IN Brief:
- Ofgem is minded to approve an Oversubscribed Technologies Commitment Fee for eligible battery projects in the connections queue.
- Around 90GW of battery capacity is operational or retained in the reformed queue, against a projected requirement of about 29GW by 2035.
- The proposed commitment begins at £3,000/MW and could rise to £25,000/MW where oversubscription remains severe.
Ofgem is proposing a new financial commitment for battery energy storage projects in Britain’s electricity connections queue as the regulator attempts to reduce the amount of prospective capacity occupying grid positions without clear evidence that it will be built.
The regulator is consulting on its minded-to position to approve Connection and Use of System Code modification CMP470, which would introduce an Oversubscribed Technologies Commitment Fee. The mechanism is designed for technologies whose queued capacity materially exceeds the relevant government capacity target.
Ofgem says around 90GW of battery capacity is either operational or retained in the reformed connections queue, compared with a projected requirement of around 29GW by 2035. Its supporting figures comprise approximately 7GW already operational and 83GW still prioritised in the revised queue.
The proposal would require qualifying projects to provide a minimum level of financial security starting at £3,000/MW. The commitment could rise to a maximum of £25,000/MW if oversubscription remains sufficiently high, increasing the cost of retaining a connection position for projects that have not yet reached construction.
Under the original CMP470 proposal, the mechanism would activate when the relevant technology exceeds its target requirement by more than 50% and cease once the oversubscription level falls below 25%. NESO would monitor those levels and manage the associated financial securities through existing user-commitment arrangements.
The queue problem has a direct engineering consequence because transmission owners, distribution networks, and NESO plan future infrastructure against projects expected to connect. A large battery can require new substation bays, transformers, cable circuits, protection systems, metering, controls, and upstream reinforcement long before the battery containers themselves arrive on site.
If network capacity is reserved for schemes with little prospect of construction, other generation, demand, and storage projects can face later dates or more extensive reinforcement. Connection studies can also be distorted by capacity that appears in the planning assumptions but eventually disappears from the programme.
Battery storage creates a particular challenge because development pipelines can expand more quickly than network infrastructure. Once a developer has secured land, planning, and a grid application, the underlying storage technology is comparatively modular and can be procured in large blocks, encouraging several competing projects to seek connection capacity around the same substations.
The commercial role of those projects is not identical. Batteries can trade wholesale electricity, provide balancing and frequency services, participate in capacity arrangements, manage constraints, or combine several functions. Their usefulness to the system also depends on location, duration, response capability, availability, and the voltage level at which they connect.
A simple megawatt comparison therefore does not describe the complete storage requirement. A 100MW battery capable of sustaining output for one hour contributes 100MWh of stored energy, while a four-hour project at the same connection rating provides 400MWh. Both occupy 100MW in headline queue statistics despite having different capability during extended periods of system stress.
CMP470 is consequently aimed at queue credibility rather than deciding which battery designs should be built. Developers that retain positions would have to demonstrate greater financial commitment, while those no longer willing to support the cost of their place could withdraw and release network capacity earlier.
Projects whose existing securities already exceed the applicable fee would not necessarily have to provide additional security solely because of CMP470. Ofgem also says money collected through cancellation charges where projects leave without energising would ultimately be returned to consumers through transmission network charges.
The approach adds another financial milestone to a connections regime already being reshaped around projects considered ready and needed. A credible battery developer may have land rights, planning permission, equipment procurement, finance, and an operating strategy in place while still waiting on major grid works, so the commitment test has to distinguish speculative capacity from projects delayed by infrastructure outside their direct control.
There is also a financing consequence. Requiring additional security increases the amount of capital tied up before a project begins earning revenue. That is intended to deter weak applications, but it can affect the economics of otherwise viable developments if connection dates remain several years away or network reinforcement costs continue to change.
For network planners, a smaller queue would be useful only if it becomes more representative of actual delivery. Equipment lead times, planning conditions, investment decisions, supply-chain constraints, and market revenues can still alter construction programmes after a developer has passed a financial test.
Ofgem’s consultation closes on 1 October, with a final decision expected later in 2026. Britain’s electricity system still requires substantial additional storage; CMP470 is intended to reduce the difference between that requirement and a connections queue whose present scale gives network companies limited confidence over which battery projects will ultimately reach energisation.
