OFGEM APPROVES HISTORIC ENERGY GRID REFORMS TO SUPERCHARGE BRITAIN'S CLEAN POWER AMBITIONS

Ofgem has today (0700hrs Tuesday 15 April 2025) approved historic reforms to fast-track clean power plugging into Britain's electricity grid - with the new system launched by the end of May.

The new connections regime abolishes the broken 'first-come, first-served' system. This meant unviable, stalled or speculative 'zombie' projects blocked hundreds of wind, solar and energy storage developments from connecting, with backlogs of more than 10 years to connect.

Ofgem estimates that 64% of the current 765GW worth of projects holding contracts (at the end of February 2024) may be deprioritised for not hitting tough new criteria under the reforms.

The new system accelerates power projects that meet new "readiness criteria" (including land rights) and are "needed" under the UK Government's blueprint to achieve 95% carbon free electricity by 2030. This will be based on a new longlisting ('Gate 1') and shortlisting ('Gate 2') process.

Ofgem argues it lays the foundations for power generation and energy storage to meet future electricity demand across Britain's high-voltage transmission and local distribution networks.

The new system will be managed by the National Energy System Operator (NESO).

Ofgem CEO, Jonathan Brearley, said:

"This is a historic decision which supercharges Britain's clean power ambitions with a more targeted approach anticipated to help unlock up to £40bn a year of mainly private investment and energise economic growth.  

"These reforms cut through red tape, consign 'zombie projects' to the past and accelerate homegrown renewable power and energy storage connections as we head to 2030.  

"Houses and hospitals, electric vehicle charging stations, data centres and the emerging AI sector, will also all benefit from the new streamlined fast-track approach, which will help boost energy security and drive down bills." 

For the full decision and impact assessment see here.

It includes Ofgem analysis that:

-     765GW worth of projects held connections contracts across the transmission and distribution networks across Britain at the end of February 2025. NESO and Ofgem projects between 60% and 70% of projects never connect historically.

-     UK government estimated between 204GW and 231GW of generation, storage, interconnectors will be needed by 2030 and up to 318GW by 2035 to be on track to deliver net zero by 2050

-     360GW of projects on the current queue may have their contracts amended to 'Gate 1' because they are not ready, with a further 122GW potentially put back for not aligning with the 2030 plan. This would be a 64% reduction to the current queue, allowing viable projects to be fast-tracked.

-     42GW of 'demand' projects (17GW at transmission level and 25GW at distribution level) will be deemed as "needed" so will be fast-tracked if they meet the "readiness criteria". These are energy intensive users like manufacturing, industrial services, chemical, mineral products as well as future users including data services

The Clean Power 2030 Action Plan published last November is a key stepping stone to a net zero UK economy by 2050. The current UK Government's current Planning Bill proposes to link connections reforms with strategic planning.

NEXT STEPS

·    this decision will be followed by a standstill period of 56-days for the licence changes, followed in turn by a notice period of 4-weeks

·    Ofgem expects transmission customers to submit evidence in July 2025. NESO will publish the exact dates for the window with a minimum of 4 weeks notice. The evidence submission window for distribution grid customers to submit evidence will open in May 2025.

·    NESO will indicate to projects whether they have been successful in securing a place in the reformed queue from September 2025.

·    NESO and network companies expect to start issuing revised offers from autumn 2025, with an initial focus on those that are connecting in 2026 and 2027.

·    Ofgem expects all 'Gate 2' offers to be issued to projects requiring connections by 2030, in line with the Clean Power Action Plan 2030.

·    NESO will work to open the next window for new applications beyond the current connect queue aiming for this to be before the end of 2025.

·    NESO and network companies will further refine the plan and keep the timeline under review. It will timeline must be subject to robust, clear and transparent governance. Ofgem and government will be closely involved in this process

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For more information please contact Ofgem's press office on press@ofgem.gov.uk