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Plugging in: Understanding the risks of connecting to our national network

Post by

Jim Connolly

Strategic Development Director

Plugging in: Understanding the risks of connecting to our national network

Our move to a renewable future is well underway. More and more of us are choosing electric over petrol and our coal mines are soon to be a distant outline in our sustainably made rear-view mirrors. But as the transition from fossil fuels to renewables gathers pace, our supporting infrastructure still lags behind.

If we’re all going to be driving electric by 2050, our grid network has to go through a rapid transformation – not only branching out into every home and service station up and down the country but connecting up every new source of renewable power.

For renewable developers, connecting to the grid isn’t without its bumps in the road. Alongside having to apply for planning permission to build wind or solar farms, they also have to apply for permission to connect to the grid through their District Network Officer (DNO). And much like the planning application phase, it can be a painstaking and costly process.

A common flaw in the current system is having to wait behind a queue of applications that aren’t necessarily seeking approval. Developers will join the application process just in case they decide to build, but without really having any concrete plans to do so. It means those that are serious have to wait to be processed behind a long line of ‘empty’ applications.

Location is also a common sticking point for these types of projects. Wind farms by their very nature are often in remote locations. Their electrical lines have to travel hundreds of miles along seabed, land, or both to reach a suitable connection point and that journey from site to grid can throw up all manner of legal and environmental challenges.

The irony of large-scale renewable projects is the possibility of a developer unearthing an environmental issue when laying electrical lines back to the grid. Their excavation works could uncover a contaminant that’s been sat dormant for a number of years and has now all of a sudden caused a major pollution event.

Also, in laying these lines across country, at some point a developer will need access over someone else’s land. Which likely means being caught up in a legal dispute around needing easements to keep building.

They’re just the types of costly risks that can dissuade funders and developers from investing in the sector in the first place. It’s enough just to overcome whatever legal battles come from developing a site, let alone having to withstand the additional risks that come with connecting to our national network.

But for our renewable infrastructure to ever stand any chance of meeting its end goal, it needs to maintain a steady influx of investment.

The financial risks around these complex projects will never disappear. But we firmly believe the right insurance strategy can make these risks more manageable, encourage more investment in the sector, and keep our renewable transition heading in the right direction.

As an example, our Planning Costs tool mitigates the cost of applying for planning if permission isn’t granted. Part of the policy covers abortive costs. So if a developer is successful with their grid application but fails to win around their planning authority, we’ll cover the cost of the planning application as well as the money they spend on a grid connection that’s no longer usable.

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