Injecting renewable energy into the network is being delayed, and the cost reductions available from standardisation are not being realised, because networks’ technical requirements and processes vary. Early payments and capacity problems on the system are major barriers.
Sound familiar? Did you think all those problems had been addressed? Probably yes, if you thought it was referring to wind or solar. But note that using ‘energy’ was deliberate: these are renewable heat projects that would inject biomethane into the gas distribution network, reducing carbon emissions while helping manage sewage and other waste.
The industry received a boost from the Renewable Heat Incentive, and around 80 projects have been connected since 2013. Now New Power hears that several hundred more have made inquiries, but development has been frustrated.
A major problem holding back developers has been lack of capacity for the gas grid to accept their gas. It is possible to upgrade the network and that needs investigation – but it could also be addressed, as it has in electricity, by offering more information: an estimate of how often injection is likely to be limited, and an option of ‘soft’ connections that are constrained at times.
Meanwhile, a developer who decides to go ahead with a project may have to pay full connection costs upfront and then sit it out while it waits months for that work to be completed (and reports on whether competition is reducing the timescale and cost for connection are mixed).
What is frustrating is that these problems – or ones very like them – have been largely addressed for distributed power projects.
Developers waiting on decisions over the Renewable Heat Incentive are hoping a decision will be made before the end of the year. It’s a good time for Ofgem to knock some heads together.
These are regulated networks, not competitors. They ought to be able to develop consistent requirements for such projects – it would save their time and reduce their costs, too, if they could be sure applicants were not working to the wrong brief. Ofgem has forced networks to come up with single methodologies before and it’s time to copy that ‘hard stop’ on negotiations.
It’s also down to Ofgem to make sure the connections process is competitive. We have competition in that part of the market and companies are out there: force it open.
This has all been done before. Why is the biogas industry held back by what is slow changes to regulations and inconsistencies, when exactly the same issues have been dealt with just across the Ofgem office by its electricity team?
The industry is unlikely to be able to push BEIS to fast track its Renewable Heat Incentive decision. There seems to be no reason at all why Ofgem can’t help the industry prepare to streamline the process, work on dealing with capacity issues and lower costs, so when subsidies are agreed this growing industry can make the most of what is on offer.