National Grid has funding certainty from Ofgem for just 4% of the network investment necessary to support Boris Johnson’s offshore wind target of 40GW by 2030, the company’s head of strategy has warned.
Delivering evidence on Tuesday (2 November) to a House of Lords select committee, Claire Dykta said that “15 major projects” are required in order to connect the additional offshore generation needed to meet the target to the onshore power grid.
She told the Lords Industry and Regulators Committee, which is conducting an ongoing inquiry into Ofgem and net zero, these projects will require £10 billion of investment.
However, Ofgem has only provided “clarity” over £400 million of that total, Dykta said.
“Not having certainty over funding means we can’t place orders for cables, we can’t work with the supply chain to create efficiencies and it is really difficult to come up with innovative delivery methods. Without certainty, we can’t fund the infrastructure going forward.”
She added that the urgency of establishing greater funding certainty was compounded by the timescale for such projects, which generally take nine years to deliver.
Pointing to the prime ministers’ 2030 target, Dykta said: “We’re already into the nine-year time period so it’s already a significant delivery challenge.”
The need for greater certainty extends to the planning regime for projects so that the networks become “enablers” rather than “blockers” for meeting net zero , she said: “It is really important that we have clarity in planning regulations and national policy statements so that there is clear commitment to that infrastructure being delivered.”
And pointing to the Climate Change Committee’s advice in the sixth carbon budget that the grid must be largely decarbonised during the next decade in order to enable the net zero goal to be achieved, Dykta said: “Foundational infrastructure must be in place this decade. There needs to be real clarity on the national policy statements soon.”
The “real danger” of missing the delivery of this foundational infrastructure this decade is that the UK is subsequently “always in catch up mode”.
Jake Rigg, director of corporate affairs at National Grid Electricity System Operator, told the committee that there is a need to be “open eyed” about the potential risks of failing to deliver the infrastructure required to deliver net zero.
He said: “If we are going to get anywhere near net zero, this is not a generational problem that we have a lot of time to sort out and solve.”