SP Transmission Connections Summit May 2024

We would like to say a huge thank you to everyone who attended our SP Transmission Connections Summit on Thursday 30th May 2024 at The Studio, 67 Hope Street. With over 100 attendees this event was a massive success, and we appreciate you giving up your time to spend it with us. We thoroughly enjoyed meeting you all in person!

As promised, we wanted to ensure you all received the slide pack that was presented on the day, you will find it at the bottom of this webpage.

We have collated the responses to the slido questions that were not able to be answered on the day below:

Ofgem

Q. Can the event provide insight into the Ofgem Needs Case process and which projects it would apply to (by elements of connection cost)

A. For ASTI projects Ofgem's reopener guidance is publsihed as part of the licence modification decision: https://www.ofgem.gov.uk/decision/decision-modify-special-licence-conditions-electricity-transmission-licences-accelerated-strategic-transmission-investment

For medium sized projects Ofgem's wider reopener guidance is here: https://www.ofgem.gov.uk/publications/re-opener-guidance-and-application-requirements-document-version-3 

Connections Reform

Q. Do SPT think that TMO4+ requirements for Gate 2 progression has struck the right balance? I wonder if meaningful accelerations can be achieved in SPT if the percentage of projects which already qualify for Gate 2 is too high

A. SPT believes that TMO4+ needs to be fair and create a level playing field for all technologies seeking to reach Gate 2 process. As it stands for Gate 2 criteria, lots of projects will meet the requirements, so in SPT’s view the criteria may be too low. We need to make sure it is equally as challenging for each type of technology to qualify, not necessarily all with the same requirements.  

Q. Will TMO4+ be applied north of the border? If so, when and will the same Gate2 criteria apply? 

A. Yes - TMO4+ would apply to all projects in GB. We are aiming to implement the TMO4+ reforms from January 2025. However, these timescales are dependent upon progress being made with the code modification working groups and Ofgem's decision making.

Q. It seems wasteful that QM might be changing 12 months after it was implemented. How do you avoid similar situations going forward?

A. As the proposals for Connections Reform are both wide reaching, are only a 'Minimum Viable Product' proposal and coming ahead of future policy developments such as the SSEP and REMA, we can expect future code and license changes.  As mentioned in our opening at the summit, one area where this is possible is the Gate 2 criteria and we  think this is an area where it is important to do it once and do it right with consideration given to future policy developments.   The purpose of TMO4+ is to ensure that the first projects that are ready are connected first - and remove 'zombie' projects from the queue. Any changes to QM as a result of TMO4+ would be in order to better deliver that objective. Beyond TMO4+ go live, we are considering further measures to align connections with other areas of energy reform (for example Strategic Spatial Energy Planning and REMA). The TMO4+ proposals are intended to be future proof to some extent to these, but some changes may be required as and when there is further clarity on other areas of energy reform and how they relate to connections.

Q. Will there be 2 different application fees for Gate 1 & Gate 2?

A. Yes, we expect different application fees for Gate 1 and 2. These would be cost reflective of work undertaken by ESO and TOs at each Gate. As part of the code modification process we are also keeping under consideration the use of additional financial instruments at Gate 1 (e.g. a capacity holding security to apply from Gate 1 through to Gate 2) to encourage only viable projects to enter and remain in the connections process.

Q. How do you anticipate the queue will be determined post gate 2?

A. SPT: The ESO propose that under Connections Reform the queue will be determined based on the date that a project gained it's evidence of meeting the Gate 2 Criteria (Land Option Secured) and the Gate 2 window in which you apply.

ESO: We are proposing that the Gate 2 queue is determined based on when projects have met the Gate 2 criteria

Q. What is the benefit of a developer sitting at gate 1 and paying the £/MW cost when everything is indicative anyways? Would it not be better for a developer to wait until they meet gate 2 criteria and go straight in at that level?

A. It is not determined that projects will be liable to a capacity holding security between Gate 1  and Gate 2. This is being discussed as part of the code mod working group process. Developers will be able to go through Gate 1 and Gate 2 at the same time. By going through Gate 1 earlier it allows the network to take account of the projects likely to go through Gate 2 later and thereby allows the networks to be better planned.

Q. How will connections reform impact existing connection offer securities? 

A. It is proposed that the existing securities will not be due at Gate 1. It is proposed that securities will be due from the point at which a project receives a firm connection offer post Gate 2. Securities will be calculated based on the current CUSC. No changes are being proposed to the methodology for this. However, as part of the code modification process we are also keeping under consideration the introduction of a new capacity holding security between Gate 1 and 2. 

Q. Will  TMO4+ gate 2 be LOA over land, planning application or planning grant?

A. We have proposed that Gate 2 will be set at the point at which land options for the relevant project are secured. For offshore projects this would be when a project enters in to an agreement for lease with the Crown Estate or Crown Estate Scotland.

Q. Since BESS takes up so much network generation capacity, shouldn’t they be restricted in favour of allowing real generation to connect (solar/wind)?

A. SPT: As a TO we recognise that under a first ready, first connected approach smaller, agile projects such as BESS are likely to be ready to connect first.  Therefore, we support further thinking and discussion around the Gate 2 criteria.  

ESO: The connections process operates within the context of the wider energy market. The future connections process will need to take account of reforms to that market, e.g. through REMA and Strategic Spatial Energy Planning. It is too early to tell exactly what the outcomes and impacts of those reforms will ultimately be. We have no plans within the minimum viable product (MVP) for TMO4+ to pre-empt the outcome of those reforms or to discriminate between different types of technology. However, we will continue to monitor developments and work through the Connections Delivery Board to consider whether further intervention beyond the MVP for TMO4 for would be merited.

Q. How will the short timescales impact resourcing within SPT and SPD as they may have to rerun curtailment studies across the distribution network and reissue offers?

A. The ESO's Connections Reform proposals are currently going through the Code Modification process and we are engaged in discussions on all aspects of these proposals.  The proposed timescales and impacts on our resourcing are of significant concern to us and we will continue to engage the ESO on this.  

Q. You mentioned you want to see the right technology for the grid area applying for connection in Gate 1. However, the answer will be known 6 months later, when Gate 2 criteria will be assessed. How can you provide appropriate signals to developers to apply for the correct technology during Gate 1?

A. SPT: The ESO's Connection Reform proposals and Ofgem's Connection Action Plan include a number of initiatives to improve the information and data provided to customers to inform their connection application.  In addition, it is proposed that the Coordinated Network Design Excercise at Gate 1 is published prior to the next application window.  Both of these things will provide additional information for developers. 

ESO: The purpose of Gate 1 is to provide timely signals to network companies as to where they should invest in designing and building network - hence Gate 1 will ask project developers where they would like to connect, their technology and capacity. Leaving the gathering of this information to Gate 2 risks delays in network design and build which ultimately could delay connection dates. In terms of the 'right technology for the grid area', we do not currently have any view on what technology should connect where - this is a decision for project developers and is influenced by a number of factors. As and when the SSEP is delivered, we expect this to be able to provide signals on where the system would benefit from particular types of technologies being developed.

Q. Surely an indicative POC makes it difficult to design or develop a site as the cable route/cost plays a big part in the projects feasibility?

A. The ESO's Connection Reform proposals do propose that detailed connection design and costs are developed at Gate 1, prior to the issuing of the indicative POC.  These would be progressed prior to the full offer at Gate 2.  

Q. Given the long list of applications for connections will there be a second round of voluntary removal without cancellation charges before gate 2 is applied to entire list 

A.  SPT: The ESO's 5 Point Plan included a TEC Amnesty.  There are no proposals to repeat this prior to the implentation of Connection Reform.  

ESO:This is not currently being considered.

Q. Will there be a time limit for how long a project can sit in Gate 1 without progressing to Gate 2. Will these projects be removed from Gate 1 entirely it doesn’t progress in a timely manner? 

A. SPT: The ESO's Connection Reform proposals do not currently propose a time limit for how long a project can hold a Gate 1 offer without progressing to Gate 2.  The ESO have proposed a Capacity Holding Security to encourage project progress from Gate 1 to Gate 2.  These proposals are subject to the urgen code modification process under CMP434/CM095 and could be subject to change. 

ESO: We are not currently proposing a limit for how long projects can take to go through Gate 2 after fulfilling the Gate 1 requirements; however, this has been a topic of discussion in code modification working groups and therefore may appear in the code mod consultation. 

Q. Are the gates applicable to demand only connections? If so, is this appropriate?

A. Yes - the TMO4+ process will apply to both generation and directly connected demand connections. We do not currently see a reason to treat these projects differently, and there are benefits to a coordinated approach.

SPT

Q. With more larger scale projects crossing TO borders eg HNDs, which requires shared design and planning interfaces between SSENT to SPT and SPT to NGT, do SPT think the systems in place to work with each other are optimal? Can they be improved or comms digitalised on the NGESO portal between TOs?

A. There is already lots of work being done relating to data to help customers self-serve, and to raise questions. The ESO uses Salesforce, and this has recently been implemented within SPT to help cross some of those boundaries of information. We launched our Transmission Generation Heat Map last year and we are now working with the ESO as it develops its Single Digital View tool, which will be made available to customers this year.

Q. How have discussions between SPT and Ofgem on RIIO T3 incorporated the ESOs connections reform proposals - especially triggering Anticipatory Investment based on a (likely) speculative connections queue at gate 1

A. The investments that are included within the RIIO-T3 price control are determined within a baseline. As the price control will be implemented for 5 years from April 1st 2026, timelines for many of our projects are incompatible and therefore will depend on uncertainty mechanisms agreed for T3. The ASTI framework will be the template for the new major projects regime, to be used where appropriate. We don't have certainty in the projects that will ultimately connect so there is a decision to make around Strategic Investment, particularly impacted by the timings of securities. 

Q. What is SPT's view on the use of non sf6 GIS switchgear to minimise substation footprint size and limit the impact to local communities? Are alternatives to sf6 (eg GE's 'g3') seen as mature enough now?

A. There is already the beginning stages of implementation for SF6 free switchgear, with new substations being designed with this technology as standard. The new Branxton 400kV substation is being designed with 22 bays of SF6 free GIS switchgear.

Q. Could we have an organogram of the contacts, responsibilities in different regions.

A. Unfortunately, this isn't something we are able to share. However, if you are looking to contact someone within SPT please feel free to contact us at transmissionconnections@spenergynetworks.com 

Q. Surely GSP’s with over subscription take president over the ones with no connection queue? Or are they all in line for LMS upgrades?

A. Over subscribed GSPs do take precedent and we (SPEN) are actively installing at GSPs with contracted capacity in excess of the firm capacity.  
We will only install an LMS where the firm capacity is being exceeded, it wouldn’t be prudent to spend money at GSPs where we may never see large Distributed Generation penetration.

Q. Can you please explain what you understand by the phrase “digital substation”?

A. These are substations whose protection and control systems are based on the IEC61850 series of standards. 

Q. What are the TOs doing to increase the amount of new cable manufacturing facilities in the UK and build a UK supply chain? How much is this a priority vs speed of deployment? 

A. We are in discussions with a range of manufacturers on our future equipment requirements however their decision to locate manufacturing facilities in different geographies is subject to a range of factors including labour availability, supply of raw materials and transport.  The UK government announced the GIGA Fund (Green Industried Growth Accelerator) which is design to support supply chain growth and we have engaged with a number of manufacturers to support options they are considering as part of this.

Q. Why do the three TOs take different views on how to apply the CPAs that are given by the ESO? 

A. We are unable to provide a view on behalf of the other TOs. However, the ESO are happy to provide further detail if you contact them at box.customerservice@nationalgrideso.com