The Statement follows a 2023 consultation, which we considered here: Private Wires: First Principles. This is an area in which there is relevant EU law, which we outline further below.

The Statement indicates that the Government has decided “to allow private wires to be built and operated in a limited number of circumstances where the public benefits of allowing such developments are clear”.

The Government identifies four scenarios “where it is clear that allowing private investment in an electricity line is the most efficient approach to a new connection and is in the public interest”.

Connecting Generator to Customer

The Statement indicates that this scenario covers connections between a single generator and a separate user of electricity, and/or between a battery and a separate single user of electricity where this is more cost-effective for the customers in question and the system as a whole, compared to both customers connecting to the grid. The Statement indicates that customers would seek permission from the Commission for Regulation of Utilities (“CRU”) based on regulations which will aim to ensure that:

• the project serves public policy objectives such as security of supply, the offshore wind strategy, the hydrogen strategy, industrial policy, and the national climate objective,
• a lower cost, grid based solution is not available to the customer or customers in question within a reasonable period of time,
• the System Operators (“SOs”) will be able to recover the full cost of the services that they have contracted to provide to the electricity customer, including by means of revised tariffs,
• the private wire will be built to the same technical and safety standards as the grid and capable of being taken in charge by the SOs, and
• the private wires will not interfere with the operation of the grid, or any planned expansion or reinforcement of the grid.

Hybrid Connections

The Statement indicates that this covers a scenario where two separate legal entities and more than one generation technology or a storage technology share a grid connection.

EV Charging

The Statement indicates that this covers a scenario to allow on street charging of electric vehicles.

Supply of another Customer

The Statement indicates that this scenario is intended to allow a customer that self-supplies electricity to provide electricity to a separate customer in a contiguous premises. While this may engage regulatory considerations around supply of electricity, it is not clear why the sites would be required to be strictly contiguous.

Policy Considerations

The Policy Statement indicates that any expansion of the right of private developers to build private wires will be guided by policy considerations, some of which are set out below.

• The objective of any change is to accelerate the deployment of renewable generation and storage.
• Any change must serve other policy objectives including security of supply, the offshore wind strategy, the hydrogen strategy, industrial policy, and the national climate objective.
• Where grid-based solutions are available these will be preferred to private wires.
• Private wires cannot undermine the financing of the grid. Entities with a private wire must pay the full cost of the service they have sought from, or that is provided to them, by the grid.
• Private wires will be built to the same technical and safety standards as the grid and will be capable of being taken in charge by the SOs.
• Private wires will not be permitted to undermine the efficient development of the grid, for example by way of land sterilisation.
• Private wires will have to be developed with the consent of local communities and landowners. Developers will not have wayleave or other powers to use land.

It is not clear whether the policy considerations apply to all or some of the above scenarios. Neither is it clear whether the intent is that the Policy applies to renewable energy and storage only. It would also be helpful to have clarity on the nature of consent that would be required from third parties.

Entitlements under EU Law

It is clear that the Policy and its application must be consistent with EU law: primacy of EU law means that national law must be interpreted consistent with it.

To the extent that private wires are “an electricity line linking an isolated generation site with an isolated customer or an electricity line linking a producer and an electricity supply undertaking to supply directly their own premises, subsidiaries and customers”, they are regulated by Article 7 of the IME Directive. A request for a preliminary ruling on the interpretation of certain aspects of Article 7 is currently before the CJEU.

Article 7 requires that Member States shall take all necessary measures to enable: (a) all producers and electricity supply undertakings established within their territory to supply their own premises, subsidiaries and customers through a direct line, without being subject to disproportionate administrative procedures or costs, and (b) all customers within their territory, individually or jointly, to be supplied through a direct line by producers and electricity supply undertakings.

Member States are required to lay down objective and non-discriminatory criteria for the grant of authorisations for the construction of direct lines.  They may issue authorisations to construct a direct line, subject either to the refusal of system access on the basis or to the opening of a dispute settlement procedure, and this was provided for in the 1999 Act. However, the conditions in the 1999 Act for authorising a direct line do not get triggered, given that applications to connect to the grid tend to be queued up rather than refused outright.

Article 7 also specifies a situation in which a Member State may refuse to authorise a direct line, namely where granting of an authorisation would obstruct the application of the provisions on public service obligations. Duly substantiated reasons shall be given for such a refusal.

Next Steps

The Government indicates that it intends to bring forward primary legislation to amend the 1999 Act and regulations to define standards and processes for granting permission for private wires.

Having a route to consent private wires would be a highly welcome development for roll-out of renewable energy and storage, as well as facilitation of energy supply to large energy users in key sectors like technology, pharmaceuticals and industry.

The Statement is a somewhat tentative step and raises many questions. The long-awaited access to a fair and practical private wires consenting policy will depend on how the Statement is now implemented.