Regulation watchdog Ofgem has responded to the UK’s Electricity System Operator’s (ESO) proposed reforms for the country’s grid connection problems.
In an open letter, Ofgem said that it “welcomes the ESO’s proposal to move towards a ‘First Ready, First Connected’ approach” and “looks forward to overseeing how this develops through the upcoming formal industry code change process”.
ESO proposed a two-gate process for new applications, with an annual application window to reach Gate 1 and ‘readiness’ criteria to reach Gate 2. Only projects that meet the Gate 2 criteria will be provided with a queue position.
Ofgem does suggest, however, that the reforms need to be developed alongside a full assessment of risks and benefits and a robust plan for regulatory and operational implementation.
With this support, the regulator believes that ESO’s proposal has the potential to deliver the goals set out in the joint Ofgem and DESNZ Connections Action Plan (CAP), published in November 2023.
This plan set out a framework of actions and further ambitions needed to tackle the growing delays customers are experiencing when seeking network connections.
As a result of CAP, 17GW of electricity projects have been offered earlier grid connection dates since the start of 2023. Despite this, the connections queue has continued to grow at an unprecedented rate.
According to Ofgem, the queue now stands at 701GW across transmission and distribution and could rise to 800GW by the end of 2024.
Updated reforms
ESO’s update this week (a proposal termed ‘Target Model Option 4’ or ‘TMO4+’) is to apply the ‘First Ready, First Connected’ process to both new applications and existing users, which Ofgem wholly supports.
Ofgem has encouraged all interested stakeholders to share their views on the TMO4+ proposal with the ESO and engage with the change process in the coming months.
Similarly, in November 2023, ESO was granted new powers to proactively manage the connections process by terminating projects that “are not progressing against their project milestones”.
These queue management milestones were inserted into all transmission grid connection contracts with a connection date after November 2025.
Ofgem’s participation
In March 2023, Ofgem established its Accelerated Strategic Transmission Investment (ASTI) framework, which sought to fast-track crucial infrastructure projects. Compared to previous processes, ASTI can accelerate necessary project funding decisions by up to two years.
This framework already supports one project: Eastern Green Link 1 (EGL1), a proposed major subsea energy link between Scotland and England that received a provisional budget of £2 billion to accelerate its connection.
More recently, in March of this year, Ofgem recommended two high-voltage interconnectors between Britain and Europe, totalling 3.2GW, for approval of their grid connections.
One of the projects being considered is LionLink, a 1.8GW ‘Offshore Hybrid Asset’ (OHA) connecting Britain to Dutch wind farms in the North Sea. The second is the 1.4GW Tarchon Energy interconnector, which will connect the British grid with Germany via a 610km power cable.
The regulator has launched two separate consultations on its position to find the two projects; if approved, they will add a total of 3.2GW to Britain’s 11.7GW of interconnection capacity.
