Yahoo Finance Octopus to build own electricity pylons in challenge to National Grid
Household energy supplier Octopus is seeking to take on the National Grid by building its own electricity pylons, as frustration grows at the pace of the network’s expansion.
Greg Jackson, chief executive of Octopus, said the business has held talks with Ofgem, the industry regulator, about opening up the planning and building of the power grid to competition.
His company argues it can build sections of the high-voltage transmission network – the backbone of the electricity system – more quickly and efficiently than the National Grid, helping to speed up the rollout of clean energy.
The shakeup would end the National Grid’s 30-year monopoly on transmission infrastructure in England and Wales, amid complaints from wind and solar farm developers that the Grid’s slow expansion is leaving them to wait a decade to connect to the system.
Thousands of new pylons must be built across Britain as part of the switch to net zero. Giving up oil and gas will boost demand for electricity, requiring more infrastructure to carry the power to homes and businesses.
Octopus established a foothold in electricity infrastructure after its takeover of Eclipse Power Networks, a Buckingham-based business, in 2021.
At the moment, Eclipse only builds small-scale, local power distribution networks but Mr Jackson wants to expand the company’s activities to cover transmission infrastructure as well.
Octopus has been inspired by Indian energy company Sterlite Power, which has used cutting-edge computer software in India and Brazil to design power grid projects in a way that saves time and money.
It does this by mapping projects to avoid areas where it will be complicated to secure planning permission or where there will be large numbers of potential objectors, which prevents schemes from becoming bogged down by delays and opposition.
Speaking to The Telegraph, Mr Jackson argued that more competition in Britain would encourage the market to come up with innovative ways to satisfy local opposition and could even result in fewer pylons needing to be built overall.
He said: “There’s increasing support for this idea that there’s more than one way to skin a cat.
“If we could find ways to build power infrastructure that are faster and cheaper, who wouldn’t want it?
“In these areas where people are worried about pylons, there can be ways of building infrastructure where there might be less community resistance.”
Asked whether Octopus would seek to build electricity infrastructure itself, he confirmed: “We’ve been talking with Ofgem about the possibility.
“There are so many different routes you could use, so many different construction technologies, and different ways of solving it, for example, in an area where people don’t want this infrastructure. It is ripe for innovation.”
Onshore transmission infrastructure has long been the monopoly of the National Grid. However, the same is not true for offshore grid infrastructure – the cables used to transport power from offshore wind farms back to the mainland. This part of the market is open to competition.
The Government paved the way for change with the passing of the 2023 Energy Act, which tasks Ofgem with setting up onshore competition as soon as possible. The regulator has been told to identify the first slew of projects that could take up the challenge by this summer.
An Ofgem spokesman said the regulator routinely held discussions with energy companies on a range of topics and could not comment on any talks with Octopus.
The regulator has said it will consult on the competition proposals in “early 2024”.
National Grid is in the process of an unprecedented expansion to enable Britain’s switch to net zero, which will entail the electrification of large parts of industry such as transport and heating.
The company currently manages 22,000 pylons carrying about 4,500 miles of high-voltage cable but it is planning a three-fold increase in capacity by 2035.
It comes as the Grid struggles to tackle a long waiting list of “ghost projects” that are holding up connections for wind, solar and battery projects across the country.
Projects currently take up to 13 years to get connected, with more than 1,600 currently on the waiting list.
Most of these are “phantom” developments that will never come to fruition, but the first-come-first-serve queuing system means they are blocking the way for other more viable developments.
The National Grid is seeking to overhaul the queue but is struggling to halt a flood of spurious applications.
