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Let’s Make A Connection

Let’s Make A Connection

Peter Ward

There are many elements involved in bringing a new development from conception to occupation, and several of the most crucial steps often go on ‘behind the scenes’.  One such step is connecting your new development to the electricity grid - perhaps not the most stimulating part of the construction programme, but without it the lights simply don’t come on.  Today (30th October 2015) however will see this essential milestone undergo some big changes.

Hundreds of thousands of new grid connections are made in the UK every year, which are mostly carried out by the applicable Distribution Network Operator (‘DNO’) in that region of the country (here in Scotland the DNO is either Scottish Power Energy Networks (in the south) or Scottish Hydro Electric Power Distribution (in the north)). Whilst there are some independent engineers in the market who can facilitate connections, they themselves are in large part dependent on the DNO providing them with certain key information, and the DNO still has exclusive supply on several steps of the process. This presents frustrating challenges to the construction industry (especially in the renewables market) such as a lack of competition in pricing some aspects of local connections and a very real bottleneck caused by waiting for the applicable DNO to respond to an independent engineer’s requests for information.

As of today however, Ofgem puts into effect a new Code of Practice for the DNO’s which seeks to address these issues by opening up the local connection market more fully to independent engineers. The most crucial changes for the DNO’s in this Code of Practice are:

Supply of information – DNO’s must now provide information to independent engineers in a ‘timely fashion’ and must share all the information which they would themselves use when making a local connection.  Sanctions have been threatened by Ofgem against any DNO who is seen to be dragging their feet in providing this key information promptly. Turnaround times should now be faster, and the end client will also have more influence over the physical location of the connection (one of the areas which the DNO has until now enjoyed sole discretion over).

Inspection of connections – DNO’s are still required to inspect all connections in their area, and so are now are required to have in place an inspection and audit regime which treats their own connections and those completed by independent engineers in exactly the same way.

Accreditation of engineers – to avoid regional fragmentation of the new rules all the DNO’s are now required to recognise each others certification schemes, such that an engineer certified as competent by one DNO is now deemed to be competent by all DNO’s without the need for taking any further courses or assessments.

The clear intention of Ofgem in issuing the new Code of Practice is to introduce competition into a section of the electricity market in which this has been sorely lacking. With the general economic recovery in full swing and the increasingly urgent demand for new housing stock (both in Scotland and the UK in general), the new options available to developers and contractors are sure to be welcome. Savvy engineers will no doubt quickly capitalise on this new market, and developers and contractors alike should now be looking to their supply chains to identify alternative routes to achieving their required local connections, which may be faster or cheaper than dealing with the applicable DNO and having the DNO undertake both the contestable and non-contestable connection works. In the not-too-distant-future an in-house connections capability may even be something worth considering, especially to the volume house builder.

“Succeeding in business is all about making connections”, said Sir Richard Branson in a 2013 interview for a Virgin Entrepreneur blog. Whilst he may have been speaking specifically about finding an engineer to build him a spaceship, his words are equally true of the kind of connections which Ofgem are concerned with.

Peter Ward
Senior Associate

Samuel Moore
Solicitor

LChalmers