Flexible connections are changing the UK’s electricity landscape — but will they help us reach net zero emissions?
by Ramin Dilmaghanian, Projects Director and Beatrice Moda, Associate Projects Director at Namene Solar
The way electricity is transmitted and distributed in the UK is evolving in a way that can accelerate progress in the fight against climate change.
An increasing number of distributed generators — that is technologies that generate electricity at or near where it will be used, are connecting to the grid, and they are doing so at almost all voltage levels.
To accommodate the growing number of these distributed generators, Distribution Network Operators (DNOs) have been pushed to find cost effective solutions for these new generators to be able to access their networks. This has sparked the growth of “flexible connection” solutions.
Economically viable solar, enabled by these flexible connections, could help us reach net zero emissions targets.
What are flexible connections?
For the many developers looking to secure grid capacity to connect the network, DNOs now offer “flexible connection” solutions. These flexible solutions are enabled by “Active Network Management (ANM)” schemes, that allow generators to connect to the grid without the need to pay for costly reinforcement works.
By actively managing electricity generating assets, ANM schemes avoid overloading the grid and manage the power exported to the grid to keep the grid operating within safe margins. These connections are potentially more affordable but the downside is that the export capacity of generators is curtailed under the control of the DNO and their revenue stream affected as a consequence.
According to the Energy Networks Association coverage and volumes of flexible connections are set to increase in the next few years. By the end of 2019 there were already over 3GW of generators with flexible connection arrangements in place. 2019 alone saw 650MW added and it is likely that the number of flexible connections offers will grow to reflect the development boom in unsubsidised projects that the solar industry is experiencing. Since the start of 2019 the sector saw an average of 10–20 new project plans per month — that’s 250–500 MW new pipeline capacity every month that could potentially be given a flexible connection offer.
These more affordable connections could make significant strides towards the UK’s energy transition. But some challenges need to be addressed if they are to help the country reach CO2 emission reduction targets.
Protecting predictability and projects
Building a greater number of affordable connections is certainly a step towards cutting emissions.
They allow more renewable generators, like solar and wind, to connect to the grid and supply clean electricity to the country. If these connections are financially viable it will reduce renewable project costs, making them more attractive to developers, which will see them proliferate and boost the amount of clean energy supplied to the grid thereby lowering emissions.
However, particularly for unsubsidised projects, there are questions around the impact that curtailment could have on long-term viability. These need to be addressed in order to successfully scale-up these connections.
If it isn’t accurately assessed, curtailment poses a risk to the development of projects. The curtailment profile of a connection describes how much electricity might not be exported and for how long during the day, month or year. If this profile is inaccurate or too conservative it can damage the possibility of projects being built by underestimating or overestimating how profitable they may be. This could seriously undermine their efficacy as a cost-effective mechanism to reduce emissions.
There is a general lack of consistency in the type of information made available about how curtailment works across the Distribution Network Operators.
Some DNOs provide Curtailment Indices, which offer a curtailment cap and a periodic review of the true curtailment profile. Other DNOs provide ‘raw data’ about expected curtailment and let generators make their own assessments and forecasts based upon it. Still others provide curtailment assessments based on historical loading data which creates an expected export profile of the generator. However, a lack of clarity about the base assumptions used to inform these assessments could have a heavy impact on projects bankability.
Similarly, if curtailment impacts the revenues of these projects to the point that they are no longer viable, the overall cost-effectiveness of Active Network Management will suffer. Renewable generators — such as solar — are especially exposed to this risk, as ANM is usually deployed during low demand, high renewable generation periods.
So, what can be done?
There are actions that the solar sector and its participants can take to protect development and investment. Consistency is needed across the board, to support and maximise the appeal of flexible connections. Clarity, certainty and transparency will all support successful nationwide growth of flexible connections.
A vital part of this is information sharing that will boost transparency and allow DNOs to safeguard projects. By prioritising information sharing DNOs can foster greater confidence in the consistent, accurate financial forecasts based on these export profiles and encourage further investment in flexible connections.
This kind of information sharing should also enable and be followed by open conversation about the base assumptions used to generate curtailment profiles, to ensure that they aren’t too conservative, which would stifle economic viability.
At the same time, investors need to be able to rely as much as possible on the curtailment information DNOs provide. In addition to clarity and accuracy of curtailment profiles, investors also need to see consistency across DNOs in terms of the type of information provided. This will make it simpler to compare flexible connections like-for-like. If the UK is to reach its ambitious net zero emissions target these steps will need to be put in place rapidly.
Currently DNOs don’t have visibility of the costs that curtailment imposes on generators and they have no way of knowing if overall curtailment costs are in reality higher than the costs for reinforcement works.
To determine this, DNOs will need to use an objective, systematic approach to continually review and assess if flexible connections are, in practice, the most cost-effective solutions in the emissions reduction framework.