José Andres Visquert, Global Head of Grid at BayWa r.e.
When it comes to renewable energy, we have a huge opportunity, and significant progress has already been made. COP28 outlined the goal of tripling renewable energy capacity and transitioning away from fossil fuels, while COP29 agreed on a new climate finance goal. But to make the most of these opportunities, we must accelerate the growth of renewable energy.
Delays, however, are an ongoing problem facing the green energy transition – complicating one fundamental issue for getting clean energy to consumers: grid connection. 2025 must be the year where we address this issue and clear the path for green energy momentum.
The impact of grid connection delays
The shortage of grid connections and insufficient expansion of electricity grid infrastructure represent the final hurdle facing the realisation of renewable projects – but they are arguably the biggest ones. More than 500 GW of potential wind energy capacity in France, Germany, Italy, Spain, Poland, Romania, Ireland, Croatia and the UK are waiting for an assessment of their application for a grid connection.
In a UK study, 75% of market experts named achieving timely grid connections as their biggest hurdle to boosting clean power. This is a particular concern in the UK where solar and wind power is on course to account for just 44% of the nation’s electricity supply by 2030 – short of the 67% needed to hit net zero by that time. Unless grid connection delays are addressed, the UK government’s commitment to decarbonising the electricity system by 2030 looks unlikely.
The causes and solutions
A system not fit for purpose
Raising grid capacity and overcoming delays means doing a lot of things at the same time – and putting a lot of strain onto the system. This includes trying to incorporate renewables into outdated systems, while trying to get Distribution Network Operators (DNOs) and Transmission System Operators (TSOs) to invest in expansion. It also involves tedious permitting processes and complex financing mechanisms.
Furthermore, grid expansion is currently project driven: the network user applies for a grid connection, the system operator assesses the viability of the connection and finally determines the conditions and cost. Then the user waits until the grid connection is ready.
All this makes for a system that is not fit for purpose. But it can be by reducing complexity. Red tape around permitting must be reduced and dialogue must be improved with local stakeholders to increase acceptance and amplify the benefits of a streamlined system. Data access and transparency must also be improved. Grid flexibility should be boosted to accommodate more renewable energy – for example with the implementation of flexible connection agreements and deployment of more storage systems. Further, grid assets and systems must be digitalised and standardised.
Supply chain and resources
Global supply chain issues are continuing to affect the delivery of grid components such as transformers, cables and semiconductors – as well as steel, copper and other raw materials. This is creating bottlenecks across the supply chain and delays in connections.
Meanwhile, skilled labour shortages are also problematic – not only making resource planning difficult, but causing delays on the DNO/TSO side and impacting the availability of grid construction contractors that are already at full capacity.
Increased costs and curtailment rates
A lack of grid capacity is leading to increased costs and curtailment rates. With the increased demand placed on the grid and electricity supply, green energy projects end up being switched off and their energy production stopped when the grid is at capacity. However, this curtailment comes at a cost for system operators, with wind curtailment rates hitting a record high in 2024.
These rates make curtailment forecasts essential for developers and asset operators, as the amount of energy that can be sold to the grid is predictable. This way, they can avoid losing revenue and secure future investments by demonstrating the efficiency, financial viability and stability of their projects.
In the UK, there are debates about locational or zonal pricing, based on energy production and consumption. While the merits and drawbacks of this approach are heavily discussed, a much cheaper way of reducing costs and getting the flexibility benefits of interconnectors is to build the right amount of grid.
Connecting to our collective future
The challenges and solutions of grid connection delays may be varied, but ultimately they rely on the same thing: investment. The EU Commission estimates that €584bn is needed by 2030. And while monetary investment can’t come soon enough, governments, system operators, utilities and developers must invest their time and energy into simplifying grid processes so that there is as little friction for renewables projects as possible.
There is no transition without transmission. If we want to undertake the “Grid Great Revolution”, we need to see the grid from a holistic perspective and the only way is through anticipatory investments. In other words, we need to plan and build the grid well in advance, and more importantly, we need a grid that is aligned with national climate targets and market outlooks.
This article appeared in the Jan/Feb 2025 issue of Energy Manager magazine. Subscribe here.