Urgency granted for CMP428: User commitment liabilities for onshore transmission circuits in the holistic network design

What this is about

CMP428 tackles a specific financial problem created by the Holistic Network Design. Under the CUSC, generators connecting to the transmission network must post user commitment liabilities — essentially financial security deposits that protect consumers if a project pulls out after transmission infrastructure has been built or committed on its behalf. The issue is how these liabilities are calculated when the transmission circuits were not requested by the individual generator but were designed holistically by NESO as part of the HND.

The HND identifies the transmission reinforcements needed to connect the pipeline of offshore wind and other generation required to meet net zero targets. But the existing CUSC framework treats some of these circuits as "Attributable Works" — infrastructure attributable to a specific user. That classification drives up user commitment liabilities for individual generators, because they are being asked to underwrite the cost of transmission circuits that were designed for the system as a whole, not at their request. CMP428 proposes to remove onshore HND transmission circuits from the Attributable Works classification, which would reduce the financial security these generators must post.

Key points

- The problem is misclassification. Attributable Works are supposed to capture infrastructure built specifically for one user. HND circuits are built for the system. Classifying them as Attributable Works forces individual generators to post security against infrastructure costs they did not drive and cannot control. This is a property rights mismatch: the generator bears the liability but has no say in the design, routing, or specification of the circuit.

- Urgency was granted on 4 March 2024. Ofgem agreed that the modification meets its urgency criteria, meaning it will be fast-tracked through the CUSC governance process rather than following the standard timeline. The urgency request was made by National Grid ESO on 21 February 2024, roughly six weeks after the modification was raised on 11 January 2024.

- The financial stakes are material. User commitment liabilities for transmission circuits can run into tens of millions of pounds per project. For offshore wind developers connecting under the HND — where onshore transmission reinforcement costs are substantial — misclassified Attributable Works could inflate security requirements to levels that affect project financeability. This is not a theoretical concern: lenders and equity investors price these liabilities into their models, and inflated security requirements increase the cost of capital.

- This is a cost allocation question, not a cost reduction question. The transmission circuits still need to be built and paid for. The question is whether the financial risk of a generator withdrawing should be secured against the individual generator (via Attributable Works classification) or managed through the broader charging framework. Removing the Attributable Works classification shifts some risk from individual generators to the socialised cost base — which may be appropriate when the infrastructure was designed for system needs, but does mean consumers bear more exposure if projects fail.

- The modification applies to onshore circuits only. Offshore transmission (OFTO assets) has its own regime. CMP428 specifically targets onshore transmission circuits identified in the HND or future iterations of the HND. This scoping means the modification addresses the most acute mismatch — where onshore reinforcements are driven by system-level planning — without reopening the separate OFTO framework.

- The HND framework is still evolving. The first HND was published in 2022, with subsequent iterations expected as the connection pipeline changes. CMP428 references "future iterations of the Holistic Network Design," which means the fix is designed to persist as the HND is updated, rather than applying only to the current version.

What happens next

With urgency granted, CMP428 will follow an accelerated CUSC modification timeline. The modification will go to a CUSC Workgroup for development, but on a compressed schedule. Ofgem will make a final decision on whether to approve, reject, or send the modification to the CUSC Panel for a recommendation.

The practical effect, if approved, is that developers connecting under the HND will see lower user commitment liabilities for onshore transmission, reducing upfront financial security requirements and potentially improving project bankability. This matters most for the large offshore wind projects in the HND pipeline — AR5 and AR6 winners, ScotWind projects, and Celtic Sea leasing round developers — where onshore reinforcement routes are long and expensive.

Watch for interaction with the broader connections reform programme. NESO's ongoing work on the Connections Process Review and Ofgem's wider review of user commitment arrangements may supersede or extend the changes CMP428 introduces. The urgency grant suggests the current framework is creating immediate commercial problems that cannot wait for the broader reform to land.