Nearly half of primary substations could hit max capacity by 2035 

Without intervention, almost a quarter of the current primary substations in Great Britain (23%) could be operating at maximum capacity by the end of this decade, with this proportion surging to almost a half (45%) by 2035.  

Less than a tenth (9%) of these substations are expected to be operating at full capacity next year.  

The figures are based on analysis of open data published by distribution network operators (DNOs) on the headroom available at each of their primary substations.  

In a new report, Regen and the MCS Foundation explored how much of this headroom would be left if electricity demand rises in line with the ‘Consumer Transformation’ net zero scenario from DNOs’ Distribution Future Energy Scenarios.  

The rates assume that no intervention is taken to upgrade these substations or address thermal constraints through the use of flexibility. They do not represent actual forecasts and are instead intended to illustrate the scale of the challenge of upgrading distribution networks to decarbonise the power grid.  

The report urges the government, regulator and industry to learn lessons from the transmission network, “where a failure to plan and invest has led to long delays in connecting clean energy projects.” 

Although there is uncertainty over when new demand will materialise and there is “a balance to be struck” when setting investment budgets, the report says the downsides of investing early are “far lower than the risk of delayed investment leading to capacity problems, which could stall the net zero transition and limit economic growth”. 

It says the baseline budgets set by Ofgem for the RIIO ED2 price controls are based on relatively low levels of electrification. DNOs will therefore need to make use of the contingency funds available through uncertainty mechanisms to accommodate the uptake of electric vehicles and heat pumps required to meet the UK’s climate targets.  

The report says DNOs should be required to publish long-term investment plans to setting out how they will ensure they have enough capacity to meet the demand forecasts set out in Regional Energy Strategic Plans due to be produced by the National Energy System Operator. This would “smooth out the current boom-and-bust investment profile” and enable DNOs to build up supply chain capabilities.  

The report notes that much of the cost of upgrading local electricity networks is in civil works such as digging up roads: “Therefore, it makes sense to ensure that the upgrade is sufficient to meet the level of demand expected in 2050 rather than having to go back again, causing more cost and disruption.” 

It says this “touch the network once” approach is particularly important in urban areas, where cables are more likely to be buried underground and replacements “will inevitably incur higher civil works costs from excavation and roadworks and cause greater disruption.” 

In a similar vein, many of the distribution assets still in operation were installed during the post-war housebuilding boom in the 1950s and 60s: “These assets are now due for condition-based replacement, which provides DNOs with the opportunity to increase capacity while replacing assets due to age.” 

Low-voltage networks 

The report also notes that headroom data is currently only available at the primary substation voltage level (33kV to 11kV) and above. It says DNOs have made “major strides” in improving visibility over the low-voltage network in the last few years – rolling out network monitors to a sample of their substations and combining this with aggregated smart meter to produce a “complete picture” of half-hourly loads – but these estimates are still “highly uncertain”. 

It therefore calls for all DNOs to undertake and publish secondary network analysis so that other parties, including the government and Ofgem, can grasp the scale of the issue and understand when and where constraints will occur. 

Initial modelling suggests many secondary substations currently have significant spare capacity. However, the report also cautions that there is much less “demand diversity” among the hundreds of customers served by secondary substations when compared to the thousands served by primary substations.  

Current utilisation across National Grid Electricity Distribution’s 181,000 secondary substations

The report says a lack of diversity could be a particular problem in relation to electric heating during winter: “If a local area experiences a cold morning, it is likely that most households in that area will simultaneously require heat.”  

Flexibility could help to solve this problem, but it is “unlikely to be a panacea” and there are questions over the extent to which heat pumps can be used flexibly by pre-heating homes in advance of a cold snap.  

Indeed, price signals reflecting regional or national conditions could further reduced demand diversity by incentivising “clusters of customers” to charge their electric vehicles or run their heat pump at the same time. The report acknowledges that some DNOs are trialling market-based solutions to this issue but says until their efficacy is proven, they will need to consider reduced diversity in their planning assumptions.  

Design demand per EV charger (7kW) depending on the number of customers

Connections 

Lastly, the report warns that customer services will come under pressure before local network capacity. As the adoption of low-carbon technologies increases so too will the likelihood of customers having more than one. This will mean a greater share of connection applications require assessment by network engineers, raising the burden on DNOs. It says the seasonal nature of boiler replacements adds to these concerns.  

It is therefore crucial that DNOs develop a strong pipeline of connection engineers and a suite of online self-service processes that can handle this.  

The report says the connections process is still “clunky,” adding: “The networks have made good progress in enabling many households to connect low-carbon technologies without making an application under ‘Connect & Notify’. However, the process for ‘Apply to Connect’ is not yet streamlined for the tens of thousands of weekly applications that DNOs could face in the future.” 

It says installers need clearer guidance on how to determine the adequacy of households’ supplies: “Customers may incur higher costs if installers are overly conservative in their calculations. If they are too liberal, this puts the network at risk.” 

There also needs to be better coordination between DNOs and supplier when an installation requires the involvement of both. Customers should not be required to “coordinate the works of two corporations.”  

The report additionally highlights the issue of fuse requirements for households on a single-phase power supply: “Some network operators install maximum sizes of 100A, and others only 80A.” 

“There are different policies for connections depending on where in the country you are located – a ‘postcode lottery’,” it adds. “It will be much simpler for installers to deal with common standards and processes.” 

The report says this is significant because if a household requires more capacity than is available on a single phase, they are required to pay to upgrade to a three-phase supply, typically costing £3,000 to £7,000.  

A 100A fuse generally allows for enough import capacity to supply an electric vehicle charger, a heat pump and other domestic loads, but this may not be the case for an 80A fuse: “On paper, reducing the limit at which three-phase upgrades are triggered from 100A to 80A) creates a barrier to electrification.”  

Regen chief executive Merlin Hyman said: “Today, we have significant spare capacity on the local electricity network. However, we need to learn the lesson from the problems caused by the failure to invest in the transmission network.” 

“Upgrading the grid must be an absolute priority for regulators and government, and that includes primary substations and the low-voltage distribution network, not just connections for power generation,” added David Cowdrey, director of external affairs at the MCS foundation. 

“Investment in the grid will need to be ramped up in the next decade to ensure that all local areas can get the connections and development they need. If this is not achieved, targets to install 600,000 heat pumps a year and sell millions of electric vehicles will be at risk.”