Energy regulator Ofgem is calling for feedback on new licensing conditions that would support implementation of the latest Target Model Options (TMO4+), NESO’s proposal to enable connections reform.
TMO4+ has been proposed by the National Energy System Operator (NESO) to enable reform of the system for connecting projects to the grid. NESO has already begun work on a more efficient process through code modifications and new methodologies.
Ofgem will need to amend existing licence conditions to align with the new gated connections process, as set out in the proposed TMO4+ code modifications. The regulator has also proposed new licence conditions that make NESO responsible for developing and maintaining three new connections methodologies.
It suggests a change to the existing licence conditions relating to the obligation to offer terms to all customers who apply for a connection, in line with the new “Gated” approach contained in the proposed TMO4+ code modifications. It would also introduce the ability for the NESO to restrict applications to connect within defined application windows.
The scope of the changes cover:
• Electricity System Operator (NESO) Licence
• Electricity Transmission Standard and Special Licence Conditions
• Electricity Distribution Special and Standard Licence Conditions
• Electricity Generation Standard Licence Conditions
• Electricity Interconnector Standard Licence Conditions
Back in April, before becoming NESO, the UK’s electricity system operator (ESO) proposed TMO4+ and Ofgem was broadly supportive.
Alongside its Clean Power 2030 report, NESO published consultation questions for its Connections Reform project. Ultimately, licencing changes that lead to code modifications and new methodologies will inform the Clean Power 2030 Action Plan that the Department for Energy Security and Net Zero is expected to publish in the next year.
Ofgem’s participation
Ofgem’s consultation on the licence changes is open until the beginning of January, after which time a statutory consultation will be held. Ofgem’s decisions on the licence changes, code modifications and methodologies are expected by the end of Q1 2025.
It has also published its own proposals that would overhaul the system by which new projects connect to the energy system.
If approved, Ofgem claims its new approach would reduce the 722GW of projects in the connections queue by prioritising schemes that can be operational within five years and contribute to the right mix of renewable generation types in the right location and at the right voltage to hit the Government’s 2030 goal.
The regulator previously launched an initiative to speed up grid connection times for new offshore clean energy projects by a full two years: the fast-track Accelerated Strategic Transmission Investment (ASTI) framework.
In August, the first ASTI project was promised funding: a £3.4 billion package went to the Eastern Green Link 2 (EGL2) project, which will be capable of transmitting 2GW of electricity between Peterhead, Aberdeenshire, and a new converter station in North Yorkshire.
The second project to benefit was the Eastern Green Link 1 (EGL1), for which a £2 billion funding package was announced on 15 November.
