Decision on CMP411: Introduction of Anticipatory Investment (AI) within the Section 14 charging methodologies
Summary
Ofgem approves CMP411, introducing Anticipatory Investment (AI) into Section 14 charging methodologies for offshore transmission. The mechanism allows Offshore Transmission Owners to build grid capacity ahead of confirmed customer demand and recover costs through charges. Decision takes effect immediately on 28 March 2024.
Why it matters
This shifts investment risk from developers to consumers — OTOs can now build speculatively and socialise costs through network charges. The reform addresses connection delays by allowing supply-led investment, but creates moral hazard by removing price signals that would otherwise discipline over-investment.
Key facts
- •Decision approved 28 March 2024
- •Applies to Section 14 charging methodologies for offshore transmission
- •Allows OTOs to invest ahead of confirmed demand
- •Costs recovered through socialised network charges
Timeline
Areas affected
Related programmes
Memo
Decision on CMP411: Introduction of Anticipatory Investment (AI) within the Section 14 charging methodologies | Ofgem Please enable JavaScript in your web browser to get the best experience. BETA This site is currently in BETA. Help us improve by giving us your feedback . Close alert: Decision on CMP411: Introduction of Anticipatory Investment (AI) within the Section 14 charging methodologies Publication type: Decision Publication date: 28 March 2024 Topic: Offshore electricity transmission Print this page Share the page Share on Facebook Share on Twitter Share on LinkedIn CMP411 seeks to introduce Anticipatory Investment (AI) and a mechanism for the recovery of AI costs within the Section 14 charging methodologies. The Authority approved this modification on 28 March 2024. Main document CMP411 Decision [PDF, 248.84KB] Print this page Share the page Share on Facebook Share on Twitter Share on LinkedIn Close