Correspondence

Open letter from DESNZ and Ofgem on connections reform delivery

Published 16 April 2026

Dear colleagues,

Thank you for your continued engagement as we progress connections reform. Connections reform is a critical enabler for our clean power by 2030 ambition which is expected to bring forward £200 billion of investment in network and project build by 2030. 

Under the new process, 221 gigawatts (GW) of projects that applied for firm connection agreements but were not needed for 2035, or were no longer progressing, have been moved out of the main queue. Alongside this, many projects self-selected into Gate 1, meaning the total capacity filtered out is even higher. This has created a clearer and more credible pipeline for clean power delivery. Current queue outcomes indicate that most technologies have sufficient capacity in the prioritised (Gate 2 / Phase 1) queue to meet 2030 ranges.

The programme has, however, faced significant delays due to data errors in historic connection agreements, and the need for NESO and network companies to rework network studies and planning. We have been clear that further slippage is not acceptable and have set expectations for a firm, coordinated response. This includes regular public reporting against the revised timetable so industry can track progress. We continue to work closely with NESO and the network companies to oversee delivery, using refreshed and enhanced governance. At this pivotal stage in the reform process, as projects begin receiving connection offers, proactive and timely communication between network companies, NESO and developers is essential to identify and escalate any issues.

The queue formation outcomes also highlight emerging risks for certain technologies, in particular, a high volume of battery storage projects advancing to Gate 2 relative to the capacity ranges set out in the Clean Power 2030 Action Plan. The government and Ofgem strongly support the deployment of electricity storage, which plays a crucial role in allowing the clean, low-cost energy generated by renewables to be used more efficiently over time, thereby reducing the reliance of the power system on unabated gas. We remain committed, as set out in the 2025 Clean Flexibility Roadmap, to maintaining a market environment that supports the deployment of 23-27 GW of grid-scale batteries by 2030, and welcome the sector’s work to bring forward so many mature projects. Although the reform process removed many non‑viable battery projects and significantly reduced the queue, there is still 14.8 GW above the top of the Action Plan battery capacity range for 2030 and 61.7 GW above the projected battery system need in 2035.

This outcome has been driven by the number of ‘protection’ measures in the connections methodologies for well‑advanced projects, such as those with planning consent, Capacity Market agreements, or near‑term connection expectations. The protection measures included in the reforms were introduced to provide fairness for developers and to seek to maintain investability of near-term projects. But we recognise that the effect of these protections, coupled with the speed with which battery technologies can typically secure planning consents relative to other technologies, has resulted in a materially higher level of battery progression to Gate 2 than anticipated.

We are working closely with NESO and the network companies, as well as engaging with project developers, to understand the effects of the battery surplus, as part of our broader commitment to ensuring the reforms minimise costs for consumers and support the timely issuance of high‑quality, robust connection offers for all technologies in delivering our clean power and growth missions.

Our shared objective is to ensure that the connections process remains fair, robust and aligned to strategic needs, while safeguarding investor confidence and protecting the interests of consumers. We will continue to monitor the impact of the battery connection surplus on this objective and are considering options to safeguard the delivery of the connections process should significant risks be uncovered. As a first step, we have been engaging with network companies on practical mitigations, such as expanding the use of bay‑sharing, and are supportive of steps that can help manage the effects of the surplus while maintaining a fair and efficient process.

Given battery projects operate under a merchant business model without a dedicated support scheme, we recognise that some projects will likely leave the queue, and we note that some industry parties are already proposing measures via the code modification process to encourage this “attrition” through an additional financial measure, and that this modification proposal has now been granted urgency. It will be important to ensure that non-viable projects leave the queue before the network companies have committed significant capital expenditure, both for their connection and for any wider network reinforcement, and in good time to allow their capacity to be reallocated at the next connections window.  The later non‑viable projects leave the queue, the greater the risk of driving unnecessary network redesign, risking knock‑on impacts for other projects, and increasing costs for bill-payers. We therefore encourage project developers to review the viability of their project’s business case and to respond to their offer accordingly in a timely fashion.

We equally wish to reiterate our expectation that Gate 2 offers will be issued accurately, enabling developers to reach final investment decisions swiftly and supporting a credible pipeline for 2030 and beyond. Once offers are issued, we expect network companies to take a pragmatic approach to network build in delivering connections, reflecting the current surplus and likely attrition, and to assess funding commitments accordingly.

We note that NESO’s annual consultation on its connections methodologies sets out the possibility for the disapplication of protections under clauses 3a and 3b, such that only battery projects that have secured a revenue support scheme would be eligible in the next window. This would address further oversupply in future windows, as it is expected that an additional 8 to 20 GW of battery projects currently in Gate 1 could qualify for a Gate 2 offer. We also recognise that some Gate 1 battery projects may secure LDES Cap and Floor agreements, which would make them priorities for connection by 2030 to support delivery of Clean Power 2030 ambitions.

The consultation invites wider views on whether further steps should be taken to address the surplus of battery projects. We encourage all stakeholders to respond with their perspectives.

Both government and Ofgem remain committed to ensuring that the connections process is delivered efficiently and in a way that supports strategic priorities and maintains investor confidence. We will continue to work closely with all parties to monitor the impacts of the current battery connection surplus and to consider potential actions needed to support this process.

Thank you once again for your continued collaboration and commitment as we work together to ensure the connections process remains aligned with our collective ambition to deliver Clean Power 2030.

Minister Shanks

Akshay Kaul