Implementing connections reform: our role in supporting a strong and fair outcome

The connections reform process is proceeding at pace. We have been working closely with the National Energy System Operator (NESO) to ensure that it delivers a strong and fair outcome, meaning the right offers are issued first time. This blog post explains our expected role in handling the exceptional cases where disputes may arise that lead parties to seek an Ofgem determination.

Earlier this year, Ofgem published the Target Model Option 4 (‘TMO4+’) connections reform decisions. This marked a significant step in the journey to deliver a new connections process designed to reduce average connection dates, better meet customers’ needs, and enable a timely transition to net zero.

Implementation of the reform process by NESO is now well underway. The first application evidence window has now closed and in time we will see new offers being issued to deliver a newly reformed queue for connecting to the grid.

To ensure the overall reform process is considered a success, it is of vital importance that all project applicants receive fair and equitable treatment throughout and have channels to raise concerns where they believe this may be in question.

Right queue, first time

We know that there is a strong desire for certainty around the new queue, but we have also heard very clearly that the queue needs to be right first time. This means ensuring that processes are comprehensive, and that any concerns raised are dealt with promptly.

Complaint procedures operated by NESO and the Distribution Network Operators (DNOs) will be the primary routes for receiving and resolving concerns, not least because they offer the quickest route to a potential solution. Exceptional cases may arise however, and project applicants, NESO or DNOs may look to Ofgem to review and reach a determination.

Our role in determinations

Ofgem’s overall and enduring approach to determinations is being explored through the End-to-End review. We also recognised in our TMO4+ decision that a change to our determinations policy would be required through the development of dedicated guidance for determinations arising from the current reform exercise.

Our main consideration is the extent to which Ofgem determinations can effectively add value to implement TMO4+; that is, in addition to the assurance and complaint resolution procedures being developed by the NESO and DNOs, what additional role can Ofgem play in supporting a fair outcome aligned with our TMO4+ decisions.

In this context, we remain of the view that:

• as indicated in our April decision, revisions to existing contractual terms necessitated by the proper implementation of the TMO4+ decision will be deemed reasonable, so we do not expect to revisit the TMO4+ decisions through a determination request
• any role in determinations be limited to exceptional cases, e.g. those where concerns raised cannot, for objective reasons, be addressed through the complaint handling procedures operated by NESO and DNOs

We are therefore reviewing whether and how we deal with determinations arising from the reform exercise as a unique, one-off process and will soon consult on dedicated determinations guidance.

We are also considering the potential to recover costs from project applicants in a fair and proportionate manner when handling determination requests.

Next steps  

NESO is moving ahead with the queue formation process, and we will continue to engage throughout to support a strong and fair outcome. Queue reform remains crucial to creating an energy system that realises the Government’s mission of Clean Power by 2030 and the longer-term ambition of net zero by 2050. In support of these aims, we will soon consult on our proposed approach to handling determination requests in this context, to provide further clarity and build confidence.