CMP457: Revision of the Obligatory Reactive Power Service (ORPS)
What is being proposed
The rising cost of ORPS provision reflects the compensation rate for ORPS, being reflective of gas prices. The increasing shift away from gas to low carbon generation requires a re-evaluation of compensation principles rather than a simple updating of values. This update to the Connection and Use of System Code (CUSC) will incorporate the output from the ORPS project to introduce a fair and transparent payment methodology.
Current status
Proposal raised on 11 July and presented to Panel on 25 July. The Panel gave the Proposer some feedback and will be brought back to the postponed 03 September to agree a governance route. In the postponed 03 September Panel, the Panel requested the modification be presented again in the October Panel due to a report being published on 25 September that can help with the solution development. (06/11/2025) In the Special CUSC Panel held on 21 October 2025 the CUSC Panel unanimously agreed that CMP457 should follow the Standard Governance route and proceed to a Workgroup. The Terms of Reference will be agreed at the CUSC Panel on 31 October 2025. Workgroup nominations opened on 23 October and will close on 13 November.
Details
Timeline
Analysis
NESO is revising the Obligatory Reactive Power Service (ORPS) compensation methodology through CUSC modification CMP457, moving away from gas price-based rates. The Standard Governance workgroup process begins after 13 November 2025, following unanimous CUSC Panel approval in October. Current ORPS costs reflect gas prices despite the shift to low-carbon generation requiring grid stability services.
Why it matters
This addresses a fundamental mismatch where renewable generators provide reactive power but compensation remains tied to gas costs, creating cross-subsidies. The reform could reduce costs for generators while ensuring adequate reactive power provision, though the specific methodology remains undefined.
Key facts
- •Workgroup nominations close 13 November 2025
- •CUSC Panel unanimously approved Standard Governance route 21 October 2025
- •High impact on all Grid Code-bound generators
- •Current compensation reflects gas prices despite low-carbon generation shift