Grid capacity in Wales

Welsh Affairs Committee Closed Inquiry
Opened: 1 Feb 2022 Closed: 16 Oct 2023 Parliament page
The Committee has launched an inquiry which will explore the implications of grid capacity issues for the energy sector in Wales, particularly in relation to Wales meeting its net zero targets. Read inquiry launch and terms of reference
14 Recommendations
19 Conclusions
1 Report
4 Oral sessions
4 Events
Activity timeline 10 events
24 Jan
2023
Report published
21 Oct
2022
Report published
8 Jun
2022
Oral evidence
8 Jun
2022
Formal meeting (oral evidence session) · Room 16, Palace of Westminster
18 May
2022
Oral evidence
18 May
2022
Formal meeting (oral evidence session) · Room 5, Palace of Westminster
27 Apr
2022
Oral evidence
27 Apr
2022
Formal meeting (oral evidence session) · Room 5, Palace of Westminster
16 Mar
2022
Oral evidence
16 Mar
2022
Formal meeting (oral evidence session) · Room 5, Palace of Westminster
Oral evidence sessions 4 sessions
8 Jun 2022
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Oral evidence
Paul Van Heyningen · Department for Business, Energy & Industrial Strategy Rt Hon Greg Hands MP · Department for Business, Energy & Industrial Strategy
18 May 2022
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Oral evidence
Julie James MS · Welsh Government
27 Apr 2022
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Oral evidence
Ben Godfrey · Western Power Distribution Huub den Rooijen · The Crown Estate Julian Leslie · National Grid ESO Malcolm Bebbington · Scottish Power Peter Bingham · Ofgem Roisin Quinn · National Grid Electricity Transmission
16 Mar 2022
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Oral evidence
Chris Williams · Industry Wales Jon O'Sullivan · EDF Renewables Rhys Wyn Jones · RenewableUK Robert Procter · Community Energy Wales Tom Glover · RWE Generation
Title HC No. Published Items Response
First Report - Grid Capacity in Wales HC 218 21 Oct 2022 33 Responded
Recommendations & Conclusions
13 results
Clear
4 Conclusion Accepted
First Report - Grid Capacity in Wa…
While we understand that the UK Government must consider the energy and network needs of...
While we understand that the UK Government must consider the energy and network needs of the UK as a whole, we consider that it would be inequitable if the UK were to benefit from Wales’ natural resources for renewable energy … Read more
Government Response
The Government states that strategic planning will always take account of network needs in Wales, pointing to the Holistic Network Design (HND) as the first step towards a Centralised Strategic Network Plan (CSNP), and mentioning Welsh Government representatives input.
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8 Recommendation Accepted
First Report - Grid Capacity in Wa…
We note the work by the Welsh Government to develop a long-term plan for energy...
We note the work by the Welsh Government to develop a long-term plan for energy networks in Wales and call on the UK Government to explain how it is engaging with this. The UK Government needs to explain how it … Read more
Government Response
Strategic planning of the network takes account of network needs in Wales, and the Holistic Network Design (HND) recommends connections and infrastructure for projects in the Irish Sea and Celtic Sea. Welsh Government representatives feed into the HND through monthly meetings.
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9 Conclusion Accepted
First Report - Grid Capacity in Wa…
Upfront connection costs can be prohibitive and prevent the development of energy projects.
Upfront connection costs can be prohibitive and prevent the development of energy projects. This results in a “chicken and egg” situation whereby developers wait for other developers to commit to the funding of connection costs.
Government Response
The government points to Ofgem's decision to socialise a proportion of network reinforcement costs, BEIS's amendment to connections legislation, existing frameworks for developers to share connection costs and Ofgem incentive schemes as addressing the committee's concerns.
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10 Conclusion Accepted
First Report - Grid Capacity in Wa…
We are encouraged that Ofgem is reviewing connection arrangements and we look forward to hearing...
We are encouraged that Ofgem is reviewing connection arrangements and we look forward to hearing more about the progress being made in the run up to 1 April 2023. We consider that due to the tight timeframes set by government … Read more
Government Response
The government describes existing mechanisms to address upfront costs and incentivise developers to share grid connection and reinforcement costs, including Ofgem's decision to socialise a further proportion of network reinforcement costs and existing legislation allowing developers to share costs and receive reimbursement from second comers.
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12 Conclusion Accepted
First Report - Grid Capacity in Wa…
A mechanism should be developed to allow small energy generation projects to defer and spread...
A mechanism should be developed to allow small energy generation projects to defer and spread grid connection payments over time.
Government Response
The government indicates that the connections framework overseen by Ofgem and DNOs already allows for instalment payments in appropriate circumstances.
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13 Conclusion Accepted
First Report - Grid Capacity in Wa…
We are encouraged to see that the UK Government recognises that grid connection costs can...
We are encouraged to see that the UK Government recognises that grid connection costs can be prohibitively high for developers. However, we are concerned by the decision to move more of the reinforcement costs to the network charges paid by … Read more
Government Response
The government points to Ofgem's decision to socialise a proportion of network reinforcement costs and BEIS's amendment to connections legislation to enable these reforms as addressing the committee's concerns.
Wales Office
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14 Recommendation Accepted
First Report - Grid Capacity in Wa…
It is not equitable that grid reinforcement costs should be shared by consumers in an...
It is not equitable that grid reinforcement costs should be shared by consumers in an area because this would create a higher burden for rural households and businesses and those in areas which historically lack existing grid infrastructure. We ask … Read more
Government Response
The costs of connecting a project to the existing network are charged to the connecting customer, and from April 2023, reinforcement costs will be met by electricity billpayers in the relevant distribution area.
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21 Conclusion Accepted
First Report - Grid Capacity in Wa…
The policy in favour of laying cables underground in AONBs is welcome.
The policy in favour of laying cables underground in AONBs is welcome. However, due to the significantly higher construction costs it is likely that overhead lines will simply be re-routed around AONBs. This will mean that communities and businesses in … Read more
Government Response
Ofgem is revising how customers are charged for connecting to distribution networks to reduce connection costs, and project approval is a matter for Ofgem.
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22 Recommendation Accepted
First Report - Grid Capacity in Wa…
The Government should outline the circumstances in which higher grid construction costs, for example due...
The Government should outline the circumstances in which higher grid construction costs, for example due to undergrounding, are justified to enable rural communities to keep pace with the decarbonisation transition.
Government Response
Ofgem is revising how customers are charged for connecting to distribution networks to reduce connection costs, and project approval is a matter for Ofgem.
Wales Office
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26 Conclusion Accepted
First Report - Grid Capacity in Wa…
There is a lack of clear policy directing energy development companies on how to provide...
There is a lack of clear policy directing energy development companies on how to provide adequate benefits to communities hosting grid infrastructure.
Government Response
The government states that it has already committed in the BESS to review community benefit options for electricity network infrastructure, and is currently engaging with stakeholders to explore a more standardised approach to local community benefit packages.
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28 Conclusion Accepted
First Report - Grid Capacity in Wa…
Without an established system of anticipatory investment in grid infrastructure the significant opportunities for renewable...
Without an established system of anticipatory investment in grid infrastructure the significant opportunities for renewable energy generation in Wales will go under- utilised, which will have an impact on the achievement of net zero targets. Were grid infrastructure to be … Read more
Government Response
The government highlights Ofgem's work to create a price control framework that enables strategic investment ahead of need, along with efforts to accelerate strategic transmission network infrastructure and protect consumers. They state they are already working with National Grid ESO, Ofgem, and network companies on the HND, which identifies key strategic transmission projects.
Wales Office
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29 Recommendation Accepted
First Report - Grid Capacity in Wa…
The UK Government should use National Grid ESO’s Future Energy Scenarios to work with energy...
The UK Government should use National Grid ESO’s Future Energy Scenarios to work with energy companies and grid infrastructure owners to determine areas where anticipatory investment in grid infrastructure would be justified to achieve net zero targets. Where anticipatory investment … Read more
Government Response
The government highlights Ofgem's work to create a price control framework that enables strategic investment ahead of need, along with efforts to accelerate strategic transmission network infrastructure and protect consumers. They state they are already working with National Grid ESO, Ofgem, and network companies on the HND, which identifies key strategic transmission projects.
Wales Office
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31 Conclusion Accepted
First Report - Grid Capacity in Wa…
The grid network has been built piecemeal on the basis of the energy needs of...
The grid network has been built piecemeal on the basis of the energy needs of the nation over time. The energy system in the UK is changing and electricity grid network design needs to adapt to meet this change. We … Read more
Government Response
The Government is committed to unlocking the required investment to deliver a secure, resilient, net zero-ready network and is taking a leading role in a more strategically planned approach for electricity networks. This includes the publication of the HND and upfront consideration of community and environmental impacts to provide more certainty in the planning and consenting process.
Wales Office
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Government Response AI assessment · 30 of 14 classified
Accepted 13
Accepted in Part 1
Acknowledged 11
Deferred 1
Rejected 4
Total 14 recs + 19 conclusions