This isn’t the first article I’ve written about connections reform in the power industry, and I’m sure it won’t be the last. It’s a rapidly changing story, and one of immense importance to projects as diverse as housing developments, data centres and clean power generation.
The connections queue has grown into a near-mythical beast, at once imperilling the UK’s energy security and seemingly threatening just about every major infrastructure project. It’s instructive to remind ourselves where we are and where we’re going, before looking at how investors, planners and developers can negotiate the upheaval to achieve their strategic goals.
Quick basics
First, let’s go over some basics. The UK’s power system is split between the transmission network – very high voltage cables designed to carry load over long distances with minimal losses – and the distribution system. The latter describes the edges of the grid infrastructure, where voltages are stepped down, and electricity is delivered to homes and businesses.
In practice, things are a little more nuanced: major power users and generators are connected to the transmission network, but the bulk of customers and smaller generators require a distribution connection. Skills and supply chain issues mean there’s a practical limit to how quickly these can be provided, so in recent years we’ve seen a huge uptick in transmission applications, as these have historically had an even lower bar to entry.
As a result, we’ve ended up with far more projects than the network operators and distributors have the resources to connect, and hence a queue. We don’t need all the schemes in the queue, but until recently all connection applications had equal priority. Which means projects that weren’t fully funded, didn’t have planning permission or simply weren’t necessary, would get a place in the queue and effectively block more urgent infrastructure coming in behind them. The introduction of fees, securities, and cancellation charges have had only a limited effect in calming these speculative applications.
By the beginning of 2025, the connections queue contained generation and demand projects totalling around 800 GW. But the UK’s peak power requirement is forecast to reach ‘only’ 80 GW in 2030. The looming important date: the year by which the government plans to have decarbonised the UK’s electricity. Having so many unnecessary schemes queued isn’t just absurd; it delays projects that are essential to hitting the Clean Power 2030 target.
The need for reform
That, in a nutshell, is why we need connections reform: to allow funded, important infrastructure to proceed without unreasonable delays caused by applications for connections that might never happen. The need for reform is most pressing in the transmission-connected space, and for larger distribution-connected generation projects. That’s where the current reforms are targeted – they exclude embedded demand: schemes connecting to the distribution network.
In 2022, discussions started within the industry around the need to prioritise ‘ready’ and necessary projects. After considering various scenarios – from changing nothing, all the way to insisting that schemes had planning permission and funding – it was decided to offer priority to projects that had either their land rights agreed, or which had submitted a Nationally Significant Infrastructure Project (NSIP) planning application.
If that sounds like a high bar, impact assessments showed it would in fact have a limited impact if introduced simply for new applications. The effect would be much greater if the criteria were applied to all existing applications in the queue, but even this wouldn’t necessarily deliver the results the grid needed.
Things have moved forward more quickly under the new government, which re-nationalised the National Energy System Operator (NESO) and gave it the remit to plan our entire energy system. NESO worked to establish how the UK could hit Clean Power 2030 objectives in the cheapest way possible, developing targets for the different generation and storage projects we would need. After being approved by the government, these have effectively been turned into quotas to be applied to the connections queue for generation projects, giving us an additional tool with which to filter applications.
First ready and needed
What does this mean for transmission connections? The queue previously ran on a first-come first-served model, where applications were simply processed in the order they joined the list. The focus has now evolved to consider a project’s state of readiness – judged using the land and planning criteria I mentioned before – but also the extent to which we need it, weighed against the quotas – and remember these only apply to generation projects.
To get an idea of the effect the ‘first ready, first needed, first connected’ approach will have on the connections queue, you need only look at battery energy storage system (BESS) schemes. Analysis in February this year showed there were 221 GW of battery storage projects queued, against a target (quota) of just 27 GW by 2030.
The ‘first ready’ part of the criteria means we can prioritise connecting the most viable 27 GW of battery capacity, ahead of stalled or surplus projects. However, ‘first needed’ means that the remaining nearly 200 GW of capacity is unlikely to retain a place in the queue, as it’s not necessary under the quota.
If BESS projects stand to fare badly under the new system, certain others should find it easier to get connections. There are precious few onshore wind schemes in the queue, largely because planning rules banned new projects in England until comparatively recently, so there’s plenty of quota available for ready projects. The 2025-2030 queue is undersubscribed for solar installations, so some later projects may be able to connect earlier than previously thought.
Clearing the queue
So, what of the queue right now? NESO paused UK connection applications at the end of January 2025, to allow it to implement these new changes as part of the TM04+ connections reform package. Projects already in the queue with planning permission, and which are due to connect in the next two years, will keep their place. Everything else, along with any new applications, will be processed using the above criteria until the relevant quota is reached.
But it’s more complex than that. There are actually two sets of quotas, for 2030 and 2035. Any projects not receiving a connection offer for 2030 will be put into the 2035 pot, which generally follows the same process. The quotas are also broken down regionally, with the goal of trying to match local generation, storage and consumption patterns.
There’s a further complication. The system as originally planned had two mandatory stages: gate one and gate two. The former would give projects an indicative connection offer, with the thinking being that this would help transmission companies plan necessary grid work. Although this still exists, it’s no longer mandatory – most projects are likely to gain land readiness and enter at gate two. While planning permission isn’t necessary, projects that have it will be prioritised above those that just have land.
Another change should help the progression of smaller projects. In much of England and Wales the distribution limit has been raised to 5 MW, meaning that schemes below that can connect in DNO timeframes, rather than waiting for a transmission impact assessment which can take much longer. However, this doesn’t apply to all grid supply points.
Go behind the meter
Anyone following connections reform will know it’s a fast-evolving process. Things will continue to change, no doubt influenced by the success of the reforms, and particularly whether they help the UK achieve the Clean Power 2030 goal.
However, it’s important to again note that NESO’s quotas cover only generation and storage schemes. There’s no capacity limit for connecting power users – such as data centres, housing developments, EV charging hubs and the like. These projects will be evaluated purely on their readiness.
We anticipate the net effect of the reforms will be an acceleration of the most viable projects, particularly those addressing critical infrastructure needs. But this is contingent on the networks actually delivering – skills and supply chain challenges remain. Also, it’s likely that many stand-alone schemes will continue to wait for grid connection. As an example, in Scotland, Scottish Power appears to have already filled its 2030 and 2035 quotas for BESS, so unless things change there’ll be no battery connection offers in the region for ten years.
Just as was previously the case, developers and investors can improve the chances of getting a scheme connected by exploring co-location. Similarly, it may be easier to connect a major housing development if it’s part of a private network that includes renewable generation.
These kind of ‘behind the meter’ schemes provide a route to market for generation businesses that aren’t going to get a good grid offer. By linking up directly with a demand customer, they can still build their project and sell their power, but just via a different mechanism. Private networks are a benefit both to power users and producers, as neither has to pay expensive network transmission fees on locally generated and consumed electricity. Additionally, power users can more easily demonstrate their green credentials to potential customers and investors.
* www.eclipsepower.co.uk/solutions
