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Reformed National Pricing: reforms to siting and investment levers

DESNZ·consultation·HIGH·21 Apr 2026·source document

This consultation is open for responses

Closes 2 Jun 2026 (36 days remaining)

Summary

DESNZ consults on siting and investment levers under Reformed National Pricing (RNP), the programme that replaces REMA after ministers rejected zonal pricing. Closes 2 June 2026. Ofgem runs a parallel Call for Input on network and connections charging to 26 May. Together these set how much new generation and storage pay, and where.

Why it matters

This is the framework that inherits what REMA could not finish. Zonal pricing was rejected in July 2025. RNP keeps a single national wholesale price but loads the locational signal onto network charges, connection charges and siting rules. The real price signal for location now lives in TNUoS and connection terms, not the wholesale market.

Questions being asked

SSEP levers

  • Do you agree with the key levers for delivering the SSEP?
  • Are there other levers or alternatives that should be considered?
  • Do you agree with the categorisation of levers?

Key facts

  • Consultation opens 21 April 2026, closes 2 June 2026
  • Parallel Ofgem Call for Input on TNUoS closes 26 May 2026
  • NESO Balancing and Settlement Call for Input closed 14 April 2026
  • Programme replaces REMA; supports the Strategic Spatial Energy Plan (SSEP)

Timeline

Consultation closes2 Jun 2026

Areas affected

wholesale market designTNUoSconnection chargingsiting policySSEP

Related programmes

REMARNPSSEPConnections reformTNUoS

Memo

# RNP siting and investment levers: the locational signal moves off the wholesale price

DESNZ consultation, 21 April 2026. Closes 2 June 2026.

## What the consultation does

Reformed National Pricing is the successor programme to REMA after ministers rejected zonal wholesale pricing in July 2025. This is Chapter 2 of the RNP Delivery Plan, covering where new generation and storage get built now that the wholesale price will not do that job.

The document asks which policy levers should carry the locational signal. The options sit across three regulators. DESNZ owns siting levers: planning direction, SSEP alignment, ministerial guidance. Ofgem owns network charging (TNUoS) and connection charging, with a parallel Call for Input closing 26 May. NESO owns balancing, settlement and dispatch, with its own Call for Input that closed 14 April.

The substantive design work happens in the Ofgem and NESO tracks. This consultation defines the envelope the other two sit inside.

## What this actually means

Zonal pricing would have made the wholesale market reveal locational value continuously, through marginal prices at each node. RNP keeps a single GB wholesale price and loads locational allocation onto administrative mechanisms.

Three consequences follow. First, the locational signal becomes charge-based, not price-based. Developers do not see lower revenue for building in constrained areas. They see higher TNUoS and higher connection costs. Those charges are set by Ofgem on a multi-year cycle, not cleared every half hour. The signal is slower, coarser and more exposed to incumbents who staffed the charging methodologies for the last two decades.

Second, the administrative burden shifts inland. Three regulators must coordinate a problem one price would have handled automatically. Every misalignment between them creates arbitrage.

Third, legacy arrangements become a transition problem. Generators who sited badly under old rules keep their old connection terms unless the consultation concludes they should not. That legacy question is flagged in Ofgem's Call for Input and is the most politically contested part.

## Who pays

Developers pay the locational cost through charges rather than through price capture. Since charges are recovered from consumers, the cost ultimately falls on bills regardless of whether the siting decision was efficient. Under zonal pricing the discipline sat on the developer. Under RNP it sits on the consumer via network recovery.

Generators with locked-in connection terms retain the windfall of siting decisions made when no locational signal existed. Transition arrangements determine whether that windfall is clawed back.

## What's next

26 May: Ofgem Call for Input on TNUoS and connection charging closes. 2 June: this DESNZ consultation closes. Later in 2026: government response expected, with statutory instruments to follow.

Submissions filed in the next six weeks will shape the design envelope for the whole RNP programme.

Source text

The Reformed National Pricing programme replaces the Review of Electricity Market Arrangements ( REMA ). The REMA decision included a commitment to publish a delivery plan describing the various reforms that make up the programme and outlining how they will be delivered. As part of the plan, we are consulting on reforms we intend to make to siting and investment levers. Read Chapter 2 of the Reformed National Pricing ( RNP ): delivery plan . Read our consultation privacy notice . The Department for Energy Security and Net Zero (DESNZ) is consulting on potential reforms to the Reformed National Pricing (RNP) siting and investment levers, including how these could be combined, as outlined in Chapter 2 of the RNP Delivery Plan . It is important that these policy levers support delivery of the Strategic Spatial Energy Plan (SSEP) to reduce total system costs and consumer bills by influencing the location of new generation and storage projects in line with the SSEP’s requirements. This consultation therefore seeks views on potential reforms to the key siting and investment levers as part of RNP. Please note that Ofgem (as the authority on Transmission Network Use of System Charges) has launched a Call for Input (closing on 26 May) setting out in more detail how the regulatory levers of network and connections charging could be reformed to align with RNP and support delivery of the SSEP. The Call for Input seeks views on additional design options and considers the treatment of legacy arrangements as part of the transition to any new regime. Feedback on these issues should be directed to the Ofgem Call for Input. Please also note that, as referenced in Chapter 4 of the RNP Delivery Plan, the National Energy System Operator (NESO) published its Balancing and Settlement Call for Input (which closed on 14 April) as part of the wider RNP package. The focus was on reforming how the electricity grid is balanced, how power is dispatched and how settlements are calculated, and it considered issues separate from those raised in this consultation. General information Consultation details Issued: 21 April 2026 Respond by: 2 June 2026 How to respond Respond online Quality assurance This consultation has been carried out in accordance with the government’s consultation principles . If you have any complaints about the way this consultation has been conducted, please email: bru@energysecurity.gov.uk . Consultation questions Read Chapter 2 of the Reformed National Pricing (RNP): delivery plan . Identifying Levers Q 1a. Do you agree with the key levers that we have identified for supporting the delivery of the SSEP? Please provide rationale and evidence for your answers. Q 1b. Do you think there are any other levers missing or alternatives that should be considered? If so, please list them and provide rationale and evidence for your suggestion. Categorisation of levers Q 2. Do you agree with how we have categorised the levers? Specifically a. in your view, should Network Build, Seabed Leasing and Planning Reform be categorised as enabling levers ; and b. in your view should the Connections Regime, Locational Charging and Generation and Storage Investment Support Mechanisms be categorised as primary levers ? If no, please provide rationale and evidence for your answers. Lever options – how to combine the levers Q 3. What are your views on the overall strategic approach we have used for combining the levers into an options framework? For example, the logic and structure underpinning the options including the grid for how to combine the primary levers (Table 1). Assessment criteria Q 4. To what extent do you agree or disagree with the criteria we have used to assess the options? Please provide rationale and evidence to support your answer with particular reference to any other criteria that could be included in the assessment. Initial assessment Q 5. Do you agree with our preference for Options 2a, 2b, and 3 being suitable for further development with Options 0, 1 and 4 being discounted? Are there aspects of Options that you either think work particularly well, or that we should consider further? Please provide comments and further evidence to support your answer. Q 6. How do you think the risks and disadvantages identified under Options 2a, 2b and 3 (as outlined above in this document) could be addressed? Individual Levers – Connections Regime Q 7a. Do you think it would be practical to set Connections Capacity Thresholds for Options 2a, 2b and 3, by SSEP technology and zone? Q 7b. How should these thresholds be determined? Please provide rationale to support your answer. Q 8a. Should we set the CCT at a level higher relative to the CSNP planning line to allow for project attrition and competition in investment support schemes? (i.e. the difference between Option 2a and 2b). Q 8b. If we set the CCT above the SSEP Pathway, what additional safeguards might be needed to ensure we keep within the SSEP Pathway uncertainty range? Individual Levers – Locational Charging Q 9. What are your views on the role of locational charging, and interactions with our investment support schemes? Note that detailed questions on potential TNUoS and connection charging reforms are covered in Ofgem’s recent Call for Input. Individual Levers – Government investment support mechanisms Q 10. For Options 2a, 2b and 3, what, if any, changes or reforms would be needed to government investment support mechanisms (such as the Contracts for Difference, Capacity Market etc), and if so, what specific reforms would be needed?