15 April 2025

Ofgem has today approved the electricity licence and code changes needed to implement the transmission connection reform programme in Great Britain. The decision marks an important milestone for the programme, which will now move into the implementation phase.

What is TMO4+?

TMO4 refers to Target Model Option 4 which was one of the options for reform proposed by the National Energy System Operator (NESO) and selected by Ofgem in December 2023. This was subsequently upgraded to TMO4+ when it became apparent that the initial reform would not be sufficient to deliver the reforms needed.

The general principle of the reforms is to move away from an approach of 'first come, first served' towards an approach of 'first ready and needed, first connected' - prioritising connections based on their readiness and on strategic alignment.

Introduction of Readiness Criteria and Strategic Alignment Criteria

The newly introduced connections methodology introduces Readiness Criteria and Strategic Alignment Criteria. These criteria will be applied to the existing connection queue this year (Gate 2 to Whole Queue process), and then as standard going forward. The methodology applies to all transmission connections and to generation projects connecting to a distribution network which meet the threshold for a transmission impact assessment (TIA).

Readiness Criteria (in high-level terms):

  • Land - freehold, leasehold (20+ years) or option (3+ years) meeting the minimum acreage requirements for the technology type.

    OR
  • Planning - where following the Development Consent Order (DCO) process.

Strategic Alignment Criteria (in high-level terms):

  • Relevant protections - projects contracted to connect by the end of 2027 (Gate 2 Whole Queue only); projects which are significantly progressed (e.g. contract for difference or capacity market agreement); projects which applied for planning prior to 20 December 2024 (not applicable to Gate 2 to Whole Queue).
  • Aligned with Clean Power 30 Action Plan - aligned with the capacities in the CP30 Action Plan.
  • Out of scope of Clean Power 30 Action Plan - transmission-connected demand and generation technologies not covered in the CP30 Action Plan.

    OR

  • Designated by NESO - via project designation methodology.


Further detail on the reform package is set out in our January article.

Has anything changed since January?

The key change as compared to NESO's proposals is that the protection is now available to projects contracted to connect before the end of 2027 - whereas this was previously 2026.

What's next?

The licence and code changes approved by Ofgem are now subject to a standstill period to allow for challenge.

The Gate 2 to Whole Queue process will then commence in May. All projects holding accepted transmission offers - and distributed generation projects above the TIA threshold - will need to submit evidence that they meet the new criteria. Having assessed eligibility, NESO will then issue revised offers based on the reformed queue. These are expected in the Autumn for projects connecting before the end of 2027.

There are also still further (secondary) code changes on which Ofgem's decision is awaited:

  • CUSC Modification Proposal 446 - Increasing the threshold for TIAs for distributed generation in England and Wales from 1 MW to 5 MW.
  • CUSC Modification Proposal 448 - Introducing a progression commitment fee for projects in the transmission connections queue.

For further information on the connection reform programme, contact Gus Wood, James Stanier or George Nixon from our Energy team.