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 , 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.”
