Government Response: Grid Capacity in Wales
The Welsh Affairs Committee today publishes the UK Government’s response to its Grid Capacity in Wales report.
The Committee’s report warned of future challenges for the grid in Wales, highlighting the pressure it is experiencing now in the UK Government’s move to net zero and increase of renewable energy infrastructure. The Committee welcomes the UK Government’s acknowledgement of the ‘step-change’ needed to address these issues, while noting it has not committed to produce an agreed assessment of current electricity grid capacity.
The UK Government agrees with the report’s key recommendation to address the so-called ‘chicken and egg’ issue, under which developers wait for others to commit to the upfront grid connection and reinforcement costs. In a welcome move, Ofgem will now act to reduce these costs from April 2023, and the UK Government has committed to work with them to further accelerate connections.
The UK Government has tasked the Electricity Networks Commissioner with determining the grid infrastructure necessary for industry, communities and businesses in Wales to decarbonise on the path to net zero. However, to demonstrate the urgency required, the Committee is disappointed that the UK Government has not responded to the specific recommendation of setting deadlines to drive strategic planning to secure a grid fit for the future and expected demand.
The UK Government also accepts the report’s recommendation warning of the risks of rural communities bearing a higher burden of grid reinforcement costs, with further measures outlined to protect billpayers from expensive connections. Ofgem will revise how customers are charged for new connections, and reinforcement costs will be met by a larger area rather than just those in a rural community.
Welsh Affairs Committee Chair, Rt Hon Stephen Crabb MP, said:
“The UK Government’s acknowledgement of the constraints of the current electricity grid, and its pledge to work to further accelerate grid capacity, is welcome. If this is not addressed, and as highlighted in our report, failure to get the grid up to standard for net zero poses a threat to economic growth for communities across Wales.
“It is promising news that the UK Government has a plan in place to address the ‘chicken and egg’ dilemma where developers wait for others to foot the costs of connection before they commit to building energy infrastructure.
“Our Committee also welcomes the recognition that the current system in which rural communities are seeing increased bills as a result of having to share grid reinforcement costs is not equitable, and we are encouraged to hear that the UK Government will be introducing measures to ensure rural communities are no longer unduly burdened.
“While this is a largely positive response to our Committee’s work, we are disappointed that an assessment of current grid capacity in Wales does not seem to be forthcoming. It will be difficult to realise the exciting opportunities for renewable projects in Wales if they are unable to be plugged into a fully-functioning grid.”
