Approval of NESO's CSNP Methodology

What changed

Ofgem has conditionally approved NESO's methodology for producing the Centralised Strategic Network Plan — the first attempt at a unified, long-term infrastructure plan spanning electricity transmission, gas transmission, and hydrogen transport and storage networks across GB. The decision, published 15 April 2026, follows NESO's January 2026 submission. Approval is subject to two conditions requiring NESO to provide further detail on unspecified areas before the methodology is considered final.

The CSNP methodology describes a structured process: take the Strategic Spatial Energy Plan as an input, identify system needs, develop options, appraise them against cost and deliverability criteria, and recommend a delivery sequence. It also sets out governance arrangements and stakeholder engagement plans. Ofgem assessed it against its own CSNP Guidance and the relevant licence conditions (ESO Licence Condition C17, GSP Licence Condition C12) and concluded it provides a "credible and proportionate framework" for the first CSNP.

What this means in practice

This is the formal starting gun for centralised network planning in GB. Until now, network investment has been largely reactive — developers apply for connections, transmission owners propose reinforcements, and Ofgem approves spend through RIIO price controls. The CSNP replaces this with a top-down planning model where NESO identifies what needs building, where, and in what order.

For transmission owners (NGET, SPT, SSEN-T), the CSNP will increasingly determine which projects they build. Their role shifts from proposing investment to delivering a centrally specified programme. The commercial implications are significant: under RIIO, TOs earn returns on capital they deploy. A central plan that sequences and prioritises investment changes the volume and timing of that capital, which changes their revenue.

For developers in the connections queue, the CSNP matters because it determines which parts of the network get reinforced first. A developer with a connection offer contingent on a transmission upgrade that the CSNP deprioritises faces an indefinite wait. Conversely, projects aligned with the CSNP's spatial priorities should, in theory, move faster. The 700 GW queue will not clear through planning alone — but the CSNP determines the order in which capacity becomes available.

For consumers, who fund network investment through TNUoS charges, the CSNP shapes the total bill. The methodology determines which investments get recommended. Ofgem's price control process determines how much TOs earn for delivering them. But the planning framework upstream is where the spending envelope is set. A plan that over-builds has a direct cost. A plan that under-builds has an indirect cost through congestion and constraint payments — which consumers also fund.

The fundamental tension is between central planning and price discovery. The current system is dysfunctional — a 700 GW queue, decade-long connection timelines, and £2bn+ annual constraint costs demonstrate that. But the CSNP assumes NESO can identify system needs that the price system would otherwise reveal through decentralised investment decisions. That is a strong assumption. NESO's Future Energy Scenarios can model physical flows and technology deployment. What they cannot model is how developers, investors, and consumers would respond to different price signals at different locations and times — because those responses only exist in the act of choosing.

The conditional approval is notable. Ofgem did not reject the methodology or send it back for rework, but attaching conditions to the first submission signals that the framework is not yet complete. The two conditions — requiring further detail on unspecified areas — leave open the question of whether the gaps are procedural or substantive.

What happens next

NESO must now satisfy the two conditions before the methodology is considered fully approved. The timeline for this is not specified in the decision document.

Once the methodology is finalised, NESO will begin producing the first CSNP itself. This is the substantive deliverable — an actual plan specifying which network investments should proceed, in what order, across which vectors. No date has been set for when the first CSNP will be published, but the process of developing it — scenario modelling, options appraisal, stakeholder engagement, cost-benefit analysis — will take months.

Three related workstreams will interact with the CSNP:

1. The Strategic Spatial Energy Plan (SSEP), which feeds into the CSNP as an input. The SSEP identifies where generation and demand will locate. The CSNP then plans the network to connect them. If the SSEP's spatial assumptions are wrong, the CSNP builds to the wrong places.

2. RIIO-ET3, the next electricity transmission price control (2026-2031). The CSNP will increasingly shape what TOs propose to build under RIIO. The interaction between a central plan and a price control that rewards capital deployment creates an obvious incentive alignment problem: TOs benefit from more investment, and the CSNP provides a planning rationale for it.

3. Connections reform, including the ongoing Gate 2 process and queue management proposals. The CSNP should, in principle, coordinate with connections reform so that queue priorities align with network investment priorities. Whether this coordination materialises in practice is an open question.

The first CSNP will be a test case. If it produces a credible, costed, and sequenced investment plan that accelerates connections and reduces constraint costs, it will justify the shift to central planning. If it produces a wish list without hard prioritisation — or if its recommendations are overridden by political pressure to build in particular locations — it will have replaced one dysfunction with another.