Battery surplus complicates latest grid connections reform

Ofgem and the Department for Energy Security and Net Zero have issued a fresh industry update on electricity connections reform, setting out both the progress made in clearing the queue and the pressure now building around battery storage. The latest letter says 221GW of projects that had applied for firm connection agreements but were either no longer needed for 2035 or no longer progressing have been moved out of the main queue. Together with projects that self-selected into Gate 1, that has materially reduced the volume of capacity competing for near-term connection.

The update says current queue outcomes indicate that most technologies have sufficient capacity in the prioritised Gate 2 and Phase 1 queue to meet 2030 ranges. That marks a significant shift after years in which the connections process became clogged with dormant, speculative, or weakly progressed schemes. Delivery remains uneven, however. The letter says the programme has been delayed by historic data errors in connection agreements and by the need for NESO and network companies to rework network studies and planning. Ministers and the regulator have called for regular public reporting against the revised timetable as projects begin to receive offers.

The clearest imbalance now sits with batteries. The government and Ofgem say the queue outcomes show a high volume of storage projects advancing to Gate 2 relative to the capacity ranges set out in the Clean Power 2030 framework. Their figures put battery capacity still progressing at 14.8GW above the top of the 2030 range and 61.7GW above projected system need in 2035. The surplus is linked to protections built into the reform package for well-advanced projects, including schemes with planning consent, Capacity Market agreements, or near-term connection expectations. Those protections were intended to preserve fairness and investability, but they have also allowed more battery projects through than originally anticipated.

The reform programme has therefore moved from queue reduction to technology management and delivery discipline. The letter says practical mitigations are already being discussed with network companies, including wider use of bay-sharing where technically feasible. It also notes that industry parties are pursuing an urgent code modification intended to encourage non-viable battery projects to exit the queue through an additional financial measure. The regulator’s position is that schemes which no longer stack up commercially should not continue to absorb network capacity, studies, and reinforcement assumptions.

Batteries raise a different set of planning problems from slower-moving generation technologies. They can progress through planning more quickly, they are often developed on a merchant basis, and large volumes can cluster around the same network nodes. NESO’s current annual methodologies consultation has already highlighted the extent of that concentration, putting battery projects with Gate 2 status at 83.2GW, and the total of built, operational, or Gate 2 battery capacity at 90.6GW. The issue is no longer limited to processing applications faster. It now extends to how land, bays, studies, and reinforcement works are reserved for projects that are most likely to proceed.

The update also points to further tightening in future application windows. The current letter refers to the possibility of removing some protections for battery projects unless they have secured a revenue support scheme, while recognising that long-duration storage projects entering under cap-and-floor arrangements may require different treatment. That would give the queue a more active planning function, with progression tied more directly to system need and project maturity.

The immediate focus now shifts to offer quality and execution. Gate 2 offers must be issued accurately, and network companies are expected to take a pragmatic approach to build decisions while attrition works through the queue. The next phase of reform will be shaped less by the volume removed from the queue than by how effectively the remaining projects translate into buildable, financeable, and technically coherent connection pathways. Stakeholders wishing to comment further can access NESO’s current consultation on the connections methodologies.