Ofgem has proposed a financial commitment fee for battery energy storage projects holding places in Britain's grid connections queue. The regulator says speculative applications have left the queue around three times larger than projected needs. Under the proposal, developers would post security of £3,000 per MW, rising to as much as £25,000 per MW while oversubscription stays high.
Why the queue is oversubscribed
Around 90 GW of battery capacity is either operational or included in Britain's reformed grid connections queue, against an estimated 29 GW of electricity storage capacity that could be required by 2035. Ofgem said the queue remains roughly three times larger than projected requirements for the coming decade. That backlog makes it difficult for network operators to determine which projects are likely to proceed, and speculative applications can reserve limited grid capacity, potentially delaying projects that are ready to build and increasing uncertainty around future network investment.
A Korean-language report on the same proposal states that roughly 7 GW of battery capacity is operational, with a further 83 GW held as priority projects in NESO's reformed queue. It notes that NESO excluded around 40 per cent of transmission-connected battery project capacity during earlier connections reform for failing to meet criteria, yet oversubscription has continued.
How the commitment fee would work
The proposed Oversubscribed Technologies Commitment Fee would require battery storage projects to demonstrate financial commitment in order to retain their place in the connections queue. Developers would provide backing through mechanisms such as cash collateral, letters of credit or guarantees. The fee would initially be set at £3,000 per MW and could increase to as much as £25,000 per MW when the level of oversubscription remains high. A 100 MW battery project at the maximum rate would require £2.5 million, although security already provided above the new level would not need to be duplicated.
The mechanism would be activated when the capacity requested by a particular technology exceeds its targeted demand by more than 50 per cent, and would remain applicable until oversupply falls below 25 per cent. NESO would be responsible for monitoring oversubscription and determining when the fee should be introduced or adjusted. The fee is not a sunk charge: it is returned once a project connects and operates. Where money is collected from projects leaving the queue as a cancellation charge, Ofgem says it would be returned to consumers through reductions in network charges.
Wider reform and expected timing
The fee forms part of wider reforms to Britain's grid connections system, which are moving away from the traditional first-come, first-served approach toward prioritising projects that are ready to proceed and aligned with system requirements. Ofgem opened a consultation on the changes, with a final decision expected later this year. The proposal, known as CMP470, was raised by battery developer Field Energy in March 2026, and six alternative options covering different security levels, durations and co-located projects are also under review.
Separately, NESO has asked Ofgem for a one-month extension to issue the remaining Gate 2 Phase 1 connection offers, a delay that will push some grid connection dates into 2027 and beyond. The Gate system, with Gate 1 for early feasibility and Gate 2 for full connection offers, was intended to clear a backlog of speculative solar farm and battery schemes that held positions for years without building.
Planning approval and longer-duration storage
Planning approval for grid-scale battery storage increasingly runs through National Fire Chiefs Council guidance, which is not a statutory planning requirement but is referenced in Planning Practice Guidance and functions as the working standard applied by fire and rescue services and planning authorities. The updated guidance, approved for publication in December 2025, allows minimum spacing between units to fall to 0.914 m where a unit has passed UL 9540A testing, and requires developers to identify all sensitive receptors within a 1 km radius of the site.
Longer-duration storage is also being supported through public research funding. UKRI's clean energy mission is backing ultra-long duration energy storage technologies with a duration over 100 hours, including up to £13 million for electrochemical work and up to £15 million for underground hydrogen storage research, with aims including demonstrators over 100 MWh by 2030 and deployment on the grid at GWh scale by 2035.
Key Takeaways
Ofgem has proposed a financial commitment fee for battery storage projects holding places in Britain's grid connections queue.
Around 90 GW of battery capacity is operational or queued in Britain, against roughly 29 GW estimated as required by 2035.
The proposed fee would start at £3,000 per MW and could reach £25,000 per MW while oversubscription remains high.
NESO has asked Ofgem for a one-month extension to issue the remaining Gate 2 Phase 1 connection offers, pushing some dates into 2027.
Sources