Go-To Guide:
- The UK is transforming its grid connection system to address a backlog of over 739 GW of projects, aiming to streamline access and reduce delays.
- New reforms focus on prioritizing projects that are ready for development and essential for grid stability, eliminating the speculative applications.
- A structured gate-based queue process would be implemented, requiring projects to meet specific criteria to secure grid connection.
- NESO has temporarily paused new grid connection applications pending reform implementation, with certain exceptions.
- Investors and lenders may prioritize projects with secured grid access, potentially impacting valuations and project economics.
The UK’s grid connection system is undergoing its most significant transformation in decades. With 739 GW of projects stuck in the queue and over 1,700 new applications in 2023 and 2024 alone, the system has hit a breaking point, clogging the project pipeline and causing years-long delays.
Recognizing the urgency, the National Energy System Operator (NESO) introduced reforms to cut through the backlog and bring order to the chaos. These changes, now under review by the Office of Gas and Electricity Markets (Ofgem), are designed to prioritise viable projects, eliminate speculative applications, and fast-track grid access.
In February 2025, Ofgem gave in-principle approval to the reforms, launching a consultation that closed on 14 March 2025. A final decision is expected by the end of Q1 2025. These reforms would reshape the UK’s energy landscape if implemented, aligning with the government’s Clean Power 2030 Action Plan (CP30 Plan).
What might this mean for businesses? Let’s break it down.