CMP470 Connection and Use of System Code (CUSC) urgency decision

What changed

Ofgem has accepted urgency for CMP470, a CUSC modification that would introduce a commitment fee for developers holding grid connection agreements in oversubscribed generation technologies. The modification was raised by Field Energy Limited on 20 March 2026, the CUSC Panel recommended urgency on 27 March, and Ofgem confirmed on 2 April. The decision was published on 7 May. Urgency status means CMP470 bypasses the standard CUSC modification timeline, which typically runs 6-12 months, and moves to an accelerated timetable set by the CUSC Panel.

This is the first CUSC modification to propose pricing queue positions by technology type. The 700 GW connection queue is dominated by speculative solar and battery projects that hold free options on grid capacity with no obligation to build. CMP470 targets that problem directly: pay a commitment fee or release your position.

What this means in practice

The commitment fee would apply to developers holding connection agreements for technologies Ofgem or NESO designate as "oversubscribed." The modification does not yet specify the fee level, the technology categories, or the threshold for oversubscription. Those details will be worked out during the modification process. But the direction is clear: queue positions that currently cost nothing to hold would carry a recurring price.

The economic logic is straightforward. A grid connection agreement is a call option on transmission capacity. Under the current regime, that option has zero holding cost. Rational developers claim positions regardless of whether they intend to build, because the downside is zero and the upside is the option value of a scarce connection. The result is a 700 GW queue against roughly 70 GW of actual system capacity, with genuine projects waiting years behind speculative ones.

A commitment fee converts a free option into a priced one. Developers with funded, shovel-ready projects absorb the fee as a cost of doing business. Developers holding speculative positions face a choice: pay to hold, or release. If the fee is set at the right level, the queue thins to projects that can justify the cost, and connection offers reach viable developers faster.

Three groups are directly affected:

Speculative developers holding multiple connection agreements across oversubscribed technologies face the sharpest impact. Many of these positions were acquired precisely because they were free. A commitment fee changes the calculus entirely. Projects without planning consent, grid funding, or power purchase agreements become expensive to hold.

Funded developers in the queue benefit. Every speculative position that drops out moves genuine projects closer to a connection offer. For a developer with a 500 MW solar project, planning consent, and a route to market, the commitment fee is a cost worth paying if it means connection in 2028 rather than 2033.

NESO gains a cleaner queue to manage. The current backlog forces system planning against a pipeline that is mostly fictional. Removing speculative capacity from the queue improves the accuracy of network reinforcement planning and reduces the risk of building transmission assets for projects that never materialise.

The fee does not solve the queue problem on its own. It addresses demand-side queue inflation but does nothing about supply-side constraints: the pace of transmission build, the cost of reinforcement, or the allocation methodology. CMP470 is a necessary but not sufficient reform. It prices the option; it does not expand the capacity.

One risk worth flagging: if the fee is set too low, it functions as a nuisance cost that speculative developers absorb without changing behaviour. If set too high, it penalises smaller developers with genuine projects but tight balance sheets. The calibration matters more than the principle. The modification process will need to define "oversubscribed" precisely enough that the fee targets the right technologies without catching projects that are not contributing to the backlog.

What happens next

The urgent modification timetable is set by the CUSC Panel, not by standard governance timescales. Expect a workgroup to convene within weeks, with a compressed consultation period. The workgroup will need to define:

- Which technologies qualify as "oversubscribed" and by what metric - The fee level and payment frequency - Whether existing connection agreements are caught or only new ones - Interaction with NESO's ongoing Connections Reform programme and the TMO4+ queue management process

Ofgem's final decision on CMP470 could come within 3-6 months given urgency status, compared to 12-18 months under standard process. If approved, implementation would require NESO to identify affected agreements and issue fee notices.

CMP470 sits alongside broader connections reform. NESO's TMO4+ process is already filtering the queue through gate checks; CMP470 would add a price signal on top of an administrative filter. The two mechanisms are complementary: TMO4+ tests whether a project is real, CMP470 tests whether a developer is willing to pay for its place. Together, they attack the queue from both sides.

This is worth watching closely. If the commitment fee works, it establishes the principle that grid capacity is a scarce resource with a price, not an administrative entitlement allocated by queue position. That principle has implications well beyond CMP470.