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An investment of £4.7 billion is urgently needed to upgrade the UK’s national electricity grid to accommodate new renewable and nuclear power sources, according to a report from the Electricity Networks Strategy Group (ENSG).

If the UK is to meet its target of 15% renewable energy by 2020, around 30% of electricity generation will have to come from renewable sources.

Connecting up an additional 35 GW of renewable and 10 GW of nuclear power will need up to 1000 km of new cables – the single largest expansion of the grid since the 1960s.

“Having a grid which is fit for purpose is vital for our ambitions to cut carbon emissions and increase security of supply,” says Energy and Climate Change Minister Mike O’Brien.

“This is a massive long term investment opportunity and the upgrade work will help support jobs across the low carbon economy.”

The necessary investment, however, will not come from the Government. Instead, the country’s three transmission licencees, energy suppliers and their customers will have to pick up the bill.

Initially around £150 million will be needed for pre-construction work, with the remaining costs spread over the next decade, says the report.

Although the ENSG report concludes that there are no real technical barriers to bringing online new wind capacity, it does caution that the upgrade work needs to start right now to meet the 2020 deadline.

Crucial to getting work underway will be approval from energy regulator Ofgem for new investment in the grid. The regulator announced its own plans to approve funding for grid upgrades in January this year.

“Ofgem has been proactive in this area by approving major increases in investment in the electricity networks, including the £5 billion for network upgrades and renewal between 2007 and 2012,” commented chief executive Alistair Buchanan.

“We will continue to work with the industry to develop appropriate incentives to encourage efficient and effective innovation,” he added.

Environmental group Friends of the Earth has welcomed the report and is urging the Government to take action to ensure that the upgrade work goes ahead as soon as possible.

“Up to now the short-term attitude of Ofgem and lack of strategic thinking have stood in the way of the massive expansion of renewable energy,” says executive director Andy Atkins.

“This report indicates that the power industry is ready to play its part in a low carbon future – the Government must now show that it has the bold political vision to make it a reality.”

For further information:
www.ensg.gov.uk
www.ensg.gov.uk/assets/1696-01-ensg_vision2020.pdf
www.ofgem.gov.uk/Pages/OfgemHome.aspx
www.foe.co.uk/

Related stories:
Ofgem proposes grid overhaul to boost renewables (5-Jan 2009)