A new report from LCP Delta suggests targeted reforms to Britain’s electricity network could cut constraint costs by up to £3.8bn by 2030.
The measures could also reduce reliance on unabated gas generation and accelerate progress towards the Government’s Clean Power 2030 goal.
Constraint costs occur when electricity generated in one region cannot reach areas of demand due to limited grid capacity.
In these cases, renewable generators are often paid to reduce output while fossil-fuel plants, typically gas-fired stations, are ramped up elsewhere to balance the system.
The report examines the impact of reforms expected under the upcoming Reformed National Pricing Delivery Plan. Analysis indicates the measures could reduce projected 2030 constraint costs from £6.1bn to around £2.3bn, a 60% decrease.
Reducing constraints would also have environmental benefits.
The modelling suggests unabated gas generation in Great Britain’s power sector could fall by up to 33% (13TWh), while emissions could drop by 29% (4MtCO₂).
One of the largest savings would come from accelerating key grid upgrades in East Anglia. Bringing forward these projects from 2031 to 2030 could reduce constraint costs by £2.8bn in that year alone.
Additional measures include improving the carrying capacity of existing networks, increasing participation from smaller renewable and demand-side assets in balancing markets – and forward contracting flexible generation outside the balancing market.
Improvements to interconnector redispatch could provide further savings.
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