How Ofgem’s Queue Management Policy Boosts Clean Energy Projects

Ofgem, the UK’s energy regulator, has introduced a new policy to speed up the connection of clean energy projects to the electricity transmission network. The policy, known as queue management, allows the removal of non-viable or stalled projects from the connection queue, freeing up capacity for ready-to-go generation and storage. This is a significant development for the UK’s energy landscape, as it supports the country’s net-zero targets and the transition to a sustainable energy system.

The queue management policy is a major change to the way projects seeking connection to the high-voltage transmission network are managed. Previously, the connection process was based on a first-come, first-served principle, which resulted in a long queue of projects that could generate almost 400GW of electricity – well in excess of what is needed to power the entire British energy system.

Many of these projects were either speculative or faced delays due to planning, financing, or technical issues. This created a bottleneck for new projects, especially those involving renewable energy sources, such as wind and solar, or innovative technologies, such as battery storage. These projects are essential for achieving the UK’s net-zero targets, which include 50GW of offshore wind capacity by 2030 and 70GW from solar by 2035.

The queue management policy aims to address this problem by introducing strict milestones and deadlines for projects at each stage of the connection process. These include securing planning consent, finalizing investment decisions, and completing construction. If a project fails to meet these milestones, it could be terminated by the electricity system operator (ESO), which is responsible for managing the connection queue. This would free up capacity for other projects that are ready to connect and deliver clean energy to the grid.

The queue management policy is expected to have a positive impact on the UK’s energy system in several ways. First, it will reduce the waiting time for new projects to connect to the transmission network, which can currently take up to 10 years. This will enable faster deployment of clean energy sources and technologies, which are crucial for decarbonizing the electricity sector and meeting the net-zero targets.

Second, it will improve the efficiency and reliability of the transmission network, which is facing increasing challenges due to the growth of intermittent and distributed generation. By removing non-viable or stalled projects from the queue, the policy will help avoid unnecessary or inefficient investments in network infrastructure, such as new lines or substations. This will save costs for consumers and network operators, and enhance the security of supply.

Third, it will stimulate innovation and competition in the energy market, by creating more opportunities for new entrants and diverse technologies. The policy will encourage developers to advance their projects and demonstrate their viability, or risk losing their place in the queue. This will create a level playing field for all projects, regardless of their size, technology, or location. This will foster a more dynamic and diverse energy mix, which can adapt to changing demand and supply patterns.

The queue management policy was approved by Ofgem on 13 November 2023, following a consultation process involving the ESO, the transmission owner for England and Wales (National Grid Electricity Transmission, or ET), the Scottish transmission owners, and the wider industry. The policy will be incorporated into the Connection and Use of System Code (CUSC), the framework governing the rules for connecting to and using the transmission network.

The policy will apply to both existing and future connection agreements, meaning that projects already in the queue will also be subject to the new milestones and deadlines. The ESO will publish guidance on how it will use its termination powers by 27 November 2023, and the first terminations are likely to happen as early as 2024.

The queue management policy is part of a broader strategy to reform the connection arrangements, which also includes the ESO’s five-point plan to unlock 20GW of connections capacity across the transmission and distribution networks. The strategy is supported by Ofgem and the government, which are due to publish a joint connections action plan later this month. The action plan will build on the recommendations of the Electricity Networks Commissioner, Nick Winser, who proposed measures to halve the time to build transmission infrastructure.

The queue management policy is a significant step towards a more efficient and effective connection process for the UK’s electricity transmission network. The policy will help clear the queue of non-viable or stalled projects, and speed up the connection of clean energy projects that are vital for the net-zero transition. The policy will also benefit the UK’s energy system by improving its efficiency, reliability, and diversity. The policy is part of a wider strategy to reform the connection arrangements, which involves collaboration between Ofgem, the ESO, the transmission owners, the government, and the industry.

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