Ofgem’s approval of changes to connecting energy projects of less than 5 MW can drive rollout of small-scale distributed schemes.
“Streamlining the connection of projects under five megawatts can accelerate the build-out of smaller utility-scale local renewable energy schemes in the UK to generate clean, carbon-free energy for communities, businesses and households” said Anthony Maguire, Longevity Power’s Managing Director, commenting on the Ofgem decision, taken earlier this month. “Smaller utility-scale energy projects between one and five megawatts in size are a crucial but currently underdeveloped segment in the UK’s energy transition. Projects like smaller solar PV systems strike a balance between the economies of scale of large solar park installations versus the site-specific flexibility of rooftop solar PV systems.”
Ofgem’s approval of the NESO change means small-scale distributed energy projects with a capacity of less than five megawatts, such as community-based schemes, no longer need an Evaluation of Transmission Impact Assessment (TIA) by NESO before they can connect to the grid. They can come on stream more quickly and start delivering low-cost clean energy into the UK’s energy system for households and businesses to use.
“The size and location of smaller community energy schemes deliver a number of operational benefits” added Mr Maguire. “They’re often located closer to the point of consumption, such as industrial estates or communities in rural and urban areas alike. This reduces transmission and distribution costs and eases congestion on the grid. Smaller developments are also ideal for unused land like brownfield sites or redundant farmland because they can be deployed more quickly and with fewer planning hurdles than larger projects. Ofgem’s decision to remove the TIA requirement means these schemes can roll out faster and begin generating clean energy. Community-based solar projects in the UK and community solar initiatives in the US share a common goal of empowering local stakeholders to participate in and benefit from renewable energy. But they differ significantly in structure, regulation, and scale. In the UK, community energy projects are often grassroots-driven and involve cooperatives or community benefit societies that own and manage renewable assets. They involve innovative financing through community shares or grants, and any profits are reinvested locally or shared among members.”
In the US, community solar is more orientated towards commerce, with projects based on a subscription model in which users subscribe to a share of the electricity generated by a nearby solar farm managed by a utility or private developer. This enables the community to participate more widely without actually having to own part of the site. It broadens participation and is attractive to private investment, enabling the development of mid-sized solar facilities that are located closer to the point of consumption. This reduces transmission losses and grid congestion and has helped to make community solar the fastest-growing segment of the US solar market.
If the UK adopted the model, according to Maguire, it could rapidly ramp up its grassroots solar capacity across the country.
“But without such a structure in place, smaller projects here risk remaining stuck in a policy and financing limbo that prevents community level solar taking off and achieving its potential, in terms of lower energy bills for customers: more energy independence and security for the country: and contributing to the nationwide push to achieve net zero by 2030” added Mr Maguire.
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