The National Energy System Operator (NESO) has provided a brief update in an open letter following its (recently closed) consultation on proposed connection. The full proposals will be published by the end of 2024 for approval by Ofgem; in the interim, NESO has provided initial feedback in its open letter which we have outlined below.

Updated high level positions

As part of the Gate 2 criteria, NESO proposed under the consultation that building on the "readiness" criteria previously proposed, "strategic realignment" criteria must also be included to align with the upcoming Clean Power 2030 Action Plan.

NESO has sought to provide reassurance to stakeholders on a few key points:

  • Reaffirming its view that projects which have met the Gate 2 criteria and are already under construction and due to commission in 2026 or earlier will not be adversely impacted by aligning the queue to the CP30 Plan (Connections Network Design Methodology, 5.5.5 page 27), NESO has said following stakeholder feedback that it will review and clarify the meaning of "under construction" in its final proposals.
  • Stakeholders have also said that well progressed projects need further comfort they will align with the new criteria. NESO has clarified that the following projects will meet the strategic alignment criteria if they can provide suitable evidence:
    • Where the planning consent application has been submitted before the final methodologies proposal is submitted to Ofgem and the projects has secured planning consent by the end of the Gate 2 evidence submission window;
    • Where a Government Contract for Difference has been awarded (Hydrogen Allocation Round projects need only meet the "readiness" element of the Gate 2 criteria);
    • Where a Capacity Market contract has been awarded by NESO; or
    • Where interconnector or Offshore Hybrid Asset projects that have been awarded an Ofgem cap and floor or merchant route regulatory approval.

Next steps

Assuming the full proposals are submitted by the end of 2024 as planned then Ofgem is expected to make a decision by Q1 2025. If you are looking for advice on the latest position on NESO's market reforms, our team of Energy experts can help. Please contact James Stanier and Russell Evans for more information.