Ofgem commits to central role in grid connection reform

Ofgem has committed to taking a central role in driving progress on the reform of grid connection arrangements, according to the Welsh Government's draft Heat Strategy for Wales, which records the commitment as made in May 2023¹.

The draft strategy, published for consultation, sets out the Welsh Government's intended path to net zero heat in Wales by 2050 across all sectors¹. It states that heat accounts for approximately 50% of total energy use in Wales, three-quarters of which comes from the combustion of fossil fuels¹. Total renewable heat capacity in Wales is given as 686MW, providing 2.3TWh of mostly biomass heat, which the strategy says equates to 4% of the roughly 53.4TWh of heat energy used per year in Wales¹.

On grid connections, the strategy records the Ofgem commitment in the context of transforming energy networks, one of its enabling framework sections¹. The document does not set out what the commitment involves in operational terms, and no further detail on the scope, timetable or specific connection reforms is given in the pages reviewed¹.

The strategy also sets out related policies and dates:

The strategy states that as of 1 April 2023 it is against the law to let or rent out a property without a minimum EPC rating of E, rising to C in 2028 and B in 2031¹. It says the UK Low-Carbon Heat Scheme is expected to launch in 2024, obliging fossil fuel heat suppliers to scale up manufacture of low carbon heat technologies¹. It also records that £20m has been made available to support local authorities in 2023/24, and that Project Equinox, which ran its first trials in early 2023, is testing commercial models for domestic flexibility from heat pumps¹.

"In May 2023, Ofgem committed to taking a central role in driving progress on the reform of grid connection arrangements."

Why it matters for households

Grid connection arrangements determine how quickly new generation, storage and network capacity can be brought on to the system, and therefore how far the electricity a home draws can come from sources connected in its area. A commitment from Ofgem to a central role in reform is a statement about who drives that process, not a change to connection terms or timescales in itself. The grid connection queue is the practical expression of those arrangements for anyone watching how supply capacity reaches their region.

For a household, the nearer-term items in the strategy are the ones with direct effect. The EPC requirements for rented property are already in force at rating E, with C and B dates set for 2028 and 2031¹. The UK Low-Carbon Heat Scheme, expected in 2024, is framed as an obligation on fossil fuel heat suppliers rather than on households¹. The strategy notes that Wales has some of the lowest energy efficiency ratings in Europe and a significant number of properties off the gas grid, and that the most recent energy crisis is estimated to have put 45% of Welsh households at risk of fuel poverty¹.

The strategy also states that the Welsh Government alone does not have the resources to fund everything necessary, and calls on industry, civic society and the third sector to help deliver the action needed¹. It records that over 100,000 Welsh workers will be impacted by the transition to a net zero industry¹.

What happens next

The strategy is a draft for consultation, and the document sets out next steps covering an enabling framework, action planning, and monitoring and evaluation¹. It states that the Welsh Government is supporting the development of Local Area Energy Plans across the whole of Wales by 2024, and that outcomes from neighbourhood and village hydrogen heating trials will feed into the government's decision on hydrogen heating in 2026¹. No date has been reported for the conclusion of the consultation or for publication of a final strategy.

Sources1 cited

1. Heat Strategy for Wales, gov.wales