Obtaining electricity network connections for new housing developments is often constrained by the current regulatory investment methodology as well as by technical and other factors.
This is being exacerbated by increasing electrical demands arising from the electrification of heat and mobility to meet decarbonisation targets.
This can result in sub-optimal investment decisions focused primarily on short-term compliance workarounds, rather than lifetime performance on either environmental or economic grounds.
Today, in order to justify any network investment which is to be included within a DNO’s regulatory asset base (RAB) there must be a demonstrable immediate need for network capacity. This means that, even if there is a clear future need for, say, an investment in a particular area adjacent to a site already under construction, unless an application is imminent, it is not permissible for the DNO to make anticipatory investments. This often results in sub-optimal network design (which is developed piecemeal rather than strategically) and results in long delays for new or upgraded connections.
Such delays may result in a project representing too high an investment risk for a potential developer and will at least result in increased costs being passed on from the DNO to the developer. It may even result in certain sites which might otherwise represent good investment opportunities becoming unviable to the commercial loss of the developer, but also to the detriment of communities which need additional homes, or to the environment if potential renewable generation cannot be connected economically.
Potential solutions in this area have been discussed over many years. However, the increasing urgency to both stimulate economic growth in the wake of the global pandemic and to develop sufficient numbers of low carbon homes have added a new imperative to the debate.
A number of actions are required including the development of implementable solutions to the specific regulatory, technical, economic and other obstacles. This new whitepaper explores these challenges and makes a number of recommendations.