The project grid connection is one of the three ‘pillars’ of a project and represents the biggest opportunity as well as challenge in the current climate. With competition for grid connections at an all-time-high, it is important to be alive to potential grid opportunities as they become available.

Part of our site-finding work involves identifying areas of the country where grid capacity may be available. This is particularly important for technologies such as solar, where the economics of the technology means that grid connection cost is the single biggest factor when determining the viability of a particular project opportunity. As such, assessing the feasibility of obtaining a grid connection is of critical importance. At this early stage, without going through the entire grid connection process, we have only limited insights into the grid connection prospects. Nevertheless, engaging with the relevant network operator, reviewing the local network infrastructure and assessing the likely competition for a connection from nearby projects can provide a reasonable indication as to whether or not to proceed with a grid application.

Submitting a grid application means either i) submitting an application to connect to the distribution network, or ii) making an application to connect only to the transmission network. A distribution network application is made to a Distribution Network Operator (DNO) and a transmission network application is made to the relevant Transmission System Operator (TSO). In England and Wales, the distribution network is covered by DNOs up to 132kV, whereas in Scotland the DNOs operate up to and including the 33kV network. Applications to connect to the distribution network nearly always require approval by the relevant TSO, resulting in a second, updated connection offer. Only once a project has been through the full offer acceptance process with the DNO and TSO does a project have full visibility of its grid connection cost, connection date and likely curtailment. REG has extensive experience of making grid connection applications at both DNO and TSO level.

When a grid offer has been accepted, there are normally two types of payment required: i) payments of a capital nature which pay for the DNOs time and physical assets procured ahead of construction; and ii) security payments which help to underwrite transmission system upgrades triggered by the project connecting to the network. REG will manage these payments on behalf of its investors throughout the development process.

Once the project has been through the full grid connection offer process by the DNO and TSO, it will be given an indicative connection date (which can still be subject to change). This date will typically drive the overall project timeline. In some rare cases, the connection date is extended by agreement with the DNO to accommodate the development programme.