TMO4+ and “First Ready, First Connected” – musings from the workgroup reports

Overview

The following is an update to our initial Law Now titled “TMO4+ and “First Ready, First Connected” – reforming a disorderly queue?” dated 29 May 2024 which primarily reported on CUSC Modification Proposals (“CMP”) 434 and 435 as they were originally set out in National Grid Electricity System Operator’s (“NGESO”) original proposal form.

Since then, the connection reform process has continued at pace through a series of workgroup consultations, culminating in workgroup reports for the CMP 434 and 435 proposals being published on 25 July 2024. The workgroup reports document the findings and recommendations of the workgroups, which comprise industry experts and stakeholders, in respect of these CMPs. They also invite feedback from stakeholders (using the pro forma response form available here) on the latest proposals so as to ensure external feedback is considered before a recommendation by NGESO to the Code Panel and, ultimately, Ofgem is made. Stakeholder feedback is required to be submitted to NGESO by no later than 5pm on 6 August 2024. Project developers should take advantage of this narrow window of opportunity to shape the final modification report before it is submitted to Ofgem for approval. The implementation date for the reformed process is still targeted for 1 January 2025.

In this Law Now, we provide an update specifically on the latest developments set out in the CMP 434 and 435 workgroup reports. Developers with existing connection agreements will need to pay close attention to CMP435. For additional background and context to the TMO4+ proposals as well as some of the wider initiatives being discussed, please refer to our previous Law Now.

Context

This time last year, Ofgem published its Open Letter on future reform to the electricity connections process highlighting the challenges faced in the connections reform process and expressing support for the range of shorter-term initiatives proposed by NGESO and the Energy Networks Association (“ENA”) to speed up timescales for new grid connections.

In November 2023 Ofgem and the Department for Energy Security and Net Zero (“DESNZ”) then published the Connections Action Plan (the “CAP”) which set out a summary of agreed actions for network companies, Ofgem and the Government to reduce grid connection timescales. The CAP identified six key practical actions:

• raising the barriers to entry for new direct connections to the transmission network by requiring the applicant to provide a letter of authority from the landowner in respect of the relevant site;
• termination rights/obligations in connection offers for new transmission connections where the relevant customer is failing to meet certain milestones in progressing their development – known as “Queue Management”;
• better utilisation of network capacity through less conservative assumptions in respect of how new connections will use capacity and better use of flexible/ “non-firm” connection arrangements;
• for projects that have secured and entered into connection offers, a move away from ordering the ultimate connection date on the basis of when the connection offer was entered into and towards prioritising projects that are ready to connect;
• improve transparency of data on the condition of networks such that those applying for new connections can be more targeted in their approach and sharpen the obligations and financial incentives on network companies to deliver timely connections and high-quality customer service.

However, despite the initiatives to date, the queue of projects that are in theory waiting to connect has continued to grow at an unprecedented rate and (for generation alone) as of 1 March 2024, stands at 701 GW across the transmission and distribution networks - this is estimated to rise to 800GW by the end of 2024. (We say in theory, as if all of these projects were connected, NGESO estimate we would have an amount of electricity generation that is over four times more than what is predicted we’ll need by 2050.

Read full article here.