Over the past few years, the UK has been working closely on redesigning its future transmission network infrastructure, to significantly step up offshore wind integration. Innovative thinking in network design has become imperative to achieve the country’s latest offshore wind ambitions of 50 GW by 2030 (the previous target was 40 GW), set by the British Energy Security Strategy (BESS) in April 2022. At present, its offshore wind capacity is about 11.3 GW. The original radial approach to designing, building and connecting offshore wind farms is no longer fit for purpose, with expectations of future capacity now significantly higher.
Against this backdrop, in July 2022, the country’s electricity system operator, National Grid Electricity System Operator (NGESO), released its Pathway to 2030 Holistic Network Design (HND). This is a part of the government’s Offshore Transmission Network Review (OTNR) efforts to find appropriate solutions in the medium term. The HND sets out a single, integrated design to support the transmission of large-scale offshore wind generation to load centres across Great Britain. It entails an investment of GBP 54 billion to facilitate the connection of about 23 GW of offshore wind by 2030. It marks the first step towards more centralised strategic network planning, which is critical for delivering clean and affordable power to achieve the long-term net zero objective.
In a related development, the British energy regulator, Office of Gas and Electricity Markets (Ofgem), published its minded-to decision on the delivery model for the offshore network in May 2022. While the NGESO’s HND gives a high-level view of the network requirements to connect in-scope generation projects, Ofgem’s minded-to decision explains how it intends the network to be delivered. NGESO delivered the HND in close consultation with the UK’s three onshore electricity transmission owners (TOs) – National Grid Electricity Transmission, SSEN Transmission and SP Transmission – which have welcomed the HND plan, affirming that a subsea superhighway is now under development.
Background – OTNR
The UK Department for Business, Energy and Industrial Strategy launched the OTNR in 2020 to ensure that transmission connections for future offshore wind capacity are delivered economically and efficiently, taking into consideration the environment, cost to consumers, local communities and deliverability. Three workstreams were created in the OTNR to cover offshore wind projects at different stages of development – Early Opportunities, Pathway to 2030 and Enduring Regime. Multipurpose interconnectors are also considered across the three workstreams. Along with offshore wind projects already connected and those that are well advanced in their development, including those within the scope of the Early Opportunities workstream, the HND facilitates the BESS offshore wind ambition for 2030. The HND is part of the Pathway to 2030 workstream and is an initial and significant step towards a more centralised and strategic approach to network planning.
As mentioned above, the HND goes hand in hand with Ofgem’s recent minded-to decision. Projects in the scope of the Pathway to 2030 workstream are in early stages of development and are located around Scotland, Wales, the east coast of England north of the Wash and southwest England. Notably, for the first time, the HND delivers a high-level view of the required onshore and offshore network that simultaneously enables offshore wind connection to shore as well as transmission of power to the demand centres, particularly London and the southeast. Ultimately, the Centralised Strategic Network Plan proposed by Ofgem in their Electricity Transmission Network Planning Review (ETNPR) envisages an integrated approach to network design and delivery across the onshore and offshore networks and changes are due to be implemented by 2024. Offshore-specific arrangements will be established through the Enduring Regime workstream in alignment with the ETNPR. This includes deployment planning for future offshore wind leasing rounds and the rules associated with multi-purpose interconnectors.
HND – Key highlights
The HND-recommended design would connect 18 in-scope offshore wind projects to the onshore network: 8 GW of projects successful in the Crown Estate offshore wind leasing round 4 (R4); 11 GW of projects successful in the ScotWind leasing round (about 25 GW that were awarded seabed leases); about 1 GW of floating offshore wind from the upcoming Celtic Sea leasing round (involving auction in mid-2023 for 4 GW of floating offshore wind to be delivered by 2035); and about 3 GW of other sites that are located near R4 and ScotWind sites, to test whether there are opportunities for coordination.
To connect this offshore wind capacity, the HND has been designed as an economic and efficient solution that is deliverable and operable, and considers the impact on the environment and communities. The design approach is based on six building blocks. The design objectives were set by the OTNR project board as mentioned above. The second block involved establishing offshore network design options, which include mapping the study areas that jointly cover all in-scope wind farms, identifying technologies and locating potential grid interface points. Thereafter, the initial strategic appraisal of these options was conducted against the HND objectives. It may be noted that in developing the design, careful consideration has been given to the location of interface points to minimise community and environmental impacts. Where the recommended design has a greater environmental impact than the radial design, this has been weighed against the benefit of maximising the design’s contribution to meeting net zero targets. The initial strategic appraisal was followed by the economic assessment of each option and then the final strategic appraisal where the final recommended design for the offshore network was produced.
For onshore grid reinforcements, the HND is informed by NGESO’s Network Options Assessment (NOA), which identifies the wider network reinforcements needed to improve network capability. The NOA process was rerun with the recommended design for the offshore network, which came to be called NOA refresh process, which produces a fully optimised set of onshore reinforcement recommendations. Therefore, the final HND consists of a recommended offshore network design and an updated onshore network design.
Essentially, the HND identifies 15 landing points and establishes new offshore connections between different onshore regions to transfer power and avoid bottlenecks, particularly between west Scotland and North Wales, as well as between east Scotland and the east of England. The recommended offshore design includes 275 kV high voltage alternating current (HVAC) offshore substations and cables; 10 new 525 kV high voltage direct current (HVDC) circuits with appropriate converter stations, offshore substations and cables; as well as two new multi-terminal HVDC systems. Additionally, the HND design has identified 94 onshore projects. Of these, 11 reinforcements require acceleration in their delivery to meet the 2030 targets and are reliant on the commitments outlined in the BESS. Further, several of the remaining 83 projects need to be delivered before 2030 to smoothen supply chain requirements and allow coordination of access to the main transmission network during construction. While most of the identified onshore projects have already been assessed by TOs against similar design objectives as part of their project development options appraisal process, some are yet to be appraised beyond a high-level assessment. More detailed environmental and community impact analysis will now be carried out by TOs on these particular options, to build on the initial assessment.
Network designs are presented in the report across four offshore regions, which have been defined based on the opportunity to coordinate between different offshore wind regions within the HND. These are northwest (NW), North Scotland, east coast and southwest (SW). Further, the report recommends reinforcements based on a system-wide view. Wales has been considered in two separate parts – while North Wales is included in the NW region (with greater opportunities for coordination between the Irish Sea wind farms), South Wales is included in the SW region (as there are opportunities for coordination between the Celtic Sea wind farms). Similarly, West Scotland forms part of the NW region, North Scotland is treated as its own region and the east coast of Scotland is considered along with the east coast of England. England itself is considered as part of three regions – NW, SW and east coast. The southeast and south coast region does not contain any offshore wind directly covered by the HND as the majority of the projects in this area are well developed and have been identified as part of the OTNR Early Opportunities workstream.
In the NW region, the offshore wind in West Scotland connects to a T-point with connections to both Scotland and Wales. The Irish Sea wind farms are linked radially with the two, sharing a route corridor. In North Scotland, the final design connects the two wind farms radially. In the east coast, the recommended design is a combination of radial and coordinated connections. The latter design provides an offshore network that delivers extra network capacity between Scotland and England, as well as connecting five wind farms. In the SW region, the indicative design is a coordinated connection into South Wales. However, this is subject to change based on the outcome of the Crown Estate’s Celtic Sea leasing round.
Broadly, the HND’s recommended design will deliver significant benefits as compared to an optimised radial design. The cost of the offshore network infrastructure required in the recommended design is GBP 32 billion, compared to GBP 24.4 billion for an optimised radial design. The cost of the related onshore network infrastructure is GBP 21.7 billion. Although the HND design leads to an extra GBP 7.6 billion in capital costs due to additional offshore infrastructure, this is outweighed by the GBP 13.1 billion in constraint cost savings compared with a radial design. The recommended path, therefore, offers the overall net consumer savings of about GBP 5.5 billion. Additionally, the plan could create up to 168,000 jobs by 2030, reduce the cable impact on the seabed by up to 30 per cent and reduce CO2 emissions by 2 million tonnes (mt) between 2030 and 2032. It would also increase OSW availability in the system by 32 TWh over a 10-year period from 2030.
Ofgem minded-to decision on offshore network delivery model
After considering six potential delivery models for coordinated offshore transmission in its July 2021 consultation, Ofgem announced in May 2022 its decision to adopt a “very late competition generator build” model for Pathway to 2030. Under this model, generators will construct assets before they are tendered, so the competition only focuses on financing, and operations and maintenance. Ofgem has opined that this is the best option to deliver the coordinated offshore transmission required to achieve offshore wind targets, at reasonable costs and within the available time. It has also confirmed its decision to continue to use the current offshore transmission owner (OFTO) regime where the HND recommends a radial link as the optimal solution for connecting the offshore wind project to the wider transmission system. It will work with NGESO to determine how non-radial infrastructure will be delivered. Ofgem’s minded-to decision applies to ScotWind and R4 projects as well as a project from an earlier leasing round. Further, it plans to work with stakeholders to provide clarity on the delivery model for the Celtic Sea in the future.
Further, the regulator consulted on the implementation of the selected offshore network model, the deadline for which closed on July 15, 2022. The consultation focuses on three key areas – the introduction of a gateway assessment process for the development of coordinated infrastructure; arrangements for very late model tender process; and further policy considerations on consequential changes that may be required to the existing OFTO regime to accommodate the introduction of non-radial offshore connections (including any changes to existing obligations and incentives; and the structure of the tender revenue stream).
The publication of the HND is just the start of the delivery of the transmission network required to integrate 50 GW of offshore wind by 2030. It needs to be followed by further innovation by the UK government, Ofgem, onshore TOs, NGESO and other industry players to ensure the delivery of commitments in the BESS. NGESO has been developing the HND follow-up process, which aims to provide in-scope developers with follow-up recommendations in the first quarter of 2023. It will include the remaining 15 GW of ScotWind leaseholders and any capacity made available through the ScotWind clearing process. It is also expected to include the 4 GW of Celtic Sea capacity.
Further, the HND will be followed by the Detailed Network Design stage and consenting process, which will develop the HND recommendations further to determine technology choices, transmission routes and where substations and converter stations will be located. Prior to this, Ofgem will declare the asset classification – whereby it will determine which of the transmission assets in the HND will become “onshore transmission” and which will become “offshore transmission”. This will be based on its primary function, rather than location.
Over the past couple of years, a lot of activity has been taking place at the top level – both policy and regulatory – to redesign the transmission grid. However, industry experts have called the 2030 target too optimistic and cautioned about addressing challenges relating to supply chain for offshore and onshore network and the permitting process to achieve the desired results. Notwithstanding these challenges, the UK’s transmission sector is poised for a sea change in network planning and development in the coming years.