The National Energy System Operator (NESO) has laid out the final version of its grid connection methodology reform for approval by Ofgem.
The UK energy regulator is expected to respond to the proposals by end of March 2025. NESO’s plan addresses the volume of projects waiting to be connected to the grid, which sits over 750GW, as well as reducing connection delays (the time a project is in the queue) from five years to just six months.
NESO proposes the reformed connections process and entry to the reformed connections queue should be based on a combination of project ‘readiness’ and ‘strategic alignment’.
To enter Gate 2 project owners will need to demonstrate their project is not only ready to progress but also ‘strategically aligned’ with the needs of the system, which NESO states relates primarily to alignment with the pathways set out in the government’s Clean Power 2030 Action Plan (CP30 plan).
The government’s report contained figures which will help developers know how likely NESO is to deem their project strategically aligned: by technology, capacity and location, at transmission and distribution.
A route forward for projects already in the queue
NESO will, as a one-off activity, reassess the existing queue in what it is calling the Gate 2 to Whole Queue exercise. As with the process moving forward, projects will be assessed with zonal consideration of projects in alignment with CP30. NESO also sets a route into the new queue for projects that were not known at the time of the CP30 plan or that are otherwise outside its scope.
Those projects will be considered ‘protected’, according to the proposed methodology.
Assuming Ofgem approves the plans, project developers in the current queue will be given a period of time to submit a Gate 2 declaration or application and provide evidence that they consider they have met the Gate 2 criteria.
NESO has suggested that certain projects will be deemed to have met Gate 2 criteria without strategic alignment if they can provide evidence by the close of the Gate 2 to whole queue evidence submission window (estimated for the end of May 2025) that:
- They have submitted an application for planning consent before NESO submits its final connections methodologies proposals to Ofgem (planned for 20 December) and secured planning permission by the close of the Gate 2 to whole queue evidence submission window
- Been awarded a contract for difference (CfD)
- Received an Ofgem cap and floor or merchant route regulatory approval for interconnector or offshore hybrid assets projects
These projects must still meet the readiness element of the Gate 2 criteria.
A topic that came up ahead of NESO’s submission was the possible implementation of a financial instrument. As discussed in a Current± blog last week, this would see developers provide a certain amount of cash security to be able to pass Gate 2, proposed at £20,000 per MW. This sum would be returned upon connection, with the potential for losses if a project did not progress to timeline or was reduced in size.
This is still up for debate; NESO’s submission only covers the gating process and moving projects from the existing queue into the new system. It states that it received 132 responses from a “diverse range” of industry representatives and will consider these before developing a proposal for Ofgem.
The operator also acknowledges that a transitional period will be necessary in the process of moving to the new system, so “early in the new year” it will work with Ofgem to understand what the appropriate form for a transitional period should be, giving the wider industry clarity “as soon as possible”.
NESO said it intends to start issuing Gate 1 offers from Q2 2025 and is committed to issuing Gate 2 offers as early as is possible in 2025.
Matt Vickers, director of connections reform at NESO, called the connections reform a “critical moment”, adding NESO is “committed to providing a new consistent process for the projects needed for the delivery of clean power by 2030 and beyond”.
