Queue Management: stepping ahead with transmission connections reforms

The next stage of the Electricity System Operator's (ESO) reforms to the transmission queue process will commence at the end of May 2024 via the Queue Management process. Directly connected transmission projects in Great Britain will need to be ready to start meeting their milestones or face losing their place in the queue. 

In November 2023, a change was made to the Connection and Use of System Code enabling the ESO to introduce a standard set of milestones into each Construction Agreement entered into with directly connected customers, along with rights to terminate such agreements where projects are not progressing against their milestones. 

The introduction of the Queue Management process is part of the wider package of connections process reforms being made to speed up connections by removing from the queue projects which aren't progressing fast enough in order to better meet net zero targets and the needs of project developers and consumers. See our earlier blog post on the proposed re-ordering of the connections queue.

The ESO set a deadline of 27 May 2024 for direct transmission users with a connection date from 27 November 2025 to submit a Modification Application for a new connection date. If a Modification Application hasn't been made by then (or any Modification Offer has not been accepted), the ESO will issue an Agreement to Vary the Construction Agreement to introduce the Queue Management process to the user's existing connection date and construction programme (it is required to do so as soon as practicable after 27 May 2024). This will be in the form of a table in Appendix Q (see table below for the relevant dates) specifying the relevant milestone dates for the project. The ESO also has the ability to unilaterally vary the Construction Agreement if a user doesn't agree to the variation. 

If following a 60-day remedy period:

• a conditional milestone has been missed, the ESO will terminate the Construction Agreement; or 
• a construction milestone has been missed, the ESO may terminate the Construction Agreement (to be exercised only following an internal ESO escalation process), 

unless, in each case, an exceptional issue (e.g. force majeure, third party delay not avoidable using good industry practice, consenting challenges) has arisen.

Other than any initial Modification Applications made by 27 May 2024, any subsequent modifications will not result in changes to the milestone dates even where the connection date changes, unless there is an exceptional issue or ESO exercises its discretion in relation to a missed construction milestone. There will, therefore, be a risk of termination where there are project delays which can't be attributed to exceptional events.
 

NB. All milestone durations are referenced back from the contracted connection date. Which set of milestones apply will be based on the date the Agreement to Vary is issued working backwards from the connection date.

Developers will need to familiarise themselves with the new queue management process as it starts to apply. Many will already have prior experience with the similar distribution connections process which has applied since 2020 but there are some key differences in the two processes (e.g. how milestone dates are calculated and the lack of "tolerance" in the transmission connections process). Some of the milestones will come round fast for projects with a 2026 connection date. Developers will need to ensure they have all the evidence required by the ESO ready to submit so as not to fall foul of their milestone dates and the short remedy period.

Investors should also add to their due diligence list, not only whether a project has a connection date which aligns with the rest of the project timescales, but also whether it is on track to meet the milestones and keep that connection date. Given the length of the existing queue and the reordering that is proposed, once a connection date is lost, any new connection date reapplied for could be years down the line.

The ESO has provided guidance on the queue management process. If you would like to understand what the new process means for you or your business, please do not hesitate to get in touch.