Gonna get myself connected: Upgrading the UK’s power grid

With the UK's electricity grid urgently in need of upgrading to achieve the government's target of becoming net zero by 2050, subsurface infrastructure expert Emily Tetley-Jones considers the issues facing cable operators, whose new infrastructure will typically need new rights to cross existing assets.

Global power consumption will almost double by 2050 according to global consultancy McKinsey, with half of global energy being sourced from renewables by 2036.

Estimates of what the global electricity demand might be vary wildly, however it is worth considering that Europe alone is set to require an additional 150 gigawatts of electricity by 2050 just to service the predicted rise of electric cars and car chargers.

Efforts to move domestic homes and industrial buildings off fossil fuel-generated energy and onto low carbon electrical alternatives (which can easily double electrical consumption), coupled with the development of energy-intensive commercial sites such as data centres (Dublin, Frankfurt, London and Amsterdam are all expected to exceed 1,000MW (1GW) of data centre capacity before 2023), are driving up electricity consumption at an exponential rate.  

Between 2009 and 2021, the cumulative installed capacity of offshore wind power in the UK rose from 951 megawatts to a peak of 11,255 megawatts. The government wants to make that 50 gigawatts by the end of the decade, with 5GW to come from floating platforms in deeper seas off the UK coast.

A greater reliance on renewables means an increased and immediate need to store and release energy quickly to make up for fluctuations in production and demand.

This in turn requires the expansion of battery storage sites (BESS), together with other initiatives such as the proposed SSE hydro-electric power project at Coire Glas in Scotland.

Over £32 million of government funding was awarded in 2022 to UK projects developing innovative technologies that can store energy as heat, electricity or as a low-carbon energy carrier like hydrogen.

These new sources of production and storage mean that the UK power grid requires a significant upgrade to its outdated network, as the current infrastructure is simply not capable of managing the loads required today, let alone in the next 10+ years.

This explains why 600 renewable energy projects with a combined capacity of 176GW are waiting for a grid connection in England and Wales, according to National Grid.
National Grid says it has historically had 40-50 applications per year for connections, but this has risen to about 600 per year, thanks to the proliferation of renewable energy generation projects looking to come online.

This is on top of significant numbers of applications to regional distribution network operators (DNOs), creating major logjams as rights to lay connecting cables are negotiated.
With this in mind, the government published a consultation in August 2022 seeking views on the existing system of land rights and consents for building new electricity network infrastructure for smaller scale projects that are not covered by the Planning Act 2008.

In that consultation, it sought views on further reforms to the regime for granting wayleaves, necessary wayleaves and compulsory purchase for these network projects.
While we wait to see what the outcome of that consultation is, developers and network operators (along with the affected landowners) are left to make sense of the existing consenting regime.

Laying a high-capacity electricity cable through the UK's maze of existing cables, pipelines and other subsurface infrastructure is not a simple process (particularly where these are not being laid pursuant to large-scale compulsory rights' type schemes).

As these cables run underground, for many project managers, out of sight means out of mind until the very end of the project, when time for negotiating how a cable will get from A to B (where no automatic powers exist) is limited.

The clash between new, large-scale electricity schemes and (for example) the thousands of kilometres of subsurface multi-product fuel lines within the UK (which connect the receiving, processing and storage terminals with end-users such as airports) are set to get more and more frequent in the short to medium term.
How are pipeline crossings negotiated?

Large-scale projects can be consented pursuant to or by way of either a Compulsory Purchase Order of a Compulsory Rights Order, or as part of a Development Consent Order such as an NSIP (a Nationally Significant Infrastructure Project) pursuant to the Planning Acts 2008.

Smaller scale electricity cable installation projects are often more tricky. Cables may be installed under highway land pursuant to statutory powers available under NRSWA 1991, which is by far the simplest way for operators to obtain the necessary rights. However, wider rights will often be needed to connect the project to the grid or the end-user.

Where highways' rights are not sufficient, DNOs are able to apply to the secretary of state to obtain so-called "necessary wayleaves" from landowners. However, this process is cumbersome, costly and results only in personal rights, which do not bind the land.

Incoming purchasers can apply to terminate the rights (which in turn means the need to apply for a further compulsory wayleave). It is also open to the affected party to object to the scheme and/or claim compensation for any detriment caused. As such, therefore, it is not a 'magic wand' solution.

Operators seeking to lay new electricity cables without exercising compulsory powers will look to obtain leases or easements to put and keep the cables in place.

In some circumstances, this will mean negotiating with pipeline operators or owners of other large, high-value, regulated subsurface infrastructure, who (like the cable operators) are subject to their own raft of statutory and regulatory requirements and (crucially) have land rights that allow them to exclude third parties without consent due to health and safety reasons.

Electricity providers have a statutory obligation to maintain supply and to repair any faults without delay. This means they will want unrestricted access to their assets to meet these obligations.

However, this can significantly conflict with operators of subsurface fuel lines’ own safety requirements and regulatory regime, and they will typically also need 24/7/365 access to their assets for operational and safety reasons.

Owners of infrastructure being crossed will therefore want to ensure that they are indemnified for any damage caused to their infrastructure by the crossing entity.

Typically, responsibility for these negotiations falls to the project managers, the developers or promoters of the site that requires the connection, on the basis that once the cables have been installed the relevant DNO will generally adopt that asset (i.e., take on responsibility for operating it).

These project owners will usually have a lease and a mandate to install the asset from the surface landowner (albeit not necessarily from any subsoil interest holder). This puts project developers in the unenviable position of negotiating land rights between the owners of the land or the subsurface infrastructure that needs to be crossed, and the DNO who needs to secure the land rights going forward.

What are the potential complications?

The complexity of negotiating crossing agreements partly depends on what type of assets a cable needs to cross and who owns them.

The more critical, risky and/or valuable or dangerous a subsurface asset is and/or the more complex the statutory or regulatory requirements are that attach to it, the more difficult the interrelationship between the owners of the cable and asset that needs to be crossed will be.

In these instances, the parties will need to drill down into what the underlying deeds/land rights stipulate and negotiate crossing rights on a case-by-case basis. This can be a tricky process where parties need to be open to engaging with the practical and safety requirements relevant to both assets.

On a practical note, the majority of the UK’s subsurface infrastructure is controlled by a relatively small number of entities, and parties are therefore at an advantage if (a) sufficient time is factored in to deal with such matters, and (b) the law firm they instruct is used to dealing with these matters and parties on a regular basis.

What next?

There is unarguably a pressing need to upgrade the UK's electricity network if the country it is to decarbonise its energy supply as part of a net zero emissions future.

It is hoped that the government consultation referred to above will result in a clear roadmap as to how such rights can be more easily facilitated with less delay.

However, we also hope that any such strategy will properly address the needs for certain asset holders to properly safeguard the safety and security of their own assets.

This article was authored by Emily Tetley-Jones, real estate director and subsurface infrastructure specialist at Fieldfisher. It was first published by Estates Gazette (EG) on 20 June 2023.