The chief executive of Octopus Energy has said the company plans to invest billions of pounds in building energy infrastructure abroad becuase the wait time to get generation projects connected to the UK grid is too long.
Speaking in the Daily Telegraph, Gregg Jackson explained how red tape, planning obstacles and the current connectivity logjam for energy generation projects was forcing Octopus to look overseas to invest its capital.
He said: “We have got access to billions of pounds of capital. We’d like to deploy that here in the UK but capital goes where it can be deployed.
“At the moment, it is easier to build a lot of infrastructure in France and Germany than here in the UK.”
The connectivity logjam the UK is currently experiencing is restricting renewable energy projects from connecting to the grid. Projects are allocated a connection date based on a “first-come, first-served” basis, even if the vision is not fully realised. This is hindering the UK in achieving its targets of 50GW of offshore wind capacity by 2030 and 70GW from solar by 2035.
Jackson said: “There’s a solar farm we want to build in County Durham and we won’t get a grid connection until 2037. That’s 13 years where that capital can’t be deployed.
“At the same time, we can deploy capital in other countries.”
These comments come despite Ofgem having recently changed the rules so that energy generation projects under development will be forced out of the queue for connection to the grid if they did not meet strict milestones in their development. This change was a big step away from the existing “first-come, first-served” system, which has led to a long queue of energy projects waiting to be connected. These projects currently queued have the cumulative capacity to generate almost 400GW of electricity, far more than the demand for electricity.
The move came after electricity networks commissioner Nick Winser called on the government to take action to halve the time taken to build clean electricity transmission infrastructure in the UK, which is currently between 12 and 14 years.
In his interview with The Telegraph, Jackson said: “I think 2023/24 is the year in which fossil fuel companies have woken up to the very real threat that their businesses now face. Already, electric vehicles are taking 1.5M barrels of oil off the road every day
“That’s enough for oil companies to start noticing problems and you are beginning to see some scale back production forecasts.
“As a result, some are trying to foster a backlash against the [net zero] transition. I think some of them are beginning to get very worried about what their future looks like.”
He continued: “Octopus’ businesses in France, Italy, Germany, France, Spain and Japan are all growing on the same trajectory that the UK did.”
This was reiterated in June when the Local Government Association (LGA) warned there are 1,150 green energy projects in the UK that have received planning permission but cannot yet be built due to concerns around connecting to the grid.
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