Assessing constraints on installations (grid)
Electricity connection costs can have important implications for ground and water source heat pump projects. These costs could range from zero to hundreds of thousands of pounds. Although it’s difficult to predict connection costs before engineering design work is undertaken, having an understanding of the process and likely outcomes will help those nurturing early-stage projects to assess and respond to the risk posed by electricity network constraints.
Overview
Electricity network operators have a role to ensure the security of supply to consumers. Given the increasing demand that is expected to be placed on the network due to the electrification of heat and transport, understanding and managing the type and size of electrical demand on the network is becoming increasingly important for operators.
Large demand assets (e.g. Electric Vehicle charging points and Heat Pumps) that wish to connect to the network must inform the network operator about their connection. This applies to all sizes of heat pumps – although smaller connections can follow a simpler process. This allows the network operator to consider the potential impacts of the connection, since heat pumps have potential to disturb or overload the network.
NOTE: All heat pumps installations are required to inform the relevant Distribution Network Operator (DNO) about the connection. This is done through either the ‘Connect & Notify’ or ‘Apply for Connection’ process.
This module guides you through the process of informing the Distribution Network Operator (DNO) of a new demand asset on the network, and the likely cost impacts this will have on the project. This guide only outlines the process for distribution connected demand, which applies to all installations at the scales considered in this toolkit.
Connection Process
The best source of information for the installation is the official guidance from the Energy Networks Association, the representative body for all of the electricity and gas network operators in the UK and Ireland.
For any heat pump installation – the installer must use either ‘connect and notify’ or ‘apply for connection’. This flow chart shows you which process to follow.
The ‘connect and notify’ process can be used if the existing electricity supply arrangement is sufficient. The conditions for this are that the Heat Pump system has less than 32A demand and the maximum demand of the property after installation is less than 60A per phase. This allows the installation to be carried out without the need for prior approval, and the DNO to be informed retrospectively (this must be done within 28 days of the installation date).
The ‘apply for connection’ process must be used if the adequacy of the current electricity supply is unknown, or if the heat pump installation’s maximum (electrical) demand is greater than 32A (this roughly translates to a single phase heat pump with an electrical power input greater than 7kW or a three phase heat pump with an electrical power input greater than 21kW). Note that the thermal output of ground and water source heat pumps is generally 3-4 times larger than the required electrical input power – so a heat pump advertised as having a 30kW thermal output might use 8 to 10 kW of electrical power when running at full load.
The scale of installations in parks and greenspace will generally be in the range 10kW to 500kW (electrical), meaning that most installations will need to follow the ‘apply for connection’ process.
NOTE: In general, heat pump installers will carry out the connection process application with the DNO. However, the installation may require additional connection fees, which could impact project feasibility.
Likelihood of network upgrades
The DNO is bound by regulation to approve any new connection request. For small heat pumps installed in buildings and locations where there is already an electricity supply with adequate capacity, it is possible that the installation will be “plug and play” and no work will need to be carried out. If this is not the case, the DNO may have to make changes to the property’s individual connection and the wider local network to allow for the additional supply capacity. The scope of this upgrade work can range from very minimal to a major engineering undertaking. Major works are more likely to be required in constrained networks, where the physical infrastructure is being operated close to the maximum rated power it can handle. In these particular circumstances, the requirement for major works may result in very high connection costs for moderately sized installations.
It is difficult to generalise the need for network upgrades, and only specific analysis by the DNO can fully establish the costs needed. Hence, it is important to carry out the connection application process as soon as possible. This will only be able to be completed after the detailed design has been carried out and the heat pump model and location is confirmed.
DNO Response Times
Distribution Network Operators are obliged to provide a timely response, based on the Electricity (Guaranteed Standards of Performance) Regulations 2010 here. Response rates are DNO-specific – these timescales can be found by searching for the ‘DNO connections Guaranteed Standards of Service’. All low voltage demand connection responses (such as are required for heat pumps) can be expected within 25 working days of an application.
Expected upgrade costs (if any)
The costs associated with a project’s grid connection can be split into customer connection assets (the assets required to safely connect a device to the grid) and network reinforcement costs (the cost of upgrading the capacity of the surrounding network to support the additional load added).
Customer Connection Assets
“The customer is required to pay for the full cost of assets that will be used solely by the connecting customer” (Ofgem Guide). E.g. the physical grid connection for the heat pump.
Some park and greenspace installations will not incur customer connection costs. For larger schemes where the new electrical demand exceeds the load that the existing systems have been designed to cope with, consumer connection costs in the order of thousands of pounds should be anticipated.
Network Reinforcement Costs
“A proportion of the cost of network reinforcement where it’s required. The proportion is calculated based on the share of new capacity created that will be used by the connecting customer.” (Ofgem Guide)
“A rebate to the DNO or a previously connected customer under the Electricity (Connection Charges) Regulations 2002. This rebate will apply where the new connection uses network assets that were installed and paid for by a previous connection.”(Ofgem Guide)
This guide from Ofgem states that the vast majority of connections (~95%) do not trigger network reinforcement. However, should reinforcement be required, this means new network assets will need to be installed to facilitate the new demand.
The expected network reinforcement costs cannot be generalised and must be investigated by network operators on a case by case basis. However, the risk of these costs making a project unfeasible are reduced because if the DNO decides to carry out a large-scale upgrade, only a proportion of the new capacity will be charged to the connection customer.
Managing risks and budgets
The grid connection of heat pumps can represent risk for the feasibility of heat pump installations, especially for medium to large scale installations. Dealing with this risk requires budget contingencies. The risk register should reflect the potentially significant risk that grid connection costs represent for a project. The best advice for dealing with the concern of grid connection is to contact the relevant DNO early to investigate potential associated costs. Generally, this can be done as soon as the heat pump model and install location are known.