Grid Reform Proposals Endorsement by Ofgem | Ofgem Backs Latest Grid Connection Proposal Modifications
The National Grid, the UK's electricity system operator, has announced a strategic partnership with Electron, a leading flexibility platform provider. This collaboration marks a significant step in the National Grid's commitment to developing an open ecosystem demonstrating interoperability between market platforms.
The partnership aims to simplify and increase the value for Flexibility Service Providers (FSPs) participating in flexibility markets. By integrating Electron's flexibility platform, ElectronConnect, into the National Grid's Market Gateway platform, a self-service web portal will be created for FSPs. This integration will enable FSPs to access real-time network data and an end-to-end service from onboarding, bidding, dispatch, and payment.
The collaboration comes at a crucial time as renewable energy growth is being hindered by regulation and policy, particularly in co-location projects. RenewableUK, a renewable energy trade association, has highlighted that only 12% of onshore wind and solar farms in the UK are co-located with battery storage or hydrogen electrolysers. New sites or capacity of existing sites are required to increase the amount of renewable energy from battery storage and green hydrogen.
To address this issue, Ofgem, the UK's energy market regulator, has proposed grid connection reforms. These reforms, known as "first ready, first connected," consist of two gates to entry into the connections queue. The second gate requires land rights and a date of submission for the planning application. The reforms aim to prioritise viable renewable projects, deliver faster and cheaper renewables, improve customer service and transparency, and offer stronger incentives for delivery.
The target for implementation of these reforms is 1 January 2025, with the aim of halving the connections queue and offering connection dates in the late 2020s instead of the late 2030s. Ofgem believes that these reforms have the potential to deliver the desired outcomes of its Connections Action Plan, including reducing the number of speculative applications, removing stalled projects, and better allocating network capacity.
However, these reforms will require addressing technical, operational, and regulatory complexities to successfully deliver the necessary scale and speed of clean energy deployment. Challenges include managing the large backlog and oversubscription, technical and capacity constraints, consistency across network operators, and balancing investment and regulatory oversight.
The IEA's latest Global Outlook has revealed that nearly one in five cars sold worldwide in 2024 is expected to be an electric vehicle (EV). The uptake in EV usage is dependent on the public having access to suitable chargers to ensure a just transition. The IEA has estimated that the global number of public charge points will exceed 15 million by 2030, a four-fold increase compared to the almost four million operating in 2023.
In summary, the National Grid and Electron's partnership, alongside Ofgem's grid connection reforms, are designed to accelerate and streamline grid connections for renewable energy projects, which is crucial for the UK’s net zero ambitions by 2050. These initiatives will contribute significantly to the UK's renewable energy capacity and the growth of co-location projects, ultimately benefiting consumers by promoting low prices, particularly in periods of peak demand.
The strategic partnership between the National Grid and Electron, focusing on integrating Electron's flexibility platform into the Market Gateway platform, aims to enhance the value for Flexibility Service Providers by providing a self-service web portal with real-time network data and end-to-end services. In the finance sector, Ofgem's grid connection reforms, such as the "first ready, first connected" approach, are proposed to prioritize viable renewable projects, thereby facilitating the growth of the energy industry, particularly in co-location projects with renewable energy sources like battery storage and green hydrogen.
