‘Phantom’ power projects clog up UK transmission queue

The British energy company Centrica has found in a commissioned report that queues for new energy projects seeking to connect to the transmission grid are being blocked by ‘phantom’ project developers – those who may not have land rights and haven’t applied for planning consents.

According to the report by Charles River Associates, the estimated size of these power projects in the queue is 62GW, roughly one fifth of all power in the queue.

Centrica’s CEO Chris O’Shea, states that such ‘phantom’ projects should have construction agreements terminated if developers miss key milestones, and urges energy regulator Ofgem to give National Grid ESO the power to remove projects from the existing grid queue.

The report on proposed CUSC modification CMP376 examined the UK’s existing queue for transmission entry capacity (TEC) and discovered that it is up to four times oversubscribed.

Not only that, but this oversubscription has become significantly worse in the last few years.

Specifically, it found that there are currently a total of 371GW of projects in the queue, enough to significantly improve the UK’s energy security.

114GW worth of projects have listed their connection date as before 2029, but around 62GW of these projects are only in the scoping phase and developers may not have secured land rights or applied for planning consent.

Have you read:
Urgent need to speed up grid reform and development – IEA
Renewables connection times higher than desired in Europe – E.DSO

A damaging effect

The report suggests that the oversubscribed queue, and longer wait for connections, have a damaging effect on the investments that could drive the UK’s energy transition and energy security.

Ofgem is exploring rule changes (CMP376) to address queue issues and is expected to decide these before 10 November this year.

These rule changes would grant the ESO the ability to remove projects from the queue if they miss key milestones.

Ofgem is currently considering whether to apply this rule change to just new projects entering the queue, or whether the rule change should also be applied to projects already in the queue.

When examining Ofgem’s solutions, the report estimated that applying the rule change to projects already in the queue could add an additional 12GW of green power to the system in the short-term, as space is created for those projects that are ready to progress.

Said Chris O’Shea, Centrica Group chief executive in a release: “In recent years energy security has rightly moved up the agenda as countries look to secure supplies and drive the transition to net zero.

“That’s why it defies belief that the queue for new, green energy connections is blocked by ‘phantom’ power projects (…) The system was created for a different time, when a small number of large projects were connected each year. Our current approach is not fit for purpose and needs urgent reform.”

CMP376 would require developers to meet a series of phased milestones – securing land rights, initiating, and securing planning consents, and agreeing a construction plan.

If a project missed those milestones, it would either be removed from the queue, or for later milestones, the ESO would have the right to remove the project, but could exercise discretion, for example if in cases where a milestone was missed for reasons beyond the projects control.

The CMP376 code change was proposed by the ESO in July 2021 and further developed in consultation with industry, before a Final Modification Report was presented to Ofgem.

The Final Modification Report gives Ofgem several options to choose from when approving the CMP376 code change. Notably, states Centrica, this includes an option called WACM7, which would ensure queue management milestones are applied to the existing queue.