evidence and reordering the queue based on project readiness and strategic value. Projects deemed “shovel-ready” will receive confirmed connection offers, including energisation dates and reinforcement needs. Others may receive provisional deferred offers and may have to reapply in future windows. Those that don’t submit evidence on time may be deferred or removed from the queue.
The reformed grid connection application process includes key stages or ‘gates’, where projects are evaluated for readiness and strategic fit.
Gate 1 projects have yet to receive a confirmed connection date or queue position but may get an indicative date – they generally require more time to develop or fit into a broader network design. Gate 2 schemes are viable and ready for a confirmed connection point, date and queue position, making them suitable for connection.
NESO has extended the pause on accepting new Gate 2 grid connection applications by five working days due to issues with the connection portal, to 11.59pm on 5 August.
Securing land rights for large-scale solar farm developments
Acting for the landowner of a 600-acre proposed solar farm, we recently completed the required option agreement so that the application under Gate 2 had the necessary proof of intention from the developer to secure the connection.
Gate 2 criteria for renewable energy project approval
These are:
- Secured land rights for the proposed location – a signed option agreement is vital;
- A timetable for obtaining planning consent. No need to have already submitted the planning application, but the applicant must comply with the timetable or the grid offer will be withdrawn; and
- A ‘specific strategic criteria’ – a generic sweeper provision which enables efficient use of the grid queue.
On completion of the option agreement, the developer must prepare robust plans for planning permission. Normally by this time too, the developer has an indication from the Grid of the best point of connection and the location for the substation.
Navigating subsidy and finance changes for renewable energy landowners
Often at this point a developer will seek funding – more likely investment finance from an asset provider than a bank loan or commercial loan. Reaching Gate 2 requires significant negotiation, to ensure documents produced are of a type a funder would recognise.
Agricultural subsidies have been redesigned following the UK’s EU departure to make farmland viable through the support of food production, environmental protection, entrepreneurship and rural development.
We can help farmers navigate this while ensuring that there is ‘funder-friendly’ but robust compensation from the developer during the option period. Even preliminary planning investigations can trigger a potentially costly breach of subsidy scheme requirements.
Supporting developers, landowners, and funders in green energy infrastructure
Whether you’re a landowner, farmer, funder or developer, our expert team is here to support your renewable energy plans. Learn more about Acuity Law with Purpose – our dedicated legal service for renewable energy investment.
