Recommendation 22

HM Government · verbatim extract Accepted

The Government recognises that grid connection costs can be high in rural areas due, for example to distance from the existing network. Ofgem are revising how customers are charged for connecting to the distribution networks, meaning that they will no longer have to contribute to (in the case of demand connections), or will contribute less to (in the case of generation connections), network reinforcement costs to accommodate their projects. This should mean reduced connection costs for projects in rural areas where the existing network may have less available capacity. With regards to grid reinforcement more generally so that all consumers, including those in rural areas, can be connected to and use the electricity grid, approval for any project is a matter for the independent regulator, Ofgem. The Government supports Ofgem in its work to strike the balance between enabling sufficient capacity on the network and doing so at a level that is economically prudent, to avoid the risk of assets which are not used to their full capacity and potentially wasting consumer money, and very much welcomes the approach that Ofgem is taking in its regulation to enable a greater amount of investment ahead of need on the network. Officials are updating the energy National Policy Statements (NPSs), including the draft electricity networks NPS (EN-5), which sets out Government’s position on undergrounding and subsea cables as alternatives to overhead lines. The draft EN-5 has been updated to include the presumption of undergrounding as the default in nationally designated landscapes, such as Areas of Outstanding Natural Beauty. However, in all other cases, the presumption is for overhead lines, and the Secretary of State should only grant consent for underground or subsea sections of a line over an overhead alternative if the benefits clearly outweigh any extra economic, social, or environmental impacts, and any technical obstacles are surmountable. Community energy Recommendation 10: We recommend that the Government engage directly with community energy projects in Wales to understand the difficulties they face connecting to the grid. The UK Government should lead a working group made up of the Welsh Government, grid infrastructure owners, energy companies and communities to explore how access to the grid for community energy projects can be improved in Wales.