Questions for Stakeholder Feedback on Draft Early Competition Documents (1)

## What this is about

NESO is consulting on the four documents that will govern how transmission projects get competitively tendered under the CATO regime. Early competition means that instead of the incumbent transmission owner (National Grid, SSEN, SPT) automatically building a new transmission asset, NESO runs a tender and a third party can win the right to design, finance, build and operate it.

The legal framework has existed since the Electricity (Criteria for Relevant Electricity Projects) (Transmission) Regulations 2024. What has been missing is the operational machinery: how does NESO decide which projects are suitable for competition? What does the tender package look like? How are bidders qualified and scored? These four documents are that machinery.

The timing is driven by the tCSNP2 Refresh — the transitional version of NESO's centralised network plan. That plan will recommend a set of transmission projects. NESO needs the appraisal method ready so it can assess which of those projects should be tendered competitively rather than handed to incumbents. The documents are drafts, and NESO is asking whether the framework is workable before it gets locked in.

This matters because the CATO framework will determine the boundary between monopoly delivery and competitive delivery for transmission build. Every project that clears the appraisal method goes to tender. Every project that doesn't stays with the incumbent TO on regulated returns. The design of the appraisal criteria, the PQ threshold, and the ITT scoring weights will shape who can compete, what gets competed, and whether competition actually delivers lower costs.

---

## Questions being asked

NESO has posed questions across the four documents. They fall into five themes.

Project appraisal method

These questions determine which projects NESO selects for competitive tendering.

- Do you have any general comments or concerns about the proposed project appraisal methodology? - Do you consider the proposed appraisal process to be transparent and comprehensive? - Do you agree with the factors included in the longlist and shortlist appraisal stages? Do you consider that the method by which each factor will be assessed is appropriate? *[This is asking whether NESO's screening criteria are the right ones — wrong factors here means the wrong projects get tendered.]* - Are there any additional factors you believe should be included in the longlist or shortlist appraisal stage? - What are your thoughts on the proposed method for estimating the likely delivery programme for a CATO? *[NESO must estimate whether a CATO can deliver to the required timeline. If the estimate is too pessimistic, projects default to incumbents. Too optimistic, and tenders fail.]* - Do you agree with the factors for prioritising projects for early competition? Are there others that you think should be considered?

Tendered scope of works

These questions address the tender package that bidders receive — whether it contains enough information to bid credibly.

- Is the document clear and understandable? Do you have any suggestions for improving the structure or content of the document? - How well does the document explain the underlying reasons for the project need? - Is the information that will be provided in the Tendered Scope of Works document sufficient for preparing a compliant bid? If not, what other information do you think needs to be provided? *[The critical question. If the scope document is too thin, only incumbents who already know the network can bid competitively. Information asymmetry kills competition.]* - Is there any information in the draft Tendered Scope of Works document which you consider to be redundant?

Pre-qualification: barriers to entry

These questions test whether the PQ stage filters appropriately or screens out viable competitors.

- Are there any questions that you think are unclear, or are you uncertain what is being asked for? - Does the Pre-qualification Questionnaire ask for anything that you could not provide and/or that would prevent you from submitting a passing response? *[NESO is directly asking potential bidders whether the PQ requirements are a barrier to entry. This is the question to answer honestly.]* - In your opinion, are the evaluation criteria clear and easy to understand? - Do the questions relating to bidder's experience and capability adequately allow for you to demonstrate your ability to deliver the Qualifying Project? - Are there any other areas of expertise that you consider should be assessed at the PQ stage?

ITT design and scoring

These questions address how bids are evaluated — the weights, thresholds, and pass/fail boundaries that determine who wins.

- Are there any questions that you think are unclear, or are you uncertain what is being asked for? - Do any of the ITT questions ask for anything that you could not provide and/or that would prevent you from submitting a response? - In your opinion, are the evaluation criteria clear and easy to understand? Do you believe that they will enable fair and transparent scoring of tender responses? - Are the broad topic areas being assessed by the ITT questions correct? Do you think any important areas have been missed? - Do you agree with NESO's proposed weighting to be assigned to each of the ITT questions? *[The weighting determines what NESO values. If cost is weighted too low, you get gold-plated solutions. If technical design is weighted too low, you get cheap builds that fail.]* - Are the page limits set for the ITT questions realistic? *[Page limits constrain how much a bidder can demonstrate. Too short favours incumbents who can be terse because evaluators already know them.]* - Question 1 mandates that at least three corridor options are to be considered as part of the qualifying bidder's option assessment — do you think this is appropriate? *[Requiring three corridor options adds significant cost to bid preparation. If the network need clearly favours one corridor, this is wasted effort that falls on bidders.]* - Question 2 and Question 11.3 are proposed to be marked on a pass/fail basis rather than being scored — do you think this is appropriate? Do you believe that additional value can be demonstrated by a qualifying bidder that would merit either of these questions being scored? *[Pass/fail means no differentiation — you either meet the bar or you don't. Scoring means better answers get rewarded. The choice affects whether bidders invest in those areas.]* - Considering the stage at which the tender process will take place, do you agree with the level of detail being asked for by Question 9 (Operation and maintenance)? Would you be able to evidence your responses? *[NESO is asking whether requiring detailed O&M plans at tender stage is premature — the project may be years from operation.]* - In your opinion, should qualifying bidders be expected to achieve a minimum score on each or any question, with failure to achieve that score meaning exclusion from the tender process? If so, please explain your reasoning. *[Minimum score thresholds reduce the risk of a bidder winning on cost alone despite weak technical capability. But they also reduce the competitive field.]*

Access to specialist support

- Do you foresee any difficulties or barriers to obtaining specialist support (where needed) to respond to any of the ITT questions? If so, do you believe that there is anything that NESO could do to facilitate qualifying bidders obtaining this support? *[Transmission projects require environmental, planning, and engineering specialists. If the same small pool of consultants is conflicted out by working for incumbents, new entrants cannot bid.]*

---

## How to respond

Deadline: 23:59 on 30 April 2026.

Submission: Email responses to box.earlycompetition@neso.energy.

Format: NESO accepts responses to any or all questions. Respondents can be selective.