Reforming Energy Management: Addressing the Surge in Transmission Queue Megawatts

The surge in demand for transmission connections has overwhelmed the existing network infrastructure, pushing it beyond its designed capacity. This unprecedented increase has led to the transmission connections queue reaching an all-time high in megawatts, highlighting significant strain on the system. The current infrastructure, built to accommodate more moderate growth, is now struggling to keep pace with the rapid advancements in renewable energy projects and the increasing electrification of various sectors. This strain results in delays, inefficiencies, and potential reliability issues, underscoring the urgent need for a comprehensive overhaul of our energy grid to meet contemporary and future demands.

As some industry insiders are aware, the Electricity System Operator (ESO) has been conducting extensive behind-the-scenes work to develop a workable solution. This solution aims to allow customers who are further advanced in the development phase of their schemes to connect earlier than the original energisation date provided by the Transmission Owner (TO). For this to work, the ESO is proposing changes to existing policies, along with the development of new policies, which will allow them greater control over the heavily saturated connections queue.

Our Connections Manager, Oliver Pettersen explains why TMO4+ has been implemented and what it means for developers like Balance Power.

Why Now?

Why is this happening now? What has changed over the last 12 months that prevents us from continuing as before? Currently, the connections queue across both transmission and distribution is expected to exceed nearly 800GW by the end of 2024. Since the ESO started the connections reform programme in October 2022, the connections queue has grown by more than 275GW, increasing steadily by nearly 20GW a month over the past 12 months. This is over four times the anticipated amount required to achieve the Net Zero 2050 target. Of the 800GW of accepted connections, it is expected that only around 15% will actually connect to the transmission network, meaning that 85% of schemes are deemed non-viable and are clogging the queue. This has resulted in substantial reinforcement works being required and energisation dates being pushed into the late 2030s.

What is TMO4+?

A solution to the above issue is the implementation of TMO4+. This is essentially an extension of the original TMO4 policy, now expanded to include existing projects in the connections queue, not just new connections as originally proposed. TMO4+ is based on a ‘First Ready, First Connect’ principle. This aims to prioritise those in the queue subject to extensive delays and give priority access to the existing network capacity.

This will be implemented via a two-stage gate approach:

Stage Gate 1: Access will be granted to all new schemes upon application. Customers will receive an indicative connection point, connection date for the capacity and technology requested, along with a high-level cost for the distribution works.

Stage Gate 2: To move into Stage Gate 2, customers will be required to provide evidence to the relevant DNO/ESO showing that they have progressed their scheme by securing land rights for the development platform and providing a submission date for their planning application to achieve planning consents. Once a customer enters Stage Gate 2, they will be provided with a revised connection date, a confirmed transmission queue position, and details of any supporting transmission reinforcement works, user commitment liabilities, securities, and queue management milestones where applicable.

If a customer fails to meet the queue management milestones, the ESO will have the right to demote this customer from Stage Gate 2 and allow a more developed customer to take their place. As part of this update, the ESO has requested that all accepted schemes provide an update on their progress against land rights and planning timeframes. This will help the ESO better understand the current queue situation in advance of the proposed 1 January 2025 implementation date.

What Does This Mean for Developers Like Balance Power?

This presents a significant opportunity for developers like Balance Power, who have in-house development expertise and proactiveness to drive projects forward to a Ready to Build (RTB) status as soon as possible. Where Balance Power previously anticipated connections in 6–10 years, there is now the opportunity to accelerate these schemes and energise them as soon as possible.

It’s important Balance Power utilise this opportunity effectively while managing an ever-growing pipeline. Having multiple schemes underway simultaneously can become a logistical challenge if not planned accordingly. The sooner the ESO provides developers with updates, the sooner company strategies and forecasting of DevEx and CapEx funds can be aligned to get these schemes online as soon as physically possible.

Will There Be a Rush to Submit Planning Applications?

To some extent, yes. However, upon entering Stage Gate 2, schemes will be bound by strict queue management milestones, and developers must demonstrate or be in a position to meet these. This should help remove speculative or unviable schemes and allow more mature developers to get their projects online, aiding in the resolution of the ongoing energy crisis and meeting the Net Zero 2050 target.

Impact on Existing Network Infrastructure

The increasing demand across the country is becoming too much for our existing infrastructure. This has led to substantial work requirements, costing billions of pounds, to ensure the network can handle the demand growth over the next 50 years. Removing non-viable schemes from the queue allows more generation to connect to the network, significantly enhancing capacity to cope with the surging increase in demand. By integrating additional power sources, especially from renewable energy projects, the grid can distribute energy more effectively and reliably. This expansion would not only alleviate the current strain on the existing infrastructure but also improve the system's resilience against fluctuations and peak load pressures. Increasing the diversity and quantity of generation points ensures a more balanced and robust energy supply, thereby reducing bottlenecks and enabling the grid to meet the growing needs of consumers and industries. Such strategic enhancements are essential for sustaining energy security and promoting a more sustainable and efficient energy future.