Ofgem backs ESO’s ‘ambitious’ proposals for overhauling grid connections process 

Ofgem has welcomed the Electricity System Operator’s (ESO) latest proposals for reforming the grid connections process, describing its preferred model as an “ambitious idea”.  

The regulator said the proposals would “significantly contribute” to realising the “overall vision” of the joint Connections Action Plan (CAP) published by the government in November, but qualified that they are unlikely achieve the plan’s full objectives in isolation.  

In June 2023, the ESO launched a consultation on potential options for reforming the connections process to cut rapidly growing wait times by prioritising viable projects that are ready to connect.  

The organisation outlined four main ‘target model options’ (TMOs) and identified the fourth (TMO4) as its preferred one.  

Under this two-gate model, projects would only be able to apply for a connection during annual windows and would be assessed in these batches. Projects that passed this first gate would be given a backstop connection date as well as a connection site and capacity.  

However, they would not be allocated a place in the queue until they passed the second gate, which would require them to apply for planning permission or be designated as a priority project. The ESO said this process would only apply to new applications.  

In a recent update, the ESO said it now intends to implement an enhanced version of this model named TMO4+. 

Instead of a backstop connection date, projects that pass the first gate would receive an indicative connection date that could move forward or backwards.  

The ESO said its current position is that projects would need to secure both land rights and a date for the submission of a planning application to pass the second gate. It said projects would be grouped together for gate 2 assessments at regular intervals throughout the year but would be assigned a queue position based on the date by which they demonstrated having met the gate 2 criteria.  

Furthermore, the ESO said this process would also be applied to projects in the existing queue, which would be given a period of time prior to its implementation to demonstrate whether they have met the gate 2 criteria.  

Those that met the criteria would have the option to retain their existing connection date or request an accelerated connection based on the reformed queue. Those that did not would move to an indicative connection date. 

The ESO said this “first ready, first connected” approach could potentially cut the connections queue by more than half.  

Responding to the update in an open letter, Ofgem noted that the connections queue across transmission and distribution stood at more than 700GW at the beginning of March and is expected to hit 800GW by the end of this year.  

The regulator therefore welcomed the ESO’s proposed model as “an ambitious idea with the potential to effect some of the changes required”. It said the process has the potential to “significantly contribute” to the realisation of the “overall vision” of the CAP but added: “In isolation, we consider it unlikely this proposal will fully achieve the CAP objective.  

“Progress will continue to be needed on other actions within the CAP across all action owners, reprioritising as required.” 

Ofgem said the proposals, which remain “at an early stage”, must be developed alongside “a thorough assessment of risks and benefits, and a robust plan for regulatory and operational implementation.” It said it will monitor the development of the process to “assess if this goes far enough and consider what further measures are appropriate if needed.” 

The regulator supported the ESO’s statement that it is “considering the use of financial instruments” at both gates to “encourage only viable projects to enter and remain in the connections process.”  

Ofgem said there should be appropriate conditions to hold a place in the queue beyond both gates 1 and 2. It elaborated that “it is still useful to remove stalled projects from gate 1 if these projects are used to inform anticipatory network build” and suggested that this could be done through conditions such as a time limit and/or a financial holding charge.  

It also backed the ESO’s commitment to reassess its network modelling assumptions, in particular, those concerning the depth of enabling works required for connections.  

Ofgem laid out a series of expectations of the ESO going forward, including that it should identify and recommend any regulatory and legislative changes that will be necessary to implement its proposals or mitigate any associated risks.  

The target date for implementation is 1 January 2025 but Ofgem said the ESO should consider what contingency measures could be taken if this target date becomes unachievable.  

It said the ESO should also consider how to “pragmatically prepare for the reforms and manage the expectations of existing and new customers in advance of the implementation date, particularly the connection offer terms customers hold or expect to hold.”  

Although the ESO has not yet published a formal consultation on its proposals, Ofgem has asked to stakeholders for their views, for example, on whether they are sufficient and whether there are other measures that should also be implemented. The deadline for responses is 6 May.  

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