03 August 2021

Regulatory Pathways to Deliver NetZero


James Jackson is a Regulatory Advisor with Ørsted. He’s worked for Ørsted since August 2020 and specialises in policy and regulation relating to renewable energy, offshore transmission, energy storage, and innovative technologies.

He leads Ørsted’s activities to enable the co-location of technologies with offshore wind, and is the regulatory interface to the Gigastack project.

In 2019, The Offshore Wind Sector Deal set out an ambitious partnership between Government and industry to build on the UK’s position as a global leader. As part of the deal, the Department for Business, Energy Industrial Strategy (BEIS) initiated several workstreams to understand whether the design of the UK energy market was fit to deliver 30GW of offshore wind by 2030 (since updated to 40GW), and in excess of 50GW by 2050.

One of these workstreams is the Offshore Transmission Network Review (OTNR). The OTNR is a BEIS led review into the way that the offshore transmission network is designed and delivered, consistent with the ambition to deliver net zero emissions by 2050. The review itself is divided into four key workstreams:

  • “Early Opportunities” to benefit consumers and the energy system.
  • “Pathways to 2030” which will bring forward a holistic plan-led approach to connections.
  • Looking further ahead, the development of an “Enduring Regime” for connections post-2030.
  • “Multi-purpose Interconnectors” which could facilitate international coordination.

The workstream is being developed in parallel with National Grid Electricity System Operator’s Offshore Coordination Project and Ofgem’s Interconnector Policy Review.

As part of the first OTNR workstream (“Early Opportunities”) developers were asked to bring forward “Pathfinder” projects. These projects are typically existing, in-flight, developments – with connection dates between 2025 and 2030 – that have the potential to move towards a more coordinated approach. The Pathfinder process gives developers the opportunity to engage with UK Government, Ofgem, National Grid ESO and others to explore delivery challenges, and examine potential solutions to enable coordination.

As a result, Ørsted proposed Gigastack as a Pathfinder project with a view to investigating how non-offshore generator assets, such as hydrogen electrolysers, could be connected to onshore transmission assets that would normally be owned by Offshore Transmission Operators (OFTOs). The purpose of the OFTO is to connect offshore generation to the onshore transmission system – this therefore introduces a complexity if a developer wishes to connect an additional asset, that is physically located on land, into OFTO infrastructure.

Whilst the OFTO regime has been beneficial to the build out of offshore wind, some modification will be needed to enable the connection of co-located assets. This will allow renewable hydrogen to be produced closer to the source of electricity generation, without first entering the transmission system and downstream distribution networks. This configuration has many benefits, such as:

  • Maximising the flow of renewable energy to the electrolyser, and in doing so making the most of a clean energy source.
  • Aiding with energy balancing and ensuring the network is used efficiently; and
  • Allowing for better utilisation of both generation and OFTO infrastructure.

Through the pathfinder process, Ørsted is working in collaboration with National Grid ESO – and other parties – to address the regulatory issues associated with co-location and allow developers to use the optimum configuration of assets. The complexities are not necessarily company or project specific, and as such can be applied to any development looking to co-locate assets alongside OFTO infrastructure. In addition, there’s scope to address other barriers, such as the treatment of network charges for using the transmission system (ensuring that co-located assets pay a fair and proportionate price on electricity imports).