Power Struggle: Delivering Great Britain’s Electricity Grid Infrastructure (Industry and Regulators Committee Report)

Lord Teverson Excerpts

Tuesday 4th November 2025 Grand Committee

[Lord Teverson (LD)]

My Lords, I declare my interests: I chair a battery storage company called Aldustria Ltd and I am a trustee of Regen, a not for profit that promotes renewable energy. I will concentrate on grid connections within this report, and I will not go into the other areas much.

I want to go through a bit of history. In the area of grid connections, the previous Government absolutely sleepwalked into a crisis—and Parliament as a whole did, as well. Parliamentarians became aware of it a bit before the Government did. In terms of Ofgem being driven by keeping costs low for consumers, as opposed to investment in the future, that really stayed there until ASTI—I had to look up again what it was: accelerated strategic transmission investment—came in in December 2022, not very long ago. Even then, it took time to implement.

Then we had the Energy Act 2023, which tried to solve a lot of those other things to do with connections, and wider things as well. That piece of legislation was introduced in July 2022 and did not come out at the other end—I was Front-Bench spokesperson at the time for the Lib Dems—until October 2023. It was seen as an important and urgent strategic bit of business, yet it took one and a quarter years to get through Parliament after a long pause in the middle.

The irony is, of course, that, although we had many years of Ofgem promoting low bills, as opposed to investment for the future, we still ended up with lousy grid connections, a grid that is not fit for purpose and the highest energy prices in Europe. So something is certainly wrong.

There is one thing I would like the Minister to explain to me, because nobody has ever managed to explain it to me. Why do we need to pay extra money to transmission networks for investing in their own business? I do not understand. If any other private sector business invests, it does not charge for that investment in terms of pricing. In fact, we expect it to take advantage of economies of scale, with rising demand, as we have with electricity, and efficiencies. Take something like EasyJet. If, with rising demand, it invests in new planes, does that mean we see on its website that it is going to raise prices by 10% for its new aeroplanes? Of course not. It is around efficiency and economies of scale: the price goes down, not up. If the Minister can explain that to me in five seconds, that would be great, because there is something fundamentally wrong here in the way that Ofgem works.

It is not just grid connections to generators. I remember very much one of the pieces of witness that we had. I asked, “Isn’t there a problem? Housebuilding in west London has come partly to a halt because of lack of connections”. The witness actually denied that, but I have spoken to the sector since, and if you google it or whatever, you will find that it is the case. This is an issue not just around generation but also in terms of housebuilding targets.

So grid reform is absolutely needed and is being done quickly at the moment. As our chair rightly said, we have moved on from first come, first served, with a hugely long list of projects, some of which have been identified as “zombie projects” that did not exist and that we want to take out. What we are moving to is those that are shovel-ready and conform with CP30. I did actually check what CP30 was. I was sure it was clean power 2030, but I googled it to make sure and it came up with C-3PO or whatever it was from “Star Wars”. Anyway, it was around the future. But that is to the side.

Anyway, we have changed that, and that is absolutely right. The difficulty has not been the fault of NESO at all: it was only established almost exactly a year ago, in October last year, and it immediately had, among its other responsibilities, re-queueing this huge tail in terms of grid connections. Quite frankly, it strained in that task, and I will come back later to a number of questions for the Minister to see how we can get round that.

There is no doubt that NESO has been working hard and wants to do this. There were problems over the portal that put back its programme by a couple of months, but the timetable has been extended and there is genuinely a lack of investor confidence in the way that that is now rolling out and a lot of uncertainty in terms of those timetables. So that lack of confidence is a crisis there at the moment, and that will affect the investment that makes it so important, as our chair said, to be able to reach those CP30 targets. So, at the moment, those delays in connections with regard to the reform process are leading to a slowdown in clean energy projects being developed.

I have some specific questions to the Minister about that, around the future of making it work. They are not detailed but are substrategic, so I will be very happy if he wants to come back later on. My questions are: how will the Government, together with Ofgem and NESO, give enough confidence to the developers’ projects that are due to connect in 2026-27, so that they can actually place firm orders with their supply chains and start building those projects out? That is the only way they can meet their connection deadlines, because, if you miss deadlines, you go back to start again, which means a loss of time and more uncertainty. It is absolutely right to put those gateways down there in terms of planning permission, your supply chain and land acquisition or whatever, but if you do not meet them, you go back to the beginning.

Will the Government ensure that developers have the opportunity to agree viable gate 2 milestones with networks pre offer to take account of the impact of delay on project timetables in the connections reform process? Lastly—this is key in terms of the future, exactly as our chair said, looking forward not just to the next couple of years but to 2030—when will the next gate 2 connections application window be opened? This is really important, so that there is a path for projects that do not meet gate 2 in this first window. We seriously risk developers having no development route and just walking away. So it is all around making that really important reform that is being made work—dare I say work at pace—but making sure that we know, for those that have not got to gateway 2 now, that they are able to do that for the future, so that we can achieve the net-zero grid that is so important.