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“First Ready, First Connected”: Reform to GB Electricity Grid Connections
EMEA | 出版物 | 三月 2025
The “First Ready, First Connected” reforms proposed by the Electricity System Operator (ESO), and which could be in place by the end of Q2 2025, aim to address existing issues with the application process for connections to the GB electricity grid. Historically, applications were made and granted via a “first come, first served” queue system, and there is currently no process for prioritising energy project connections that are genuinely ready to commence generation. The reforms are intended to optimise the use of the grid and facilitate a more efficient transition to renewable energy sources, removing stalled projects that are holding up the queue. The reforms are part of a broader strategy, most recently set out in the Government’s “Clean Power Action Plan 2030” (CP30 Plan), to modernise the UK’s energy infrastructure, support the growth of renewable energy, and meet the country's ambitious climate targets.
History of reform
In 2023, Ofgem approved amendments to the grid connection framework contract, the Connection and Use of System Code (CUSC), introducing a “Queue Management” process whereby existing projects would need to meet certain progression milestones to demonstrate progress and retain their place in the queue. Failure to meet such milestones would give the ESO the right to terminate a connection offer already made for that project. The ESO also introduced a “two-step” process for applications where all applications (in England and Wales only – it did not apply in Scotland) receive an initial ‘step one’ offer within three months of application, followed by a firm offer detailed in a ‘step two’ offer, three months later. This three-month window was subsequently extended to six months by Ofgem.
In December 2023, the ESO published its Final Recommendations Report for longer-term reform of the connections process, including what is known as “Target Model Option 4” (or TMO4). Under the TMO4 proposals the ESO would implement a new connections process based on an early application window, which would have an indicative frequency and duration of 12 months, and two formal gates, to track project progression and hold project developers to account. The two-gate process works by “Gate 1” offering (or rejecting) an application for a connection date based on ’a coordinated network design’ taking into account local geographic considerations, followed by “Gate 2” which would bring forward ’priority projects’ that demonstrate a certain level of progress. As an entry requirement for Gate 1, a Letter of Authority for a lease from a landowner is required to ensure commitment from all project stakeholders.
In April 2024 the ESO announced its decision to build on the TMO4 reforms, now known as the ‘TMO4+ reforms’ which will see a move from the originally proposed "First Ready, First Connected" system to a “First Ready and Needed, First Connected” system.
TMO4+ Proposals
Any projects in the queue for a transmission system connection (and those in the queue for a distribution connection which has an impact on the transmission system), will be subject to the TMO4+ reforms, which are currently expected to be implemented in Spring 2025.
In short, in order to secure a connection offer under the TM04+ proposals, a project will need to demonstrate the following:
- Strategic Alignment: Projects must be aligned with long-term strategic planning for the UK's energy system, including the Government's CP30 Action Plan and the upcoming Strategic Spatial Energy Plan (SSEP).
- Readiness Criteria: Projects need to demonstrate they are "ready" by meeting specific requirements such as obtaining exclusive land rights (e.g., an option, lease, or ownership) and, for projects pursuing the Development Consent Order (DCO) process, submitting and validating an application for planning consent.
Certain projects in the existing queue will receive "protected" status. This includes projects scheduled for commissioning in 2026, as well as other projects that are "significantly progressed" (for example which hold a contract for difference (CfD), a capacity market agreement, or which already have full planning permission).
Other projects that are in the current grid queue will be given a grace period prior to the implementation date of the TMO4+ reforms to demonstrate that they have met the Gate 2 criteria (see above). Evidence submitted by these projects will be assessed by the ESO and those that meet the Gate 2 criteria will be able to retain their existing connection date or request an accelerated connection date based on the reduced queue (if applicable). Those projects already in the queue who do not meet the Gate 2 criteria will revert to an indicative connection date and point (i.e. a Gate 1 offer), which may be later than their current proposed connection date. They can then apply for Gate 2 once they meet the necessary criteria.
A summary of the anticipated Gate 1 and Gate 2 processes is below:
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Gate 1 |
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Gate 2 |
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For projects which already hold a grid connection offer, it will be essential to meet the Gate 2 criteria ahead of the go live of the TM04+ reforms to secure their position in the queue (or seek an acceleration of the same).
The addition of the “strategic alignment” limb of the Gate 2 process aligns with one of Ofgem’s core goals of ensuring a sufficiently broad geographical and technological mix. Ofgem is considering and prioritising a “strategic need” in its connection criteria, moving from a technology agnostic approach to preferring certain technologies in certain geographic areas over a purely “project ready” as initially proposed. The strategic alignment criteria will require alignment with the technology mix required to achieve the government's strategic plans (initially, the CP30 Plan and, later, the SSEP, the Centralised Strategic Network Plan (CSNP) and Regional Energy Strategic Plans (RESPs). In practice, this may mean that technologies like battery storage (BESS) may be given higher priority to help smooth out demand and supply differences.
The ESO will also be able to 'designate' projects it considers will provide significant benefits to electricity consumers in GB, allowing them to pass the Gate 2 criteria and be prioritised for positions in the connections queue.
If a project receives a Gate 2 offer, there are a number of obligations it will need to comply with or risk having its connection agreements terminated or connection capacity reduced:
- Capacity Progression Fee: NESO has proposed a fee, subject to a defined activation trigger, would apply to generation projects in the Gate 2 queue that have not yet submitted applications for planning consent. Initially set at £2,500/MW, the fee would then increase by an additional £2,500/MW every 6 months, up to a maximum of £10,000/MW, and would be payable upon termination or capacity reduction.
- QM Milestones: Projects must meet queue management milestones, which may be amended under connection reforms. For instance, projects without a planning application must submit one within specified time periods from the Gate 2 offer date.
- Ongoing Obligations: Projects must maintain secured land arrangements and manage the installed capacity built outside the ’original boundary’ provided in the Gate 2 application.
Conclusion
The TM04+ "First Ready and Needed, First Connected" reforms represent a significant shift in the UK electricity grid connection regime. By prioritising projects that are ready for immediate connection, these reforms aim to reduce delays, lower costs, and support the rapid deployment of renewable energy. While there are challenges to implementation, the potential benefits for efficiency, cost savings, and climate goals make these reforms a critical step forward for the UK's energy sector.
The potential impact of this reform could result in a 50-75% reduction in the current grid connection queue. This creates an opportunity for well-funded projects with later connection dates to request an accelerated connection and earlier access to the grid if they are ready and capable of meeting the Gate 2 criteria.
The reforms will be welcomed by investors in renewable projects who will want to see the political support for renewable projects in the UK and their investment being realised quickly. The two staged process has the advantage of giving projects enhanced timeline certainty and the potential to expediate the connection of a project. Securing Gate 2 status will inevitably increase investor confidence in financing projects.
A key criticism of the reforms is whether network companies will know where and when to build out infrastructure. Currently, the number of actual connections to the network is much lower than the rate at which the queue is growing. Critics argue that there is a disconnect between the contracted capacity and broader build plans. This could impact investor confidence if network companies cannot meet the promised connection dates. Given the current rate of demand, it may be unrealistic to expect networks to connect all contracted projects by their connection dates. Additionally, network companies have the contractual right to change connection dates, which could further undermine confidence in connection agreements and ultimately affect investment.
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