UK: NESO updates connections reform proposals
NESO and Ofgem confirm additional transitional measures
February 04, 2025
Why should I read this?
On 15 January 2025, the National Energy System Operator (“NESO”) and Ofgem each published letters on the latest TMO4+ connections reform proposals. In its letter, NESO set out a series of new transitional measures to facilitate the implementation of TMO4+, with Ofgem’s letter approving those measures. Understanding the impact of these measures will be important for anyone seeking a place in the grid connection queue.
What are the additional measures?
NESO has outlined three additional measures to aid the transition into Connections Reform:
- a “pause” in NESO accepting or processing any applications from 29 January 2025 until the point at which TMO4+ is implemented (or Ofgem confirms it is not proceeding). This applies to new, modification, BEGA and BELLA applications and Project Progressions. There are limited exceptions to this (see point 3 below);
- the existing transitional offer process will now only apply to new directly connected demand projects, with the change applying from 29 January 2025 until TMO4+ is implemented (or Ofgem confirms it is not proceeding with the reforms). To enable this, the Phase 1 Transition Offer process, which is currently due to expire on 31 March 2025, will be extended until the point at which TMO4+ is implemented (or Ofgem confirms it is not proceeding). Applications for demand projects must be made by 21 March 2025, and “clock-started” by 4 April 2025, to be processed by NESO and accepted by customers in time for inclusion in the Gate 2 to Whole Queue (“G2TWQ”) process;
- exceptions to the “pause” period to allow for the continuation of issuing full offers for certain modification applications (“ModApps”), identified by NESO as being those that:
- are linked to circumstances where NESO or the Transmission Owner (“TO”) consider that the ModApp will not have a material impact on the G2TWQ process;
- relate to the safety or security of the network;
- are delivery-critical ModApps for customers who are connecting before the end or 2026;
- are excepted on a case-by-case basis, against set criteria determined by NESO and the TOs. The criteria will cover:
- possible impact against the TO’s overall project programme. This includes impacts to the ability of the TO to deliver transmission works required to connect the project and the ability to invest in network development economically and efficiently;
- committed spend. This includes impacts to the TO’s committed spend to deliver required transmission works, which may include procurement, manufacturing and construction of onshore transmission assets; or
- impact on other projects. This includes where the TO assess that accepting or not accepting the ModApp would have a material impact on other projects;
- are excepted on a case-by-case basis where NESO or the TO consider that failure to process the ModApp at the relevant time could have a detrimental impact on the safety and operation of the network.
NESO have also confirmed that any agreement variations (ie Agreements to Vary) and notices required to be triggered by the TOs will continue throughout the pause period as ‘business as usual’. Similarly, novations will continue to be processed as they are considered to be immaterial to the G2TWQ process.
What else do I need to know about the “pause”?
NESO and TOs will use reasonable endeavours to promptly process applications made before the pause period, to enable offers to be issued prior to the implementation of TMO4+. To enable this, by 12th February 2025, NESO will ask that customers have paid their application fee, provided any additional justification requested, and answered any questions from NESO and the relevant TO. If they do not do so by this date, NESO proposes that the application will not be “clock-started”/processed. For demand applications, these must have “clock-started” by 4th April 2025 (two weeks after the application deadline of 21 March 2025). If an application is submitted during the pause period, it will not be accepted and the customer will need to reapply under the TMO4+ process.
Customers who make applications and receive offers during this time must ensure that their offers are accepted before the offer acceptance period expires. NESO is proposing to shorten this period (to 4 weeks), which will help offers to be in a signed position by the implementation of TMO4+, so that customers can participate in the G2TWQ process. Failure to accept the offer within the offer acceptance period will result in the offer lapsing.
What about DNO connection offers?
Distribution network operators (“DNOs”) will not implement a pause period at distribution level. DNOs will continue to provide offers following the receipt of an application. Where there is need to follow the transmission impact assessment process (ie submit a Project Progression to NESO), DNOs have indicated that their preference is to wait until the introduction of the CMP434 window before sending the applications due to NESO.