By Chris Calvert, Executive Director of Planning at Pegasus Group
The UK’s grid connection queue has long been criticised as inefficient. The allegation being that too many speculative projects have reserved capacity they may never use. The Government’s new grid reform is meant to address this by prioritising projects that are ready to connect.
Noble intentions aside, the current proposal to tackle speculation risks creating two tiers of energy projects. One tier has projects with early, bankable grid slots. The other becomes the ‘rejected tier’, where projects are not sufficiently progressed.
In the long run, this could yield unintended consequences, choking the UK’s pipeline of energy projects through the planning system, and constraining supply when it is needed.
However, combining Government grid reforms with some flexible allowances could avoid this.
The Government’s grid reforms create a chicken-and-egg scenario that could bottleneck energy planning
To explain the unintended consequences of the UK’s grid reform, here’s an example.
A project may sit outside the current queue, known as a Gate 2 project, meaning it is not currently considered a ‘well progressed project’ that is ready to connect to the grid. Even if it is a high-quality scheme, opponents may argue it is not needed because:
- It currently sits outside the queue.
- National solar deployment targets have been met by projects already in the Gate 2 grid connection queue.
Indeed, such arguments have been run at a recent public inquiry into a solar scheme. Such arguments are erroneous, however, as they ignore the logic and requirements of national planning policy and the recent draft National Planning Policy Framework (NPPF).
The NPPF states there is no requirement to demonstrate need for such schemes, and indeed, further states that ‘substantial weight’ should be given to the benefits of renewable and low carbon energy projects.
In practice, that creates a ‘chicken and egg’ situation. Planning authorities may be less likely to grant consent to projects that are grid-ready ‘later.’ Network operators, meanwhile, won’t offer capacity to schemes that don’t have planning permission.
If neither system is willing to move first, this affects developers, investors, and arguably the UK’s entire energy supply.
More planning applications means more choice for good energy schemes
A developer always takes a risk if they believe a good project in the right location will get a fair hearing on its planning merits. But that risk may not be worth it if later-queue projects get refused because targets are already met or ‘other projects are farther in grid status.’
In the long term, this is bad for the energy sector. Fewer schemes brought forward means less choice for planners and the UK grid. Over time, that could make it harder to respond to changes in technology, land availability, and local constraints. A system with a shallow pool of consented projects is less able to cope if some early schemes stall or fall away. At Pegasus, we are heavily involved in the development of consenting strategies, identifying and mitigating risk at an early stage, increasing the planning prospects for a scheme. This includes assessing the position of the project within the grid reform process.
Minimum production thresholds keep our energy pipeline healthy
The Government will inevitably set more targets for energy production in the years to come. Energy security and a productive economy reliant on abundant and cost-effective energy is a time-served concept, alongside the drive toward Net Zero. Meeting those targets means we need the tap of planning applications flowing.
In our response to the NPPF, we have argued that capacity figures in CP30 and in emerging strategic energy plans must be clearly presented as minimum levels for planning purposes, not as ceilings. That is, the planning system must support at least those levels of deployment. While it may sound like semantics, it’s an important distinction that avoids treating milestone completion as a reason to stop approving projects.
If targets are understood as minimums, a surplus of consented projects suddenly becomes more desirable. In very simplistic terms, if the grid needs ten operational schemes in one area, but there are twenty with planning permission, decision‑makers can pick the best ten based on technical characteristics, timing, and fit with network capacity.
That gives the system headroom and flexibility, which is what the energy sector now needs.
Grid reform must be flexible
None of this is to say grid reform shouldn’t happen: the previous queue model was unsustainable. But to avoid bottlenecking the nation’s energy pipeline, more flexibility is needed, not less.
More flexibility in the Government’s grid reform could bring forward better, more deliverable projects without shutting the door to later, potentially better schemes. Less flexibility risks discouraging investment, shrinking the pipeline, and making it harder to decarbonise.
If you have any questions regarding the content of this blog, please contact our Executive Director of Planning, Chris Calvert.