What impact will the Prime Minister’s net zero policies have on BESS development?

This article was written by Nick Bradford, managing director at Atlantic Green UK, a joint venture between Interland and Nofar Energy that invests, develops and operates grid-scale battery energy storage projects in the UK.

On the 20th of September, Prime Minister Rishi Sunak announced a new approach to net zero. Sunak was critical of promises made but not delivered, the arbitrariness of targets and lack of accountability within politics.

He then confirmed the UK would push back the deadline for selling new petrol and diesel cars and the phasing out of gas boilers, measures which have rightly received heavy criticism.

The Prime Minister has chosen short term political gain at the expense of delivering on net zero. The knock-on impact of these postponements will be the slowed deployment of renewable energy generation and the vital integration of battery energy storage systems (BESS) into the grid.

That said, there are elements of Sunak’s new approach that are welcome, namely the announcement of a spatial plan for infrastructure, and measures to speed up both planning for Nationally Significant Infrastructure Projects (NSIPs) and grid connection times for renewable energy developments.

Sunak was right to recognise the opportunities that green industries provide to the UK including job-creation across multiple sectors. Green industries are vital in combating climate change and reaching the UK’s net zero targets. At Atlantic Green, we see first-hand the challenges faced when attempting to develop and connect BESS projects to the grid. This has to change. BESS development is vital to ensuring increased deployment of renewable energy technologies throughout the UK. 

The postponement to targets set by Sunak’s predecessors is not congruent with a fast-moving ambitious shift in the UK to renewable energy away from fossil fuels. We welcome policy changes that enable our industry to face fewer stumbling blocks as we address climate change.

As an industry we face several challenges including a lack of certainty when entering the market, delays due to the planning system, and a long backlog of developments seeking grid connection. Aspects of Sunak’s announcement relating to reforms to energy infrastructure regulation may facilitate the increase and delivery of BESS developments (albeit several of these were already in the pipeline and do not represent new commitments). The three core improvements mentioned in Sunak’s statement relate to the spatial planning regime, planning for NSIPs and grid connections. 

We now have a commitment to an improved spatial planning regime

Sunak’s announcement of the “UK’s first ever spatial plan for that infrastructure to give industry certainty and every community a say” is a positive development. Spatial planning is vital to ensure successful BESS developments as it will ensure land chosen is in keeping with national environmental, social and economic objectives, reduce the surplus of applications in one area based upon grid connection and ensure BESS is concentrated in areas of greatest need. 

A spatial plan for infrastructure will foster stability in the industry, whilst providing an added layer of certainty for prospective investors and avoiding the speculative development of projects in unsuitable locations. 

Significant improvements for nationally significant projects 

Sunak’s pledge to “speed up planning for the most nationally significant projects”, if realised, will lead to celebration amongst BESS developers and planners throughout the UK. The current planning system can only be described as cumbersome and contrary to the UK hitting its net zero goals. 

On average, the NSIP process takes around 15 months for planning to be approved and includes six key stages.  If the government can speed up planning for NSIPs, the UK will be able to reach its Net-Zero goals faster while ensuring energy security and alignment of projects with a coordinated national plan.

Energy security since the Russian invasion of Ukraine in 2022 has been a key concern for the government as the reliance on Russian gas led to an energy crisis in the UK and Europe. NSIPs are vital to achieving the UK’s net zero targets as the capacity of an NSIP far outstrips that of a development that goes through the Local Planning Authority of a local council.  This would be a material improvement compared with existing application processes which are onerous and puts off investors and developers.   

Good for Grid 

The deployment of BESS at a scale commensurate with net zero goals will only occur when grid access constraints are fixed. With regards to the grid connections, Sunak stated “we’ll end the first-come-first-served approach to grid connections by raising the bar to enter the queue and make sure those ready first, will connect first.“

This announcement is consistent with reforms already being considered by the Transmission System Operator and the team at Atlantic Green, together with the rest of the developer community, are keenly waiting for such changes to be implemented.  

Delays in grid connections costs the industry large sums of investment and hinders the UK’s ability to reach its climate goals. Developers can face up to a 15 year wait for a grid connection. The current process does not prioritise the readiness of developments, so otherwise viable projects can sit waiting or be passed-over in favour of other sub-optimal solutions.

However, as this change occurs the government must simultaneously look to upgrade the grid to ensure there is capacity for new renewable developments. We will only achieve net zero if we have a modernised grid, which is connected to significantly more flexible sources of renewable generation.

Confidence amidst the challenge

Like many, we are dismayed with certain aspects of Sunak’s announcement, particularly the setback it represents in terms of crucial climate targets and the potential impact on investor sentiment. We acknowledge and appreciate the positive elements related to the spatial plan and grid. If these positive outcomes are to make a real difference to renewable energy development, they will need to be aligned with tangible objectives and a robust system of regular assessment and progress measurement.

Nonetheless, our overall outlook at Atlantic Green remains optimistic. We firmly believe in the resilience of market fundamentals and are committed to pursuing our development strategy with unwavering determination, confident that we can overcome the challenges posed by this announcement and continue to thrive.