The Government has proposed the idea of a Great British Grid, but how will it actually work in practice? Head of Grids Research at BloombergNEF, Peter Wall, has provided the following comment on the specifics of the proposal:
- 'The GB Grid announcement comes at a time of heightened focus on the scale and cost of grid investment needed in the UK to support its energy transition. In theory, connecting demand-side projects faster can lower costs as network costs are then shared across a larger pool of users - but more investment means more cost to share.'
- 'In terms of directly mobilizing a modest sum of money, a public body is the best way of doing this as it provides confidence and derisking for other capital providers.'
- 'The capital available to GB Grid will be modest compared to the need and from my interpretation the exact capital available is unknown as its a share of capital assigned GB Energy. But this sort of catalytic equity is valuable in terms of reducing risk and cost of capital from other providers.'
If this of interest and you would like further comment, contact, Head of Grids Research at BloombergNEF, Peter Wall
Source: Bloomberg NEF
