Written evidence from the National Grid (ELV0118)

National Grid response to the Environment and Climate Change Committee inquiry: Electric Vehicles

September 2023             

Executive Summary

National Grid sits at the heart of Britain’s energy system, connecting millions of people and businesses to the energy they use every day. We fully support the Government’s net zero ambition and are committed to playing a leading role in enabling the transition, including the decarbonisation of transport – which is the largest emitting sector in the UK. Transport decarbonisation also brings wider societal benefits such as clean air, cleaner supply chains and economic growth across the UK. We welcome the opportunity to respond to the Environment and Climate Change Committee’s inquiry on Electric Vehicles.

As an electricity transmission and distribution network owner, National Grid will play a crucial role in electrification of some forms of transport and will have a role in connecting new sources of clean energy to meet this increase in electricity demand. Significant progress has already been made towards transforming our power system, with a huge expansion in clean energy and substantial investment in our electricity networks. National Grid alone is investing ~£16bn in the UK in the five-year period out to April 2026, to upgrade the country’s electricity networks to support the UK’s 2035 power sector decarbonisation, transport decarbonisation, and wider net zero targets.

On the UK’s journey towards net zero, we expect demand for electricity will increase by 50% by 2035[1], as more people shift towards electric vehicles and electric heating systems. To meet this ambition, electricity networks will need a significant upgrade and expansion. But the scale and pace of the transformation needed over the next decade and beyond is a fundamentally different challenge to what we have done to date. This transformation will require industry, government and the regulator to think and act differently. This process is already underway but now needs to step up a gear.

To achieve a successful transition to decarbonised transport, we will have to take a whole-system approach when considering the supporting infrastructure needs, consumer behaviour change and increased demand on the electricity network. We therefore also support the need for and use of Smart Charging to help balance the grid and integrate renewable generation efficiently. In addition, we support the deployment of the Rapid Charging Fund (RCF) at pace and an expansion to its remit in order to futureproof grid capacity for all road transport while delivering zero-emission technology trials for HGVs.

This response expands on these key points and provides views on themes relevant to the questions raised in the inquiry and on which National Grid has an interest.

Response to questions – National and regional issues

29. What are the challenges or concerns around grid capacity in relation to significantly increased EV adoption?

Networks are a critical enabler of the net zero transition, and in the context of EV adoption, National Grid’s role, as both Distribution Network Operator (DNO) and Transmission Operator (TO), is broadly two-fold. As a DNO, we maintain, operate and invest in the distribution network. National Grid Electricity Distribution (NGED) facilitates connections to the electricity system for the majority of EV chargers in our service area, connecting other supplies and upgrading the network where required. Separately, but interlinked, as a TO, National Grid Electricity Transmission (NGET) also plays a crucial role in ensuring the roll out of EV charging infrastructure, by connecting and reinforcing rapid charging on motorways and across the strategic road network, but also by connecting new sources of clean generation (e.g., solar and wind), and, increasingly, demand (e.g. data centres and gigafactories).

In order to meet the pace and scale of infrastructure development that is required, we need a collective shift in mindset around how we do things to meet those demands. Delivering a decarbonised power system by 2035 will require a fundamental upgrade of GB’s electricity grid – at a pace and scale not seen for generations. For example, in order to achieve government’s ambition for 50GW of offshore wind by 2030, NGET will need to build over five times more transmission lines in the next seven years than we have built in the last 30 years.

Separately, while we’ve already made good progress in the area of EVs, connecting more chargers to our network in the last two years (over 66,000 to NGED’s network) than in all previous years combined, we know that the rate of EV growth that is coming down the track is significant, with an estimated 23 times more EVs expected to on our distribution network by 2035 than there are today.

NGET is continuously innovating and developing agile solutions in order to continue to run one of the world’s most reliable transmission networks, connecting 11GW of new domestic generation and interconnectors over the last 5 years. NGED, meanwhile, will deliver significant network investment between 2023-28 and beyond to meet the requirements of the energy transition, including readiness for up to 1.5 million additional electric vehicles and 600,000 heat pumps.

Progress has been made to transition towards a more strategic approach to network build, but important reforms are still needed across several key areas, particularly with regards to planning and consenting and regulation.

Looking ahead, we believe the priority actions needed to ensure the networks can play their full role in the energy transition are as follows:

Planning and consenting

Reform the planning system, while ensuring that communities benefit from hosting energy infrastructure. Planning and consenting is a major barrier to speeding up the delivery of network infrastructure, and reforms are required. There is a need to finalise the energy National Policy Statements (NPS), streamline the consenting process for major energy projects, and evolve towards a more strategic and holistic approach by establishing a Strategic Spatial Energy Plan (SSEP) to set out what needs to be built where and when, as recommended by the Networks Commissioner. We therefore welcomed the Prime Minister’s commitment to introducing such a plan, announced on 20th September, alongside other reforms to the planning system. At the same time, it is critical that communities can benefit from hosting critical network infrastructure, and we welcome the government’s intention to introduce a clear community benefits framework.

Regulatory reform

Ensure the regulatory and governance framework is set up so that networks can deliver at the speed required. The way in which networks are governed and regulated needs to evolve to reflect the fundamental change that is required, building on the welcome progress by Ofgem and government. Introducing a new, independent Future System Operator[2] to deliver a strategic planning function across the energy system is a welcome step, and represents an opportunity to ensure objectives, roles and responsibilities are clear – for individual institutions and how they should interact – and reflect the priority of delivering net zero. Furthermore, we need a regulatory framework which attracts the private capital to deliver the scale of network investment required and enables networks to invest ahead of need. Ofgem’s model for Accelerated Strategic Transmission Investment (ASTI)[3], which approved future-looking network expansion outside of the existing regulatory cycle, provides a good basis for this going forward.

In addition to evolving how the grid is planned at a national, regional and local level, it is important to think more broadly about innovations that will benefit consumers. Innovations in demand management and flexibility are a complementary alternative to network reinforcement, helping to reduce costs and improve energy security at a system-wide level, while also supporting cost savings for individual households. For example, the successful management of network flexibility will allow NGED to unlock the equivalent capacity of £95m reinforcement works throughout the price control period, RIIO ED2 (2023-28). In addition, use of Smart Charging – using chargers which can communicate with each other, your car, and the grid – to help balance the grid and integrate renewable generation efficiently, will play an important role.

30. What is the role of distribution network operators in ensuring EV infrastructure can be rolled out sufficiently to meet 2030 target?

We note the Prime Minister’s recent announcement on 20th September, which signalled the Government’s intention to push back the ban on buying new petrol and diesel cars to 2035. However, we will see an increasing number of EVs by 2030, which means that the need to upgrade and expand grid infrastructure to meet this demand still remains.

Given their interlinked nature, National Grid’s response to this question will cover the role of both DNOs and TOs in ensuring the roll out of EV infrastructure.

Specifically, there is an urgent need to reform the arrangements to connect both new clean generation and demand projects to the electricity networks to deliver connections for customers within timescales that suit their needs, facilitate the delivery of net zero and drive value for consumers. Whilst the current rules have served the industry well historically, they are no longer effective in delivering connections in a timely manner.

The challenge is three-fold:

• Firstly, there is an unconstrained market for connection applications driven by a first-come, first-served process. This drives behaviour for developers to apply simply to secure their place in the pipeline regardless of the maturity of their project.
• Secondly, there is a lack of contractual obligations on developers to demonstrate the progress of their projects, meaning they can ‘block’ other projects in the pipeline from progressing. 
• Thirdly, existing arrangements mean that the physical infrastructure required to support new connections – e.g., the substation bays and overhead lines – are linked to specific capacity requirements of contracted customers.

Change is already underway, with the Electricity System Operator (ESO) publishing a consultation on connection reform[4] following its five-point plan for reform[5]. The Energy Networks Association has also produced a three-point connections action plan[6]. While NGET and NGED are committed to this connections reform, we are also taking action to improve the processes at a national and local level (see below).

NGED has already delivered changes to simplify connections for customers. These include:

1. Our new automated online tool for domestic EV connections means that applications always get a response instantly (compared to 24-48 hours in 2021/22) with any remedial works taking place following the installation.
2. Our budget estimating tool, ConnectLite, gives customers an instant estimate for their low voltage connection, providing the information upfront so they can get connected quicker.
3. Adopting an innovative new ‘virtual inspection’ tool for connections that require a site visit, which enables our engineers to assess sites remotely, at a time that suits the customer.

NGED also recently released 10GW capacity for the connection of shovel ready renewable energy assets in the NGED region, through collaboration with ESO and through working with customers to develop new, non-firm commercial agreements. This will have the effect of accelerating connections, meaning customers won't need to wait for reinforcement.

For NGET, the connections pipeline doubled in a two-year period, and the volume of clean generation capacity in the pipeline is far greater than is needed under any credible future energy scenario. Within NGET there are several actions which we expect to unlock over 40GW of capacity and start to have an impact in the next 6 months. These include:

1. Collaborating with our Distribution Network Operator (DNO) colleagues at the boundaries to help accelerate connection dates at the distribution level.
2. Updating how we connect battery storage, recognising that the way/timings in which batteries store and then return electricity from the grid complements renewables.
3. Utilising a temporary measure of presenting provisional connections offers prior to a confirmed connections offer and using the time in between to assess the system as a whole in order to optimise decision-making.
4. Supporting a Transmission Entry Capacity (TEC) Amnesty which encouraged customers to retract their application to connect at little or no cost.

More fundamental reform through key actions by Government, Ofgem, ESO, network owners and wider industry is also needed to deliver a quicker and more coordinated approach to connecting clean energy to the grid. This includes action to:

• De-couple network design from customer applications and invest ahead of need. The regulatory framework could enable a different approach whereby capacity could be delivered strategically and ahead of need. This could support the creation of capacity hubs and provide customers with sight of planned capacity ahead of their applications to inform their investment decisions.
• Create a ‘plug & play’ connections product. NGET is looking to develop a new standardised modular connection product for customers, enabling a process which has flexibility in how capacity is re-allocated.
• Create a need for developers to demonstrate viability before entering the connections process. There are currently very low barriers to entry for customers applying to connect to the grid. We therefore believe there needs to be demonstration that a project is viable before applying to connect. 
• Move towards a ‘connect or move’ framework whereby milestones are applied to projects and if milestones are missed, grid capacity is reallocated to other projects which are progressing.
• Create a fast-track connection route for critical and strategically important net zero projects, prioritising projects where the economic value could be greatest.

These reforms would allow for networks to invest strategically, ensuring the network is ‘connection ready’ for customers to connect at pace. It would also ensure more efficient planning of outages and supply chain requirements, delivering a better proposition for customers and consumers.

We welcomed the Prime Minister’s commitment to explore a “ready first will connect first” approach to new connections, announced on 20th September, and we look forward to seeing the detail on this.

32. What are the issues facing rural residents, urban residents, and sub-urban residents and how do they differ?

From an energy network perspective, the points in our response to Question 29 are relevant. To ensure equitable access to EV charging across the country it is necessary to support charge point operators to overcome this issue. For example, it is crucial that there is a consistent network of rapid chargers across the motorway and strategic A-road network, to allow longer journeys to be easily completed. To this end, the Rapid Charge Fund (RCF) is a key policy which needs to be delivered at pace, where National Grid, and other network companies, will deliver connections to support up to 6,000 rapid chargers across the motorway strategic road network.

33. What role do you see local authorities playing in the delivering the 2030 phase out target, particularly in relation to planning regulations, charge points and working with District Network Operators? How can government best support local authorities in their roles?

We support the evolution of the approach towards developing the grid to enable delivery of upgrades at the scale and pace required to meet our net zero and related targets. We recognise progress in this area at a national level, however, it is equally important to consider how the grid will develop regionally. With a network that spans 25% of the UK, NGED is working with 121 local authorities across diverse rural and urban areas, providing bespoke support and guidance to regional stakeholder groups in the development of their Local Area Energy Plans (LAEP). Our approach incorporates forecasting and planning as well as local investment workshops, offering regional face-to-face surgeries for local authorities to discuss their plans in detail with the teams responsible for the planning, decision-making and delivery of our investment.

We support the development of Regional System Planners (RSPs), as proposed by Ofgem, which we believe will have an important role in the creation of a whole system energy plan. We support the RSPs, and other local stakeholders, playing a key role feeding into national-level network planning processes and holding sub-national accountability for developing a regional energy system plan. This plan should reflect local stakeholders’ plans, for example local authorities’ energy plans, and be able to integrate with other RSPs’ plans and the overall national plan, coordinated by the Future System Operator.