East Suffolk Council
Statement on Ofgem's approach to National Grid’s Nautilus project
A statement from Cllr Tom Daly, East Suffolk Council Cabinet Member for Energy Projects, on Ofgem's approach to National Grid’s Nautilus project.
The decision by OFGEM (the Office of the Gas and Electricity Markets) not to offer a regulatory licence to National Grid’s Nautilus project for a brownfield landfall at the Isle of Grain has been met with dismay by many in local community, not least here at East Suffolk Council. While cost is an important factor in any decision-making process, it appears to trump the significant environmental, community and social harm that development in other more sensitive locations would create.
The refusal to allow for the higher connection costs at the Isle of Grain is a worrying indicator that OFGEM seems willing to go down the same path as OFWAT in denying investment in the appropriate infrastructure to meet the needs of our communities and our environment going into the future. Instead OFGEM seems to be putting short term cost advantages before all else including exploring possible future economies in coordinating multiple projects at a brownfield site rather than peppering our heritage coast with unplanned-for industrial development.
It is therefore clear that there is a large disconnect between the planning process and the financial influences steering connection offers, with short term costs to the end consumer carrying more weight in the decision-making process than the identified planning constraints (the massive impacts on our environment and communities) raised in consultation for a proposed connection location. ESC also remains disappointed that offshore connection options are not being fully explored due to cost and targets, resulting in a significant amount of additional impact being imposed on local communities within East Suffolk, many of whom are already fighting a barrage of development which will heavily impact our local communities for generations to come.
Offshore wind has huge strategic value, both in terms of ability to strengthen the UK’s energy security and meet our decarbonisation goals. Apparently, according to OFGEM, this value does not extend to investment in necessary infrastructure that has been strategically planned.
Indeed, the cost constraints identified at the Isle of Grain are understood to focus on the export of energy, primarily associated with the transfer of power from the UK’s domestic electricity grid into the proposed Nautilus Offshore Hybrid Asset (OHA). So, according to OFGEM, East Suffolk bearing the costs of keeping GB energy exports as cheap as possible in the short term, is preferable to commensurate investment in future proofing our fast-developing energy networks.
This short sightedness is exacerbated by OFGEM currently consulting on Regional Energy Strategic Plans - their policy framework for future strategic planning that will come into place in 2026. At the very least any future decisions should wait until these plans have had full engagement and consideration of responses which would hopefully have regard to deliver the best option for the country having regard to the future capacity requirements of the network taken as a whole rather than the current arrangement to send everything to communities in East Suffolk.
This short-term, short-sighted approach from the “regulator” that excludes social and environmental costs as well as the energy production demands of the years to come is unacceptable. We call on OFGEM to reverse this decision and allow Nautilus to proceed to the Isle of Grain and explore reducing constraint costs with a feasibility study on other projects joining nautilus to share in the investment of grid upgrades in that location, thereby significantly reducing costs per project.