GB Grid brings £4bn to a £70bn problem. Expect bureaucracy, confusion, and delays.

chris16485

3 hours ago

3 min read

The sensible thing for me to do is wait for the facts. That's never stopped me ranting before...

Pre-speech briefings show a £4bn state body inside a £70bn grid build. It speeds connections only if self-build rights arrive. Ports, SMR sponsors, data-centre developers and BESS investors: read on.

The 30-second version

•Ports: positive, medium. Self-build rights could let ports fund their own connections.

•SMR: neutral, medium. Wylfa predates GB Grid; the risk is a shared GB Energy budget that dilutes other areas where your project is.

•Data centres: positive, medium. Self-build beats queueing, but Ofgem currently proposes £237,500–£712,500 per MW commitment fee at risk

•BESS: negative, medium. 90GW queued or operating against 29GW needed by 2035.

•Bills: negative near term, medium. Cap up 4% on 1 October (Ofgem, 26 Aug); “buy British” premium unquantified.

What was announced

Burnham speaks on Tuesday afternoon in Liverpool (BBC, 28 Sep). Nothing below is delivered text:

a public body inside GB Energy, the first public network player since privatisation (ITV, 29 Sep).
competes for transmission projects (how?) and co-invests in business self-build connections (Daily Business, 28 Sep).
funded from GB Energy’s budget; £4bn accessible, “not expected to use all” (Independent, 29 Sep).
Target: European-level energy costs in 10 years (Energy Live News, 29 Sep).
Self-build cut Irish connection times by 11 months (Guardian, 28 Sep).
Not published: legislation, launch date, governance.
Energy UK’s Dhara Vyas: investment welcome, but “the bulk of this will be private investment” (BBC, 28 Sep).

Ofgem: a neutered referee

Gas was privatised in 1986, electricity in 1989. The leash has since slackened. Ofgem has refused to engage with e.g. NESO before the grid queue became intolerable. Ofgem has allowed grid congestion to pay curtailment costs to Scottish generators and has funded out-of-merit gas stations in the south. The Great Grid Upgrade (The Great Grid Upgrade | Powering The Things You Love) drags on. The point is that the Government should be leaning on the MARKET regulator to do its job. But that never won an election.....

Market reaction

Pre-speech, so attribution to GB Grid is unconfirmed. Quotes at 09:32 BST, 29 Sep

•National Grid, 1,116.5p: today −0.98% against FTSE 100 +0.17% and utilities basket −0.72%. Five days −2.96% against −0.05% and −2.49%.

•SSE (SSEN proxy), 2,430p: today −1.14%; five days −1.58%.

•Iberdrola (ScottishPower proxy, 09:16 BST), €20.47: today +0.64%; five days +0.49%.

Queue reform, Great Grid Upgrade and AR8

Verdict: bureaucracy first, capacity later. Delivery takes 12–14 years against a seven-year target (NAO, 11 Sep). A new owner shortens neither.

Queue reform: positive, medium. Capacity needs Ofgem’s independent transmission owner licence, consulting this autumn (Burges Salmon, 6 Jul). Unknown: terms.
Great Grid Upgrade and RAB: neutral, medium. Up to £70bn to 2031; annual spend must rise from £2.5bn to over £11bn (NAO). Unknown: RAB return or grant for GB Grid.
Offshore wind and AR8: neutral, low. Results may slip to early 2027 (TGS, 10 Aug). Unknown: offshore transmission role.

What it means for Ports

•Direction: positive. Confidence: medium.

•Mechanism: self-build rights let a port fund its own high-voltage connection; GB Grid co-invests (briefed).

•Evidence: Port Talbot gets £64m to unlock at least 4.5GW of floating wind (DESNZ, 26 Mar). SSE chose Montrose for a 1.4GW O&M base (SSE, 28 Sep).

Winners: ports with anchor tenants, capital and expertise. Losers: ports waiting in the network queue.
Unknown: whether self-build covers electrification and marshalling loads.
Action this quarter: cost a self-build option for your largest load.

What it means for SMR OEMs and sponsors

•Direction: neutral. Confidence: medium.

•Mechanism: Rolls-Royce SMR’s three-unit Wylfa contract dates from 13 April; FID is expected in 2029 (World Nuclear News, 13 Apr). GB Grid moves neither.

•Risk: GB Grid’s £4bn sits inside GB Energy’s £8.3bn, of which £2.5bn is nuclear-earmarked (Politico, 28 Sep).

•Winner: Rolls-Royce SMR, already contracted. Others wait.

•Unknown: whether second-wave sponsors face less uncommitted money.

•Action this quarter: ask DESNZ for the GB Energy allocation split.

What it means for data-centre developers and investors

•Direction: positive. Confidence: medium.

•Mechanism: self-build plus co-investment bypasses the queue for those with capital.

•Cost: Ofgem proposes £237,500–£712,500 per MW, refundable at energisation; 73GW is queued (Ofgem, 29 Jul). On 100MW, £23.75m–£71.25m at risk subject ot the ongoing consultation.

•Winners: funded, equipment-ready sites. Losers: speculative land banks.

•Unknown: GB Grid co-investment terms.

•Action this quarter: secure long-lead equipment contracts to meet Ofgem’s proposed milestones.

What it means for BESS developers and investors

•Direction: negative. Confidence: medium.

•Mechanism: 90GW is operating or queued against 29GW needed by 2035 (Ofgem, 17 Sep). Faster connections for needed projects leave surplus storage behind.

•Cost: proposed fee £3,000–£25,000 per MW; £0.3m–£2.5m on 100MW. Responses close 1 October (Ofgem CMP470).