Grid Reform – TMO4+

Energy Secretary Ed Miliband:

"Too many companies are facing gridlock because they cannot get the clean energy they need to drive growth and create jobs. 

These changes will axe ‘zombie’ projects and cut the time it takes to get high growth firms online while also fast-tracking connections for companies delivering homegrown power and energy security through our Plan for Change. 

In an uncertain world, our message to the global clean energy industry is clear; come and build it in Britain because we are a safe haven. If you want certainty, stability and security when it comes to your investments, choose Britain."

On 15 April 2025, Ofgem published its decision to approve the National Energy System Operator's (NESO) grid reform package (TMO4+) to address the current connection queue across the transmission and distribution networks in Great Britain. This queue contained approximately 770GW of capacity as of January 2025, which represents far more generation capacity than is required to achieve a clean power system by 2030 according to National Grid's modelling. The grid reform process seeks to reorder and reduce this queue in order to prioritise projects based on their readiness, and strategic alignment with system requirements. Ofgem's approval is the culmination of several years of development and consultation with industry, and provides much-needed clarity on timelines and the new process for grid connections. Our previous article on Unblocking the bottleneck reforming the grid connections regime explored the initial action plans set out by Ofgem, Department for Energy Security and Net Zero (DESNZ) and NESO in 2023. 

A key part of the grid reform package is the application of the new readiness and strategic alignment criteria to almost the entirety of the current connection queue. This represents a one-time measure that seeks to re-order that queue and which will impact thousands of projects. NESO has confirmed that the application window for projects to submit their evidence to meet the readiness and strategic alignment criteria will open on 8 July 2025 and close on 29 July 2025 at 23:59hrs. The outcome of this process could have a significant impact on a project's viability, or conversely could result in a project obtaining an earlier/more beneficial connection. It is therefore vitally important that stakeholders within these affected projects compile and submit their evidence within the application window, or risk losing their grid connection. We also note that NESO has commented recently that earlier applications within the first two weeks of the application window are more likely to be given more time to correct any errors, make any clarifications, and if necessary, update their proposal for resubmission.

Trowers & Hamlins' Energy and Sustainability team is vastly experienced in the UK renewables sector over the past 15 years and regularly advises developers, funders and other stakeholders on their grid connection arrangements across a wide variety of scenarios. This includes advising on the implementation of the proposed grid connection reform for various UK projects currently in development, from small-scale distribution connections and microgrid projects to some of the largest projects connecting to the transmission network. 

If you are working with projects affected by grid connection reform or would like to discuss the connection reform package in further detail, please get in touch with our Energy and Sustainability team.

The remainder of this article briefly summarises the development of the reform package concluding with Ofgem's approval and the launch of the TMO4+ grid reform process.

Interim reforms – queue management milestones, TMO4 and government action plans

Prior to Ofgem's recent decision, Ofgem and NESO had set out action plans and interim reforms seeking to address the growing connection queue. These were implemented through various measures including the introduction of a new 'Queue Management Process' by approving a modification of the Connection and Use of System Code (CUSC). Code Modification Proposal (CMP) 376 came into effect on 27 November 2023, and changed the previous 'first come, first served' model to allow the system operator to terminate contracted projects that are not progressing against prescribed project 'Milestones' such as obtaining planning permissions and securing land rights. 

The previous UK Government also set out measures to improve network planning, and reduce lead-times in building new transmission infrastructure, as part of the Transmission Acceleration Action Plan. In particular, it introduced the Strategic Spatial Energy Plan (SSEP) that aims to provide comprehensive network planning in order to: (i) inform more targeted decisions for connections; and (ii) provide a more coordinated and anticipatory approach to network design and planning efforts across the energy industry.

TMO4 – the preferred path

In December 2023, NESO published its Final Recommendation Report advocating for the Target Model Option 4 (TMO4) grid reform package. This introduced a 'Gated Process with an early window' model:

• Gate 1 – provides connection offers with indicative terms, conditional on a project demonstrating 'readiness' and based on a co-ordinated network design connection gate; and
• Gate 2 – provides firm connection offers with confirmed terms for projects that meet 'readiness' criteria.

In conjunction with the TMO4 grid reform package, the Government also proposed a new draft of their latest Planning and Infrastructure Bill (the Planning Bill). The Planning Bill seeks to facilitate the delivery of new homes and critical infrastructure. The Bill serves as enabling legislation providing the relevant authority with the powers to modify conditions of electricity licences. The Planning Bill will provide time limited powers on the Secretary of State and Ofgem to enable prioritisation of the connections queue, allowing for direct amendments to the electricity licences and qualifying connection agreements to improve management of the connections to the electricity transmission and distribution systems. These powers are intended to be used if the existing connections reform processes faces significant delays or fails to deliver intended benefits. Through the Planning Bill, the Secretary of State and Ofgem can direct NESO and the Distribution Network Operators (DNOs) to make changes to prioritise projects based on strategic plans (such as the Clean Power 2030 Action Plan (CP30 Action Plan)).

Enduring reform – TMO4+

In April 2024, NESO proposed a variation to the chosen target model, known as TMO4+. This amendment changed the criteria for Gate 2 requiring projects to be both 'ready' (as was already the case) and 'needed' to receive a firm connection date or to retain their position in the queue. Under TMO4+, NESO will also apply the Gate 2 Criteria (described further below) to all projects with existing offers as a one-off exercise (known as Gate 2 to Whole Queue or G2tWQ) to re-order the queue based on whether they are 'ready' and 'needed'. Where projects do not meet the criteria, they may be removed from the queue or offered a Gate 1 indicative offer instead. This process is intended to re-form the existing queue to free up capacity and promote the early delivery of successful projects. 

These changes prioritise projects that are both ready and strategically needed, as follows:

• Ready – projects must meet Readiness Criteria. This can be satisfied through either the land rights or planning route:
  • Land Rights: projects will need to provide evidence of secured land rights (usually an option, existing ownership or lease arrangement), along with a red-line boundary for the secured land. Projects will also have to meet minimum acreage requirements based on a technology dependent energy density.
  • Planning: projects will have to evidence a valid application for planning consent under the Development Consent Order process (or other planning processes required for Compulsory Purchase Orders).

• Needed – projects must meet the Strategic Alignment Criteria. This can be satisfied through one of 4 routes:
  • Protected Projects:
    • As originally published, this primarily covered projects due to connect in 2026 (subject to meeting certain Queue Management milestones) and following a final recommendation from Ofgem, as noted below, these protections have been extended to also cover projects contracted to connect on or before 31 December 2027.
    • that are significantly progressed e.g. with planning applications submitted by 20 December 2024, or that have secured CfD or Capacity Market contracts and that also have a contracted connection date of 31 December 2027.
    • that have submitted planning applications before the G2tWQ application window (but consent was obtained after). Depending on when planning consent is obtained these projects may need to reply in a future application window. Also note that this protection Clause 3 process has been updated further as noted below
  • Alignment with CP30 Action Plan:
    • The project must be within the technology dependent capacity range for 2026-30 (Phase 1) or 2031-5 (Phase 2). This sets nationwide and localised thresholds for deployment of technology classes (e.g. solar generation). Projects that exceed these capacity range thresholds for Phase 1 will be considered against Phase 2 capacity ranges.
    • Capacity ranges may be revisited, especially following publication of the Strategic Spatial Energy Plan Centralised Strategic Network Plan and Regional Energy Strategic Plans and there is potential for substitution across zones.
  • Designated projects: NESO can designate projects that will provide significant benefit to electricity consumers – current indications suggest a high threshold to meet this requirement, but early indications suggest this will include:
    • Projects that are critical to security of supply of system operation.
    • Projects that reduce network constraints.
    • Innovative technologies not within the scope of the CP30 Action Plan and which are not wave, tidal, non-GB generation or transmission-connected demand.
    • Long lead time projects.
  • Projects outside of the scope of the CP30 Action Plan: this includes transmission connected demand, wave, tidal or non‑GB generation.

In line with the above, the Gated Process has also been updated under TMO4+:

• Gate 1 – indicative offers for transmission connections only and applies to new and existing applicants/customers. Existing projects that are either not ready or not needed will have their contracts varied with a conditional offer providing for an indicative connection date and location. New applications will be needed in the future application window.

• Gate 2 – provides firm offers for transmission and distribution generation that apply to new and existing applicants/customers. Projects will need to meet the readiness and strategic alignment criteria and will be offered a Gate 2 contract. Projects that are unable to meet the relevant criteria may be offered a Gate 1 offer instead.

Ofgem's decision on grid reform

On 15 April 2025, Ofgem approved the updated TMO4+ reform package proposed to Ofgem by NESO on 20 December 2024 with some modifications from Ofgem's minded-to position published in February 2024. These are as follows:

• Licence changes – Ofgem approved changes to the Electricity System Operator Licence, the Transmission Standard Licence and the Distribution Standard Licence to enable the changes in the grid reform package.
• CUSC Modification Proposal CMP434 – Ofgem approved the WACM2 modification to CMP434 introducing the Gated processes to new connection applications. WACM2 includes firmer obligations on DNOs/IDNOs and removes the reasonable endeavours wording on the obligations to submit information to NESO within 5 and 15 business days after the closure of the Gate 2 Application Window. Instead, timescales specified in the gated application and offer apply. Ofgem have also removed the addition of a pause to allow users to self-regulate following the publication of a Gate 2 Register.
• CUSC Modification Proposal CMP435 – Ofgem approved NESO's proposal introducing the Gate 2 Criteria to existing connection agreements.
• STC Modification Proposal CM095 – Ofgem approved the NESO's proposal to modify the STC to allow for CMP434 and CMP435 to be implemented.
• Connection Methodologies – Ofgem approved the three Connection Methodologies:
  • Gate 2 Criteria Methodology – updated Gate 2 Criteria Methodology as published by NESO on 21 March 2025, including the Readiness and Strategic Alignment Criteria.
  • Connections Network Design Methodology – including processes for NESO and network companies to determine the make-up and order of the connections Gate 2 queue and to coordinate connection offers.
  • Project Designation Methodology – allowing for projects that can deliver significant net zero, system or consumer benefits to connect. This will enable connections that are critical to security of supply, critical to the system operation, materially reduce system/network constraints or are highly innovative.

Ofgem has also provided additional recommendations which were implemented by NESO on 30 April 2025:

• Extending Protection Clause 2a (where significantly progressed projects, such as those with planning application submitted on or before 20 December 2024 or projects with regulatory approval in the form of Cap and Floor agreements, receive Gate 2 offers) to apply to eligible projects with existing agreements to connect on or before 31 December 2027 thereby protecting such projects and allowing them to retain their connection point/date; and
• Simplify Protection Clause 3 so that projects that:
  • submitted planning application on or before 20 December 2024;
  • have no planning outcome by the closure of the CMP435 application window; and
  • achieve planning consent after the closure of the CMP435 application window, are eligible to receive Gate 2 terms in a future CMP434 window even if this would breach zonal or national permitted capacities for a particular technology class.

Timeline for implementation

While the full timescale for implementation is yet to be published (and is likely to be subject to ongoing change), Ofgem and NESO confirmed a high-level timeline going forward:

• 8 July 2025: Gate 2 evidence submission window to open from Tuesday, 8 July 2025 and will close on Tuesday, 29 July at 23:59hrs.
• September 2025: NESO to indicate to projects whether they have been successful in securing a place in the reformed queue.
• Autumn 2025: NESO and network companies to issue revised offers with an initial focus on those connecting in 2026 and 2027.
• End of 2025: NESO to work to open the next window for new applications looking beyond the current connection queue to future generation, storage and demand growth.
• Early 2026: all offers up to 2030 will be prioritised to support achieving Clean Power by 2030 with the goal of issuing all 2030 Gate 2 offers by early 2026.