Billions of energy investment ‘delayed by bureaucratic electricity grid’

Tom Glover, UK chairman of Germany’s RWE, warned a lack of grid infrastructure is blocking the rollout of cheap clean energy to UK homes - Andre Laaks, Essen

Britain’s “slow and bureaucratic” electricity grid is delaying the deployment of billions of pounds of UK investment, the head of one of Britain’s biggest power producers has warned.

Tom Glover, UK chairman of Germany’s RWE, said his company’s investment plans in Britain face delays of up to five years because of the long time it takes to get connected to the grid.

Mr Glover, whose business has plans to invest £15bn in the UK, said the current system is riddled with red tape and “speculative” applications that are delaying real investment.

In a blog published on Tuesday morning, Mr Glover warned that these delays are stopping big projects like his from progressing faster.

He joins a chorus of clean energy companies that have complained they are stuck in planning limbo.

Under the current first come, first served system, many viable projects become stuck in the connection queue behind schemes with little prospect of progress or speculators who have lodged applications in the hope they can later generate interest or investment.

As a result, clean energy projects can face years-long delays in getting hooked up to the power network as they wait to progress through the queue.

RWE is the second biggest power generator in the UK and provides around 15pc of all the country’s electricity needs. It has set out plans to invest £15bn in clean energy projects in Britain, mainly offshore wind, by 2030.

Mr Glover warned that the “single biggest blocker” to getting cheaper, cleaner energy into more UK homes was now “lack of grid infrastructure”.

He said: “The reality is that the process of connecting to the grid is too slow and bureaucratic.

“For example, RWE’s low-carbon projects face between two to five years delay purely because of lack of grid – this is slowing down our investment in the UK and reducing our ability to supply lower cost, lower carbon energy – and is putting the Government’s targets for decarbonising electricity at significant risk.”

There are understood to be about 600 projects currently vying for connection to the grid, many with limited chances of success.

Mr Glover welcomes the Electricity System Operators (ESO’s) “Five Point Plan” to accelerate connections, but said plans do not go far enough.

He called for companies to be charged more to submit an application to discourage “speculative” or superfluous bids.

Mr Glover said: “The current cost of applying for and holding a connection agreement is extremely low, encouraging speculative applications at early stages in project lifecycle in order to secure the place in the queue.

“Further, the limited cost of holding the place in the queue encourages parties to hold the agreement, even if the project is unviable or delayed, until the last possible moment.”

Andy Willis, chief executive of Kona, which is developing one of Europe’s largest battery storage sites in Lancashire, backed Mr Glover’s call for tougher reforms.

Mr Willis said he would like ESO, Ofgem and the Government to look at the funding and planning applications a project has before granting it a place in the connection queue.

Development milestones should then be set for each project and those that miss them should be punished by being sent to the back of the list.

ESO is “quite lenient at the minute, they basically just let you push back your contract year after year, if you haven’t hit those milestones,” Mr Willis said.

ESO is currently part of National Grid but will be brought back under public control next year to help the UK meet net zero targets.

An ESO spokesman said: “We’re evolving our network to make it fit for the future, to deliver net zero and keep clean power flowing to the growing number of homes and business across Great Britain, fuelling our economy.

“We recognise the frustration some of our connections customers are experiencing and through our package of short-term initiatives in our five-point plan and the longer-term reforms we are determined to address the challenges with the current process which was not designed to operate the sheer scale of applications we are receiving today.”