"Phantom" power projects that lack the money and land rights to proceed are clogging up an already hugely oversubscribed queue for the British electric grid, says Centrica, after a report it commissioned found this is hurting the UK’s green goals.
“In recent years energy security has rightly moved up the agenda as countries look to secure supplies and drive the transition to net zero,” said Chris O’Shea, CEO of energy services company Centrica, which owns British Gas.
“That’s why it defies belief that the queue for new, green energy connections is blocked by ‘phantom’ power projects.”
“Not only do these ‘developers’ not have the money to develop,” he said “many also don’t even have planning permission or land rights – they’re gambling that holding a space in the queue will make them rich.”
His comments come as Centrica today (Tuesday) published a report it commissioned from consultancy Charles River Associates on the queue for the electric grid in Great Britain and what can be done to improve it.
The report comes as UK government energy regulator Ofgem prepares to decide next month on how to streamline the queue.
The current system for connecting new projects to the grid was designed for adding a “small number of large fossil fuel generators connecting each year,” found the report.
“With the rapid proliferation of renewable energy projects,” it said the existing queue is between three and four times oversubscribed – a situation that has become “significantly worse in the last few years.”
The report found there are currently 371GW of projects in this queue, with around 166GW of these due to be connected by 2030.
Around 114GW worth of projects have listed their connection date as before 2029, but around 62GW of those projects are “still in the scoping phase” and may not even have secured land rights or planning consent.
The longer queue and wait for connections “increases uncertainty for developers,” the report argued. It found that there are no available sites to connect generation in South Wales, North Wales, the North West or the South West before 2036.
This has a “damaging effect” on the investments required to meet the UK’s net zero goals, it said.
Ofgem is currently deciding on whether to rectify these issues by handing National Grid ESO, the transmission system operator in Great Britain (but not Northern Ireland), the power to terminate agreements to connect projects if they miss key milestones.
Ofgem is weighing whether to apply this proposal to projects that are already in the queue or only to new or modified projects.
The report said that only applying it to new projects would have “limited effect” due to the large number of delayed projects in the current queue.
Currently, the report found that 12.3GW of solar, onshore wind and storage projects expected to connect by 2029 are “unlikely to connect without delay.”
They would therefore risk being terminated if the proposal was applied to existing projects.
O’Shea said that “thankfully Ofgem has now recognised the need for action but every day we wait for action is costing consumers money.”
He said that “urgently introducing” rule changes and applying them to the existing queue so that “phantom projects lose their place” would show that Ofgem is helping reduce costs for consumers, drive the energy transition and improve the UK’s energy security.
