A roadmap: the transition to a clean, fair and affordable future

We stand at a critical point in the UK’s energy transition. All three points of the energy trilemma – security of supply, affordability and decarbonisation – are now in sharp and unrelenting focus. As the backbone of the UK’s energy system, National Grid recognises the important role we play in facilitating and driving forward the transition to a clean, fair and affordable energy future. As the President of Electricity Transmission, I know our work – and the speed at which we can deliver it – will be pivotal to the sector making a fairer future a reality.

We are clear: a clean energy transition is the surest route to long-term security of supply, energy resilience and affordability. With the right policy and regulatory frameworks in place, the energy transition will drive economic growth, create a jobs and a skills revolution, and establish a more energy independent UK.

For the first time in my career, the three points of the energy trilemma are no longer at odds with each other. The tension between each point has evaporated, and, instead, been replaced by a need for innovation, pace and greater collaboration than ever before.

That is not to say the trilemma is now irrelevant. Rather, we need, together – by which I mean industry, the government, the regulator and communities across the UK – to consider how each point now relates to the next, and where the opportunities to drive forward the transition to a clean, fair and affordable energy future lie.

In thinking about each of the points in turn, we’re able to unlock the roadmap to a much-needed and more equitable energy future for all.

Firstly, Decarbonisation.

As a country, and as a sector, we should be proud of the progress in decarbonisation we’ve made to date. Britain’s national electricity grid is one of the greenest in the world.

Record levels of renewable power, including a growing volume of offshore wind, is already connected to our transmission system, powering our homes and businesses.

However, it’s clear that the sector must now work together to bring more renewable power to the grid – and fast.

Alongside construction, financing and operation, connecting renewable energy projects to the electricity system is crucial. The annual number of connection applications from wind, solar and other generation projects has quadrupled from where it was just four years ago, and is forecast to continue rising.

I know that long connection times can be a barrier to progress and I want to assure you today that we’re working hard to engage, listen to and work with everyone we need to in order to overhaul the connections process.

Let’s be clear though, unless you have anticipatory investment, there will always be a lead time to connect. Currently, industry rules and obligations mean we must manage connections requests on a first come, first serve basis. Developers can therefore be hesitant to waive their grid connection offer and place in the connections queue, even if their project is unlikely to progress to delivery, extending the timeline for those who do want to proceed. To address this, we are working with Ofgem, ESO, other network companies and wider industry stakeholders to deliver ambitious change within the existing framework. This will mean we can accelerate connection dates while we work on a fully reformed process, making progress in parallel, rather than waiting for reform to begin change. This will make sure projects which are progressing are able to connect first, while avoiding a longer connection queue forming over time. We also think there should be a higher barrier to entry for applicants, ensuring projects are aligned to energy policy, credible with a clear route to a Final Investment Decision if they’re going to hold places in the queue.

Of equal importance to connections are the broader upgrades to the transmission network needed to ensure that increased amounts of renewable energy can be taken from where it’s generated to where it’s needed.

Earlier this year the Electricity System Operator published Pathway to 2030, a suite of documents aimed at setting out the blueprint for the grid infrastructure required to deliver increasing volumes of offshore wind.

It shows the significant volume of new electricity networks required to transmit clean, green energy across Great Britain.

Work has already begun to deliver many of the projects required, but to put this into perspective, to meet the government’s target of 50GW of offshore wind by 2030, our industry must deliver more than six times the amount of transmission infrastructure in the next eight years, than has been built in the past 30 years.

Delivering this infrastructure will allow the UK to decarbonise its energy system in a meaningful way. It will boost local economies, provide jobs and opportunities to learn new skills, and deliver vital investment to towns right across the country.

We’ve carried out research that suggests 400,000 new roles are needed in our sector by 2050, with 120,000 of these required between now and 2030, and I know first-hand just how exciting those jobs can be. In order to move projects forward at pace, and to unlock this green jobs pipeline, there are a number of hurdles – none of which are insurmountable – that industry, the regulator and government should tackle together. Firstly, communities responsible for hosting this economy-boosting infrastructure on behalf of the country must see real and tangible benefits for doing so. We’re asking government to publish a framework by spring 2023 to establish what these benefits should be and how industry can work with communities to establish a blueprint for success.

Secondly, the planning system must work in harmony with the regulatory framework. We welcome the government’s recognition of the need to speed up planning decisions on major infrastructure projects, and its plans to bring forward legislation to this effect.

There are two priority actions now needed on planning policy:

• We need National Policy Statements, by the end of this year, to reflect the urgent need for new energy infrastructure, provide clear direction on issues relevant to decision making and crucially recognise the network ‘blueprints’ such as the Holistic Network Design as an authoritative ‘needs case’ for planning and regulatory decision-makers. -
• And then, we need planning and regulatory regimes to align for nationally significant infrastructure projects. We welcome the commitment to speed up the Development Consent Order process for these projects and would also like to see an intention to reduce examination and determination stages.

We don’t have time to waste. As well as connections and transmission network upgrades, we must make progress simultaneously on decarbonising transport, heavy industry and heat.

National Grid is committed to collaborating with organisations right across the industry and beyond to speed up the decarbonisation of the whole energy system.

In doing so, we will together address the next point of the trilemma – security of supply.

Security of supply

It's vitally important. Last week, National Grid Gas and National Grid ESO both published their winter outlooks, setting out a number of scenarios for the months ahead.

As you will know, none of the scenarios are predictions or forecasts, but, as a robust and responsible system operator, there is a responsibility to plan for the worst case, however unlikely that might be.

Clearly, we are in a more fortunate position than much of Europe. The amount of Russian gas the UK previously imported was a very small part of our overall energy mix. But we are not an energy island. Consequences of Russia’s illegal war in Ukraine and the knock-on impact on energy supplies felt by Europe could also affect the UK and, therefore, it’s right to look at how we can take a more proactive approach to further reinforcing security of supply in the decades ahead.

And, just as a clean energy transition will bring jobs and skills through a net zero workforce, so too will it increase the energy independence of the UK well into the future. With the right levels of investment, which can be driven forward quickly by offering businesses a clearer regulatory framework – areas such as the North Sea, for example, or the CCUS clusters, can become homegrown energy hubs. With certainty of investment will come speed of delivery, economic growth through job creation and supply chain certainty, and more British energy on the grid.

Put simply, renewable energy cannot be weaponised.

And let’s not forget the importance of continuing to invest in the network we have, to keep it reliable and resilient. It’s easy for all attention to focus on the future infrastructure that needs to be built, but of course the resilience and reliability of the installed network has never been more important than it is today.

Affordability

Which brings me on to the third and final point of the energy trilemma: affordability. Over recent weeks we have seen significant and welcome government intervention on the immediate issue of affordability of energy. There is no doubt this was needed and will provide a degree of much-needed relief to households and businesses. However, it’s clear that affordability issues cannot be solved long-term through a single intervention.

Delivering a clean energy transition is the surest way to lower bills, particularly if the link between electricity and gas prices can be weakened.

Energy efficiency also has a role to play in lowering bills and we were pleased to see government recognition of this in recent weeks. However, action must now match words. More households in the UK need far better insulation, quickly. It’s a relatively simple fix to a much broader problem – a fix which will continue to financially benefit consumers for many years to come.

We can say with a high degree of certainty now that delivering a clean energy future will also deliver an affordable energy future.

The energy sector is far greater than the sum of its parts. With deep collaboration, openness to innovation, new thinking, a hunger for diversity, and a shared commitment to creating a clean, fair and affordable energy future, we will succeed together.

National Grid is focussed on driving forward the transition at pace, delivering for our customers and facilitating progress.

In working together – and matching words with action - I am certain that beyond the crisis, we can deliver a fairer future for all.