Commodity watch by senior policy officer, Chris Osborne
A new piece of legislation known as the ‘Utility Regulator (Support for Decarbonisation Preparation) Bill’, is proposed to enable the Utility Regulator (UR) to support the Department for the Economy (DfE) in fulfilling its obligations under the Climate Change Act.
Grid connection capacity (or lack of)
Issues surrounding grid capacity in Northern Ireland (NI) have been a recurring barrier to energy transition for over a decade. Whilst there have been calls for evidence on flexible connections and connection charging policy, the fact remains that connecting to the grid in NI for renewable energy sources is a daunting and inhibitive process.
On 7 November 2023, for one day only, NIE Networks opened G99 NI generation grid applications, with very limited capacity available, and applicants were directed to submit their applications in person at the Crowne Plaza Hotel in Belfast. Nine months later, some applicants are being informed that in some locations, connection offers cannot be made until technical specifications have been agreed and signed off by NIE Networks/SONI.
The UFU do not believe that this method of grid connection management is either appropriate or sustainable. This approach to grid connection will not bring about the additional 2-2.5GW of new renewable energy to meet the 80% renewable electricity target. If prompt action is not taken on the challenges mentioned above, this will not be accomplished.
Demand for energy
Energy accounts for almost 60% of our greenhouse gas emissions in NI and the Climate Change Act (NI) 2022 came into force in June of that year. Yet, the demand for electricity is going to grow significantly with the push for more electric cars and ground source heat pumps. Putting more pressure on an already creaking electricity grid.
Role of the Utility Regulator (UR)
The UR has a key role in supporting DfE in delivering the Energy Strategy ‘The Path to Net Zero Energy’, and Climate Change Act targets. It will play a crucial role in advising DfE in the development of net-zero policies essential to fulfilling the first Climate Budgets (2023-2027).
The UR was established by Article Three of the Energy (NI) Order 2003. The powers of the UR are, in the main, set out in five pieces of NI primary legislation, including The Electricity (NI) Order 1992 (the Electricity Order). However, there is currently no statutory requirement that explicitly refers to the need to facilitate the low carbon transition.
The Utility Regulator and ‘anticipatory investment’
The mandate of the NI Utility Regulator needs to evolve if NI is to have any chance of meeting 2030 targets and beyond and this is recognised in this consultation, but with one emission, the need for recognition that the regulatory process needs to move from a reactionary one to one that mandates for anticipatory, strategic investment. Specifically, ‘anticipatory investment’ must be considered in terms of grid reinforcement and making grid capacity available.
What are anticipatory investments?
Anticipatory investments reinforce the grid based on anticipated potential future needs, which go beyond confirmed generation and demand needs. This will help ensure that the power grids are fit for the rapid uptake of RES, avoiding connection delays caused by a slower grid capacity expansion.
Investing into anticipatory investments does carry a risk that they may turn out be underused, at least until there are developments on the generation side. Would this not be a risk worth taking if it meant we had a chance of meeting decarbonisation targets.
In our response to the DfE consultation, we will be asking for verification on the UR position on anticipatory investment.
The same consideration needs to be applied to the gas network and that conversation is taking place in parallel.
UFU response to consultation
The proposed draft bill is designed to enable the UR to support DfE through the provision of advice, information and assistance in fulfilling its obligations under Climate Change Act, and in its role as regulatory advisor in supporting the development of low carbon energy policy.
The UFU believes that this needs to be expanded to include legislation which would permit system optimisation rather than asset utilisation, taking account of the more decentralised and distributed architecture of the system, thereby allowing our members wishing to connect RES to the electricity grid and we as landowners can continue to play our role in the energy transition process.
