Ofgem approves grid connection reform package

On 15 April 2025 Ofgem published its decision to approve the suite of documents which comprise the TM04+ grid connection reform package including: CUSC modification proposals CMP434 (implementing reform) and CMP435 (applying reform to the existing queue), three connection methodologies and correlating licence changes. This article flags a few key points from Ofgem’s decision. 

No ‘pause’ but information still available 

Ofgem’s 14 February 2025 minded-to decision to approve the connection reform package indicated Ofgem supported Workgroup Alternative Code Modification (“WACM”) 7 for CMP434 and WACM1 for CMP435. 

WACMs 7/1 would have introduced a pause into the process after projects’ Gate 2 readiness checks but before the results of checks against Gate 2 strategic alignment criteria. WACMs 7/1 would also oblige NESO to compile and publish a public register containing the following information in respect of projects which have met Gate 2 readiness: connection point, completion date, installed capacity and technology type of each project.

After reviewing responses to its minded-to-decision, Ofgem have decided to no longer embed a pause into the process but do still expect NESO to publish information within a timeline compatible with the gated application process. 

Tighter timeframes on DNOs

For CMP434, Ofgem have decided to approve WACM2 which contains the core features of the original proposals for reform but with the addition of firmer obligations on DNOs/iDNOs to submit project information to NESO. WACM2 removes ‘reasonable endeavours’ wording on DNO/iDNO obligations to submit full technical data to NESO within 15 business days after the closure of the Gate 2 application window.

Developers will welcome more robust obligations in respect of the distribution and transmission interface, with many having previously experienced delays in submitting Project Progression information. NESO should also in turn be able to run a tighter process, confident that it has received all eligible connection applications for a relevant application window.

2027 projects

Ofgem have recommended NESO provide assurance to projects which are already eligible for Protection Clause 2a (Gate 2 Criteria Methodology), and which have existing agreements to connect on or before 31 December 2027, that they will retain connection dates and connection points. This reassurance may be in same vein as Protection Clause 1 for 2026 projects which are currently reassured that they ‘will retain their existing 2026 connection date and will not be adversely impacted by strategic alignment’. 

Projects eligible for Protection Clause 2a will include, amongst others, those who submitted a planning application on or before 20 December 2024 (that was subsequently validated) and achieve planning consent before the closure of the CMP435 application window. It also includes projects that hold a CfD or CM agreement, have regulatory approval from Ofgem, or hold network services procurement contracts.

Ofgem have also recommended simplification of Protection Clause 3 so that projects that (i) submitted planning on or before 20 December 2024 (ii) have no outcome by the closure of the CMP435 application window and (iii) achieve consent after the closure of the CMP435 application window are eligible to receive Gate 2 terms in a future CMP434 window even if this would breach zonal or national permitted capacities. NESO will need to make both the above changes to the Gate 2 Criteria Methodology by 30 April 2025. 

No attrition 

On 7 April 2025 the government updated the Clean Power 2030 Action Plan (“CP30 Action Plan”) connection reform annex, confirming that 2031-2035 permitted capacities for solar will no longer have a transmission and distribution split but instead be amalgamated by transmission network region. Ofgem’s view is, in line with government, that no further attrition measures are needed beyond those currently incorporated into the reforms. 

We therefore expect there will be no amendment (including any further amalgamation or uplift) to the permitted capacities or technology pots until the publication of the first Strategic Spatial Energy Plan (“SSEP”) in late 2026 with the SSEP reviewing capacity allocations for 2031-2035. 

Approval of March methodology amendments 

On 21 March 2025 NESO published updates to its draft methodology documents to demonstrate how a WACM7/1 pause could be implemented but also to show clarificatory changes. Ofgem has now approved these amendments. While most of these are minor changes, we would flag the following: 

• Long duration energy storage (LDES) - Protection Clauses 2a and 2b will be extended to include holding a live LDES cap and floor agreement. Lithium-ion storage projects will be treated as batteries for the purposes of strategic alignment with the CP30 Action Plan as the plan does not include modelling for lithium-ion as LDES.
• Protecting pathfinder projects – Protection Clauses 2a and 2b will also be extended to projects holding a live contract with NESO awarded through 'Network Services', also known as pathfinder projects.
• Out of scope list –NESO has added run-of-river hydro and geothermal projects to the list of technologies not in scope of the CP30 Action Plan, and therefore these projects will be deemed to have met strategic alignment.
• Clarity for staged projects - For staged or hybrid projects, if one element meets the strategic alignment criteria and another does not, NESO has clarified that the project will receive a staged offer. 

Next steps

Ofgem’s decision will be followed by a standstill period of 56 days for licence changes (i.e. until 10 June 2025), followed in turn by a notice period of 4 weeks as required by the CUSC. 

Ofgem therefore expects the Gate 2 evidence submission window for transmission customers to open in July 2025. In due course NESO will publish the exact dates for the window with a minimum of 4 weeks’ notice. Distribution customers will however be able to submit their evidence to their respective DNOs in May 2025. 

NESO will indicate to projects whether they have been successful or not in the grid reform reshuffle from September 2025, with revised offers being issued from Autumn 2025. The initial focus will be on those projects that are due to connect in 2026 and 2027 and more broadly projects needed for the 2030 pathway will take priority with the aim to issue all 2030 Gate 2 offers by early 2026.