Speculative connections bids: Everybody loses

Hugh Taylor: Spray and pray grid applications hurting industry

Roadnight Taylor CEO Hugh Taylor says unscrupulous behaviour by developers and ‘specious consultants’ is causing collateral damage within DNOs and creating outcomes where nobody wins.

I rang to say goodbye and good luck to a brilliant system planner (an extra-high voltage network designer) who is leaving one of our favourite distribution network operators yesterday.
It was upsetting to hear he is leaving because of the huge volumes of grid applications he receives that don’t proceed. He believes that out of every 100 applications he processes, only five grid offers are issued and only two offers see schemes built. In his words, he has better things to do with his time. 

This is a scandal that the industry has been facing for too long, and its causes need to be addressed before we lose more talented individuals.

Unholy trinity

There are three reasons for the large volumes of unsuitable applications hitting the system planners’ desks, all of which are created by developers and specious ‘grid consultants’.

  1. Some developers are spraying and praying. They are putting in multiple applications for multiple sites that they haven’t previously discussed with the system planners. We heard from a network operator last week which had received 41 connection applications from a single developer for a single site. The guilty developers don’t have the expertise or the inclination to have a 10-minute conversation to ask the right questions of the system planners to identify whether there is a viable opportunity, for what technology, and at what scale.
  2. Charlatan ‘grid consultants’ and land agents. We hear of cases where people are scamming land owners by charging £1,000 or more to submit boiler plate grid applications on sites that have absolutely no power scheme credentials from a grid perspective.
  3. The practice of multiple budget offers for different scales and capacities. We recently saw a case where a chartered surveyor representing a land owner had applied for budget offers from a network operator for nine different scales and capacities. This, again, abuses the network operator obligations to process every application.

No fee, no win

As well as poor ethics, behind this plague is the fact that grid applications and offers are at no cost to the applicant. The Department for Business Energy and Industrial Strategy (BEIS) has recently consulted on “assessment and design fees” which will allow network operators to recover the costs associated with providing grid connection offers. This is almost certain to enable network operators to begin charging for grid applications from April 2018.

These application costs will suppress the unscrupulous activities, but will be to the cost and detriment of those site owners who use advisers who have conversations with system planners at the outset, in order to target applications for the right part of the network, on the right ground, for the right technology and at the right scale.

Health warning

The practice of budget offers is unlikely to be thwarted by the new legislation. But these informal quotes must come with a serious health warning. To a layman – even one who understands the developer tolerance to grid costs – some budget offers may suggest that the site is inappropriate or doesn’t have potential. In reality, there will be several questions that need asking in order to eliminate a site.

Our Stop/Go feasibility study would have been quicker and cheaper for the landowner, and would have saved the system planner hours of work. Our study would also give a more accurate picture of the potential of the site and may have revealed an opportunity worth tens of thousands pounds a year in ground rent.

Change now, or pay later

Land and property owners need to be made aware and open their eyes to the activities causing the huge amount of wasted time and money in submitting inappropriate grid applications.

The developer and ‘grid consultant’ community must also look at itself hard in the mirror and change its ways. It must adopt more sustainable best practice approaches now and not wait until April when the BEIS regulations take hold.

This has to happen before we lose more talented but disgruntled individuals from the network operators’ system planning and design teams.

The article was originally posted on LinkedIn.

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