Great British Grid: What’s the point?

Prime Minister Andy Burnham made quite a speech at the Labour Conference in Liverpool yesterday, and one thing that really stood out was the creation of ‘Great British Grid’. It sounded like a new organisation that would take charge of Britain’s electricity network and fix many of the problems people seem to have with the existing network… and yet, it was anything but. 

There’s no major rewiring of the electricity system with the launch of GB Grid, if you pardon the pun. Instead existing transmission and distribution operators will keep their roles, NESO will continue to plan and operate the electricity system, and Ofgem will continue regulating the market. 

So, what’s the point of GB Grid?

Well, the UK Government is planning to use it as a way to get public money into building out electricity network infrastructure. It’s set to complement the existing private funding that goes into building out that infrastructure, and further extends what GB Energy is already investing in – it’s no longer about generation and storage anymore, it’s also about the actual transmission and distribution infrastructure that underpins our electricity system. 

That is a genuinely significant part of the Great British Grid announcement.

National Grid has already promised to invest roughly £40 billion over the five years to March 2031, and that’s just National Grid’s portion. There will also be funding coming from the various DNOs, IDNOs and now we’ll also have public money pouring in to improve the system. 

But do we need public funding? Ofgem is already working on opening up the transmission network to competition. 

In fact, the whole point of its Competitively Appointed Transmission Owner regime was to allow organisations other than incumbent transmission owners to bid to design, finance, build and operate certain new transmission assets. The creation of GB Grid doesn’t automatically create new competition then – it just creates a publicly-owned competitor to the private market. 

Competition is not entirely new at distribution level either. Independent network operators can already own and operate some connection infrastructure, with Gridserve recently becoming UK Power Networks’ first fully flexible demand customer connected through an IDNO.

The question then becomes – will that publicly-owned competitor be able to connect those in the queue quicker? 

Well, not necessarily. 

The Government is already expanding self-build connections so developers could just go and build its own infrastructure for a quicker connection rather than waiting for network companies to do everything – and it’s unlikely GB Grid will make the process any faster. 

Once again, this is something Ofgem is actively working towards – having set out its plans in June to make it easier for large demand customers to build and own high-voltage connection assets, or build them before transferring them to the network company. 

But then self-build does have its drawbacks – and this is where GB Grid could actually help. After all, building your connection faster doesn’t necessarily mean there is capacity on the grid for you to use it.

Some well-developed projects are already unable to connect quickly because they are waiting for wider network or generation infrastructure to be built. A business could therefore finish its own connection works and still be waiting for reinforcement somewhere further upstream.

In that scenario, GB Grid could target investment in these reinforcement works to help people get connected, while developers invest in self-building their actual connections. 

The proof will be in the pudding, however – and as with everything in life, the pudding requires a whole lot of money. 

The Government has confirmed that GB Grid’s initial start-up costs will come from Great British Energy’s existing budgets. That means the organisation’s budget is set to be stretched even further. It’s already investing in nuclear generation, renewables, and storage – and yet now the Government wants it to also invest in grid infrastructure. 

So, how much will it set aside for investing in that infrastructure? Well, we just don’t know. The Government has stated that GB Grid may get its own individual budget at a later stage, after a spending review, but again – it’s making lofty promises without answering a massive question. 

That’s caught the attention of Yselkla Farmer, CEO of electrotechnical manufacturing trade association BEAMA, who noted, “What we cannot afford is a protracted process or uncertainty over funding for grid development. Delivery has to be now to stimulate the structured growth the sector is planning for.”

She also warned against concentrating only on the transmission system.

“We understand the GB Grid proposal is focused on transmission connections, but investment is needed top to bottom. So, it is really important that we see investment from transmission through to distribution, to ensure that electrification can progress at the pace we need it to.”

That is an important challenge to the scope of the announcement.

New transmission infrastructure is essential for moving large volumes of electricity around the country, but much of the growth in electrical demand will ultimately appear deeper in the system. EV charging, heat pumps, industrial electrification, storage and new developments also require investment in local distribution networks.

For manufacturers, knowing where and when that spending is coming can determine whether they expand production before demand arrives.

That issue is already moving up the Government’s agenda. Electricity networks are being pushed to consider UK jobs, skills and manufacturing when they procure the cables, transformers, switchgear and substations needed for the network build-out.

Farmer added, “What is very helpful for manufacturers is having a clear view of upcoming investments. This visibility will help them plan when to invest in – both in new equipment and through recruitment. And, make early decisions that accelerate the path to electrification. Critically, it helps the industry avoid delaying decisions through uncertainty of demand.”

GB Grid is also arriving just as another government-backed attempt to tackle the delivery challenge is approaching publication.

Ofgem says the Electricity Networks Sector Growth Plan is due in October and has been developed with the Department for Energy Security and Net Zero, the Energy Networks Association, BEAMA and industry. It is intended to identify opportunities around electricity network infrastructure and address the supply chains, skills and investment needed to support the build-out.

That makes the question around Great British Grid more specific.

Britain already has connection reform under way. It already has a competitive transmission regime being developed. Network companies already have major investment programmes, while the Government, Ofgem and the wider industry are all separately working on the supply chain needed to deliver them.

What Great British Grid adds is a public investor and competitor sitting inside that existing system.

Whether that turns into meaningfully faster connections will depend on the details that are still missing: how much capital it eventually receives, which projects it can invest in, how quickly high-voltage self-build is opened up and whether transmission, distribution and the electrical supply chain can expand at the same pace.

Great British Grid is therefore not really a new grid.

It's a new attempt to put public money and another competitor behind building the grid Britain was already trying to deliver.