A new financial penalty designed to force stalled generation projects out of Britain’s grid connections queue, will not be activated after NESO’s first assessment recorded 0MW against its trigger.
The Progression Commitment Fee is intended to stop developers holding valuable network capacity without making sufficient progress towards construction.
Under the mechanism, NESO measures the volume of generation capacity terminated from the reformed connections queue during a defined assessment period. The fee is only activated if terminated capacity reaches 6.5GW, signalling that significant numbers of projects are failing to progress after securing a place in the queue.
NESO’s first published measurement stands at 0MW, meaning the threshold has not been approached and developers will not currently need to provide additional financial security.
The figure does not mean Britain’s grid queue is empty or that every project is certain to proceed. It means no qualifying capacity has been counted towards the activation threshold during the first measurement period under the new arrangements.
If the fee is triggered in future, affected generation projects would initially have to lodge security worth £2,500 for every megawatt of requested capacity.
The commitment would rise by £2,500/MW every six months, reaching a maximum of £10,000/MW.
A 500MW project could therefore face an initial commitment of £1.25 million, eventually increasing to £5 million if it remained exposed to the maximum rate.
The money would form part of the financial security attached to a project’s connection agreement and could be forfeited if the developer failed to meet required milestones or withdrew.
NESO and Ofgem introduced the measure to make developers reassess whether projects remain viable, freeing capacity for schemes ready to invest and build.
The first 0MW reading shows the penalty is not yet required but establishes the baseline for future updates as Britain’s reformed connections queue begins operating.
