Clean Power 2030: Connections reform - 'first ready and needed, first connected'

The National Energy System Operator (NESO) has published its final proposals to significantly reform the grid connections process. The reforms are expected (subject to Ofgem approval) to be implemented in Q2 2025, with existing projects expected to receive revised grid connection offers by the end of 2025. We summarise the key proposals as put forward by NESO on 20 December 2024.

Currently, the grid connection application process in Great Britain (GB) operates on a 'first come, first connected' basis. There are few entry barriers to the queue resulting in it being heavily oversubscribed (there were projects totalling 739GW in the connections queue in December 2024) such that projects joining the grid connection queue today would typically expect to receive a connection date in the late 2030s or later. Such long delays in achieving connections are causing a material impact on GB power projects and are not aligned with the UK Government's recently published Clean Power 2030 Action Plan (CP30 Plan), which seeks to accelerate investment in low carbon generation and acknowledges that grid connection delays are one of the most significant challenges for new power projects.

The former Electricity System Operator published transformative proposals in April 2024 proposing to re-order the connections queue for both new and existing projects on a 'first ready, first connected' basis (see our previous article here) to remove so-called "zombie" projects which are not progressing and are clogging up the queue. Since then, the proposed reforms have materially changed, with NESO's final proposal being to reorder the queue on a 'first ready and needed, first connected' basis. Most projects will need to demonstrate that they meet both the Gate 2 Readiness Criteria and the Gate 2 Strategic Alignment Criteria (see Figure 1 below) to retain a place in the queue and receive a firm "Gate 2" connection offer.

 

Figure 1: Key criteria for entry into reformed grid connection queue

 

The driving principle behind the reforms is that the grid connection queue should only contain viable projects which are aligned with the technology mix required to achieve the Government's strategic plans (initially, the CP30 Plan and, later, the Strategic Spatial Energy Plan (SSEP), the Centralised Strategic Network Plan (CSNP) and Regional Energy Strategic Plans (RESPs) (once published) – see our article for further detail on the proposed strategic plans). NESO's final proposal has been submitted to Ofgem for approval (expected to be given by the end of Q1 2025). The Government and Ofgem previously published a joint open letter to industry expressing their support for the alignment of strategic planning with connections reform and connections reform is identified as a critical enabling action in the CP30 Plan.

 

Application process

Most projects seeking a GB grid connection (distribution-connected demand and very small embedded generation with no significant impact on the transmission system are excluded) will need to apply for a Gate 1 offer (optional and does not apply to relevant embedded small and medium projects) or Gate 2 offer under the new application process, regardless of whether the project has an existing connection agreement.

A one-off realignment of all existing projects within the queue based on whether they meet the Gate 2 criteria, referred to as the 'Gate 2 to Whole Queue' (G2tWQ) exercise, is expected to commence in Q2 2025 and to result in new Gate 2 offers being issued by the end of 2025.

New applications to the queue are to be suspended until connection reforms have been implemented to ensure a stable base for the realignment exercise. To be included in the G2tWQ process, projects must have submitted a connection application by 29 January 2025 for generation projects and 21 March 2025 for demand projects and have their application 'clock-started' by 12 February 2025 for generation or 4 April 2025 for demand. Subsequent applications will be processed after implementation of the reforms and projects will need to apply for a Gate 2 offer under the enduring process (see below). For embedded generation, applications will continue to be received and processed by DNOs/IDNOs, but these will not be passed to NESO for transmission impact assessment during the pause.

Projects which energise prior to the first Gated Application Window closing (potentially in May 2025) will not need to make an application in the G2tWQ application process.

As part of the G2tWQ application process, projects will be able to submit requests for advancement of their connection date and can submit preferences in relation to any change to their point of connection.

Projects which fail to meet the Gate 2 criteria (and are not selected for connection point and capacity reservation, e.g. future Network Services Projects, CATOs or interconnector projects) under the G2tWQ process will be removed from the queue. Unsuccessful transmission-connected projects and those with a BEGA or BELLA will receive a Gate 1 offer with an indicative connection date and location. Relevant small and medium embedded generation will have their agreements amended to "not-gate 2" or terminated. The existing obligations (e.g. User Commitment liabilities and securities) of projects unsuccessful in obtaining a Gate 2 offer will fall away. Unsuccessful projects, and any new projects, will subsequently be able to apply for Gate 2 offers in the twice-annual application windows which will apply under the enduring process (the first of which is expected to open in Q3/Q4 2025).

 

Gate 2 criteria

As illustrated in Figure 1 above, projects entering the reformed grid connection queue will be assessed to determine whether they meet the Gate 2 Readiness Criteria and the Gate 2 Strategic Alignment Criteria.

Gate 2 Readiness Criteria

The Gate 2 Readiness Criteria focus on whether the relevant project has secured appropriate land rights or, where a Compulsory Purchase Order is required to secure land rights, the project has made sufficient progress in applying for the relevant planning permission.

For land, projects will have to:

• meet minimum acreage requirements for 100% of the project site based on the prescribed energy density value for each technology;
• provide a red line boundary for the site showing the land secured; and
• evidence secured land rights to the land required for the project (e.g. by means of an option agreement, lease or existing ownership), which meet NESO's requirements, including in respect of the term of such arrangements and termination rights.

If the planning route is followed instead, projects will have to demonstrate a validated application for planning consent in accordance with the Development Consent Order process or other planning consent process required to obtain Compulsory Purchase Order powers.

Gate 2 Strategic Alignment Criteria

Projects which meet the Gate 2 Readiness Criteria will be assessed against the Gate 2 Strategic Criteria. A project will meet such criteria if it is:

• eligible for 'protection';
• aligned to the capacities within the CP30 Plan;
• a designated project; or
• a specified technology which is not within the scope of the CP30 Plan.

NESO will confirm whether a project meets the Gate 2 Strategic Alignment criteria prior to the start of the Gated Design Process. Projects which do not meet any of the Gate 2 Strategic Alignment criteria will not receive a Gate 2 offer.

 

1. 'Protected' projects

Figure 2 sets out the 'protections' which are available in the G2tWQ exercise and, for projects which apply but fail to obtain a Gate 2 offer in the G2tWQ exercise, in subsequent application rounds.

'Protected' project	Type of protection	Relevant application round
Due to connect before the end of 2026 and has met both the Gate 2 Readiness Criteria and Queue Management (QM) milestones M2 (planning and consents secured) and M7 (project commitment).	Retains existing connection date and location and will not be adversely impacted by the strategic alignment of the queue.	G2tWQ exercise only.
Planning application submitted by 20 December 2024 (so has met QM M1) and QM M2 (planning and consent secured) met by G2tWQ application.	Retains a place in queue but will be reordered (existing connection date not protected).	G2tWQ exercise only (but if the planning application is rejected and successfully appealed after the G2tWQ window, protection will be given in subsequent windows).
Holds a CfD or Capacity Market contract or is an interconnector or offshore hybrid asset with a cap and floor agreement or merchant interconnector approval prior to closure of the relevant application window.	Retains a place in queue but will be reordered (existing connection date not protected). NESO and TOs will use best endeavours to provide a revised connection date meeting the contract requirements.	G2tWQ exercise and reapplications in subsequent application windows.
Planning application submitted before, but consent not obtained until after, closure of G2tWQ application window.	Retains a place in queue (existing connection date not protected) provided the GB total permitted capacity for the relevant technology is not exceeded (even if relevant zonal permitted capacity is exceeded).	Reapplications in subsequent application windows.

Figure 2: 'Protected' projects

 

2. Alignment with the CP30 Plan

To be aligned to the capacities within the CP30 Plan, the project must fall within the capacity range for the relevant technology in the Connections reform annex of the CP30 Plan for either 2026-30 (Phase 1) or 2031-5 (Phase 2). For all in-scope technologies, a GB-wide total capacity range is given (shown in Figure 3 below and from which already installed capacity will be deducted) and for certain technologies, more granular zonal capacity ranges are specified. NESO has confirmed it will use the maximum figure to determine when the capacity range has been reached.

For solar and batteries and, for Phase 1 only, onshore wind, the GB network is split into 11 transmission zones and 8 distribution zones. The capacity range for onshore wind in Phase 2 is split into two zones: (1) England and Wales; and (2) Scotland. Some substitution between zones and reservation of capacity for undersupply is permitted. It is proposed that the zonal capacities set out in the CP30 Plan may be rebalanced by NESO to maintain alignment with the GB-wide total permitted capacities where 'protected' projects exceed the permitted capacities in one or more zones.

Projects which indicate they are able to connect by the end of 2030 (i.e. with a current connection date, or which have requested a connection advancement, pre 2031) will be sorted based on planning status and considered against the relevant Phase 1 capacity range after any 'protected projects'. Any such projects exceeding the Phase 1 capacity range will then be considered against the relevant Phase 2 capacity range, alongside projects which indicate they are able to connect between 2031 and 2035. Any projects exceeding the Phase 2 capacity range will not be given a Gate 2 offer unless another 'protection' applies.

Technology	Phase 1: 2030 Capacity Range (GW)	Phase 2: 2035 Capacity Range (GW)
Offshore wind	43-50	72-89
Onshore wind	27-29	35-37
Solar	45-47	45-69
Nuclear	3-4	4-6
Low carbon dispatchable power (including biomass, power BECCS, gas CCUS and hydrogen)	2-7	Up to 25
Unabated gas	35	Subject to separate NESO designation process
LDES	4-6	5-10
Batteries	23-27	24-29
Interconnectors	12-14	17-24

Figure 3: GB-wide capacity ranges in the CP30 Plan Connections reform annex

Following publication of the SSEP and the CSNP, NESO will update the relevant methodologies to align the queue to the permitted capacities outlined in the SSEP (rather than the CP30 Plan) and the latest network assumptions in the CSNP. This update will not be applied retrospectively to existing connection agreements.

 

3. Designated projects

NESO can 'designate' projects it considers will provide significant benefits to electricity consumers in GB. Such designated projects will meet the Gate 2 Strategic Alignment Criteria and can also be prioritised for queue position. NESO has said it only intends to designate projects which:

• are critical to security of supply;
• are critical to system operation;
• materially reduce system or network constraints;
• use new or highly innovative technologies which are not within the scope of the CP30 Plan and which are not wave, tidal, non-GB generation or transmission-connected demand; or
• have very long lead times (i.e. beyond 2035).

 

4. Projects not in the CP30 Plan scope

Transmission-connected demand, wave, tidal and non-GB generation projects will be deemed to have met the Gate 2 Strategic Alignment Criteria.

 

Post-Gate 2 offer

Following receipt of a Gate 2 offer, there are a number of obligations which successful projects will need to comply with or risk having their connection agreements terminated or connection capacity reduced including:

• NESO has proposed introducing a Capacity Commitment Fee of £20,000/MW, against which developers would be required to post security (netted off against existing Cancellation Charge security) on acceptance of a Gate 2 offer. In respect of the financial instrument only, NESO issued a Call for Input, the outcome of which is awaited (NESO held a webinar on 22 January 2025, during which it was stated that NESO's minded to position is to introduce a modification in February 2025 to allow a financial instrument to be introduced after the G2tWQ process);
• each project will need to meet its QM milestones (which are proposed to be amended under connection reforms). For example, projects which have not yet submitted a planning application will additionally be required to do so within specified time periods for each planning type calculated from the date of the Gate 2 offer; and
• there are ongoing obligations in respect of keeping secured land arrangements in place and the amount of installed capacity which is built outside of the Original Red Line Boundary provided in the Gate 2 application.

There may be opportunities for projects which are unsuccessful in obtaining a Gate 2 offer in the G2tWQ exercise, or who were awarded a later connection date than they requested, to subsequently fill gaps. Where a Phase 1 project terminates its connection agreement, NESO will seek to reallocate this capacity or offer advancement to another suitable project and intends to publicise details of available capacity in each zone/across GB.

If you would like to explore what connections reform will mean for your project or would like assistance with the Gate 2 application process, please contact us.