Ofgem has approved the National Energy System Operator’s (NESO) proposed amendments to the Connections Network Design Methodology (CNDM), which aim to improve the connections process ahead of the Gate 2 to Whole Queue (G2tWQ) formation exercise under the TMO4+ reform package. These changes include adjustments to advancement checks, import/export treatment for storage systems, reclassification of reactive compensation, and updates to 0 MW onshore wind transmission zones. Ofgem deemed a formal consultation unnecessary due to the limited scope and minor impact of the amendments but emphasised that future changes should generally follow the annual review and consultation process set out in the licence.

Ofgem has published two decisions approving National Energy System Operator (NESO)’s proposed amendments to the terms and conditions related to balancing ser-vices in the power system.

Ofgem has approved the outcome of the National Energy System Operator (NESO)’s April 2025 review of the GB Pricing Methodology (PM), confirming that it remains compliant with the requirements of Articles 6(4) and 6(14) of Regulation (EU) 2019/943 (the Electricity Regulation). The GB PM governs the pricing mechanisms used for the settlement of balancing energy. The updated PM (version 2.0) takes immediate effect, and NESO must publish it on its website as soon as practicable. The next review is due within three years.

Ofgem has approved the Original Proposal of CUSC modification CMP448, introducing a Progression Commitment Fee (PCF) for projects in the Gate 2 connections queue that have not yet passed Milestone 1 (M1). The reform complements the TMO4+ connections package by incentivising timely viability assessments and orderly queue progression. The PCF will remain dormant until an activation threshold of 6.5GW of terminated network capacity is reached, after which NESO may activate the fee subject to Ofgem oversight. The PCF will apply from 2 January 2026, with a six-monthly escalation profile and a cap of £10,000/MW. Ofgem confirms that activation will only occur where required to protect queue health and the delivery of Clean Power 2030 (CP2030) targets.

Ofgem has approved the Retail Energy Code (REC) R0043 proposal which seeks to amend the REC to ensure that the Crowded Meter Room Coordinator (CMRC) is set up as a new role code to send market messages and send and receive information between the Energy Supplier and/or the Distribution Network Operator or Independent Distribution Network Operator. This will form part of a complete solution for crowded meter room solutions when combined with the previously approved Distribution Connection and Use of System Agreement Change Proposal which established permissions to undertake works to install smart meter equipment. Ofgem has concluded that the implementation of the change will better facilitate the achievement of the applicable Objectives of the REC and approving the change is consistent with their principal objectives and statutory duties.

Ofgem has approved code modification R0287 to the Retail Energy Code (REC) and rejected the alternative proposal, R0287A. Ofgem determined that R0287, the original proposal, more effectively facilitates the REC objectives. Under the approved modification, REC Schedule 1 and Schedule 23 will be amended to clarify that annulments may only be used in scenarios where the consumer has not entered into a contract with the gaining supplier and asks the losing supplier to prevent the switch from taking place. Ofgem explained that this modification addresses inconsistent interpretations of the annulment process across the industry, which have led to disputes regarding its application. The modification will take effect on 27 February 2026.

Energy analysis: On 15 April 2025, Ofgem approved the package of grid connection reforms put forward by the National Energy System Operator (NESO) to overhaul the process for obtaining connections to Great Britain (GB)’s electricity transmission and distribution networks. The approved reforms, collectively termed ‘TMO4+’, mark one of the biggest shake ups to the GB grid connections process since its inception and will have significant consequences for electricity generation, storage and demand projects seeking to connect to GB’s electricity networks, both now and in the future. The Lexis+ Energy team provides a high-level summary of the reforms and considers the next steps for implementation.

Ofgem has approved Uniform Network Code (UNC) Modification 0887, enabling bi-directional flows between the National Transmission System (NTS) and Independent Gas Transporters (IGTs). Raised by National Gas Transmission on 18 July 2024, the modification provides for new unmetered bi-directional connection points on the NTS to IGT pipelines and sets out the associated commercial transportation arrangements for these points. Ofgem notes that the change will secure effective competition and support the introduction of renewable biomethane gas into the network. The implementation date is yet to be confirmed by the UNC code administrator, the Joint Office of Gas Transporters.

Ofgem has published a decision, approving an additional £5.115m in Network Innovation Allowance (NIA) funding to support National Gas Transmission (NGT)’s hydrogen innovation projects during the RIIO-2 period. The funding will support five key workstreams: materials testing, operational procedures, safety approaches, measurement and control, and digital tools.

Ofgem has approved early construction funding (ECF) for electricity transmission projects in Scotland, completing early funding decisions for all 26 projects under its Accelerated Strategic Transmission Investment (ASTI) programme launched in 2022. The approved projects include the Denny to Wishaw 400kV reinforcement project, Tealing-Kincardine upgrade project, and eight Scottish Hydro Electric Transmission projects. ECF enables transmission operators to finance early procurement of substation components and HVDC cables, strategic land purchases and early construction activities including design work and surveys. The projects are intended to increase transmission capacity for renewable energy and reduce constraint costs when wind farms are paid not to generate due to grid capacity limitations. Planning consent for the schemes remains subject to consideration by relevant planning authorities, with projects expected to deliver consumer benefits by 2030 subject to planning approvals and construction programmes proceeding as scheduled.

Ofgem has published a decision, approving the extension of the connections reform transitional arrangements, following a request from the National Energy System Operator (NESO) and Transmission Owners (TOs). NESO and the TOs will continue to implement and administer the transition process until 10 June 2025, when the reforms take effect.

Ofgem has approved the modification outlined in the modification proposal for Uniform Network Code (UNC) 0841: Introduction of cost efficiency and transparency requirements for the Central Data Service Provider budget (UNC0841). After considering the modification proposal, the Final Modification Report and the responses to the industry consultation, Ofgem concluded that the implementation of the modification proposal will better facilitate the achievement of the relevant objectives of the UNC and directed that the modification is consistent with its principal objective and statutory duties.