The GB electricity industry is undergoing fundamental change, to such an extent that almost everything will be different by 2030 – assuming the country’s Net Zero plans are delivered. In the grand scheme of the change and uncertainty, proposals to reform the connections processes in GB sounds trivial but we believe it is one of the most influential initiatives that will practically affect (help or hinder) delivery of Net Zero. But why is this? With the move away from ‘First-Come, First Served’ to ‘First-Ready, First Connected’, the GB Connections Reform (GBCR) project being run by ESO, is changing the key principles under which the industry connects new projects to the grid. This is the first in a series of papers by TNEI to help explain what these changes are, how they’ll impact you, and how we can help.
How does Grid Connection affect project deliverability?
The earliest reference we could find to ‘grid connections’ being an issue affecting project deliverability was from 2011[1]. Back then this was a relatively niche issue concerning on the deployment of wind in Scotland, but the issue has grown to impacting almost every megawatt scale project (and many sub megawatt scale projects) wanting to connect to the system (distribution or transmission). In recent years, several industry initiatives have tried to solve this problem using the same core process but these initiatives have not managed to fully address the problem. In response to this, National Grid ESO created the GBCR project in October 2022 to design a new connections process, with a recommended solution called “TMO4” being presented in December 2023. This coincided with the release of the ‘Connections Action Plan’ jointly by Ofgem and DESNZ (The Department for Energy Security and Net Zero) in late November 2023.
The TMO4 solution suggested using a combination of gates (i.e. conditions to be met before progressing along the process) and windows (i.e. batching together projects at a similar development stage). This was subsequently refined in April 2024 to “TMO4+” to allow easier application of the reformed process to those projects in the current queue who are awaiting a connection. Both TMO4 and TMO4+ intend to implement a ‘minimal viable’ version of the solution by January 2025 with additional changes occurring in the subsequent years. This refinement from TMO4 to TMO4+ hides some key changes to the process that will materially change both the process and how connectees interact with this process. Whilst the TMO4 solution has been superseded by the TMO4+ proposals; it should be noted that the TMO4+ proposal is still under detailed development, so the below table summarising the differences may change.
Key changes between the TM04 and TM04+ solutions
| Description | TMO4 | TMO4+ | |
| Distribution Capacity | How DNOs confirm their needs for distribution connected generators to the ESO. | Known as Reserved Developer Capacity (RDC). A request from the DNO for a defined amount of capacity that the DNO can then allocate to distribution projects | Known as DFTC (Distribution Forecasted Transmission Capacity). A forecast by the DNOs which does not secure any transmission access for distribution projects. |
| Gate 1 Offer | What the contract/offer provided at Gate 1 will contain. | A location and ‘worst case’ connection date | An indicative location and date; no details of works. Conditional on meeting Gate 2. |
| Gate 2 Criteria | What conditions need to be met to apply for a Gate 2 offer | Submit planning permission | Validated land option with deadline to submit planning |
| Gate 2 Offer | What the contract/offer provided at Gate 2 will contain | Revised Gate 1 offer with potentially earlier connection date | Similar to today – location, date and works stated (subject to change) with Queue Management applied. |
| Queue Position | When in the process if an applicant’s queue position determined. | Allocated by Gate 1 contract | Allocated by Gate 2 contract |
| User Commitment | When are the current User Commitment arrangements applied | Gate 1 | Gate 2 |
TNEI and National Grid ESO can provide more detailed information of what these solutions contain. These changes will be in addition to (and may necessitate additional changes to) the recently implemented changes to the connections process, such as the introduction of Queue Management and requiring Letters of Authority to apply.
What do the Grid Reform Changes mean for developers?
At the time of writing, the specific details of the reform are still being developed and are therefore subject to change. However, there are some key themes that are applicable to all projects, regardless of size, technology and location.
- The implementation of these reforms will affect every project that is not yet connected – including those projects with existing contracts. This effect will be subtly different between onshore and offshore projects, but developers will need to take a more active role in managing their connection agreements.
- It will still be relatively easy to get an indicative ‘gate 1’ contract – but this may not have any benefit to developers. NGESO claims that contracting at Gate 1 will allow them to undertake anticipatory investment, allowing developers to connect quicker than if they applied directly to Gate 2. However, this is currently hypothetical with significant regulatory barriers to be worked through.
- Interactions between Distribution and Transmission is still going to be obscure and complicated from a developer’s perspective.
- The timescales to obtain a fully detailed contract will be longer, but those projects that progress should have quicker timescales to connect. It’s unclear at this stage whether this benefit will result from greater coordination of network design/build, anticipatory investment ahead of need, or through trimming the queue size that the network is designed/built for.
- The costs associated with the process (application fees, financial security etc) are also subject to being reviewed, both in terms of value and timing in the process.
There is a lot of detail about the reformed process that is still uncertain, but the anticipated timing of implementing it is clear. The reformed process is currently being developed by industry workgroups CMP434 and CMP435 and their expected timetable can be seen below.
Reformed Process Timescales
| Date | Description |
| Early July 2024 | Open consultation by the industry working groups on the proposals |
| July & Aug 2024 | Further development of proposals by industry workgroups following consultation responses. |
| Late Aug or early Sept 2024 | Additional consultation on the proposed final option(s). There could be multiple options developed but all of them will need to be finalised by this point. |
| Mid-Sept 2024 | Final report (with finalised options) issued to Ofgem by industry working groups. |
| Early Nov 2024 | Ofgem decide which option (if any) is to be implemented |
| Early Nov to End 2024 | Implementation of Ofgem’s decision, including any evidence that needs to be provided by developers. |
| 1st Jan 2025 | Reformed process goes live. |
The timescale for delivering this change is very ambitious; however there has been no indication of delays to the go-live date at this stage.
TNEI’s Grid Expertise
So, with all of this in mind, how can TNEI help? There are 4 main ways we can help developers:
- Provide detailed analysis of these changes and the impacts on you. The above is a very short summary of the proposals; we can provide greater detail and talk you through how the reformed process is expected to operate and what this means for you.
- Providing market intelligence of these and other industry changes that are relevant to you.
- Support inputting your views into the industry workgroups and ensuring your voice is heard in the industry consultations.
- Preparing your portfolio of projects and informing your strategy in time for these changes to be implemented.
If you could benefit from TNEI’s Grid Expertise, email GridConnections@TNEIgroup.com to find out more.
[1] https://www.ref.org.uk/publications/229-renewables-output-in-2010
