Connection Charging Methodology (Transmission)
Primary source: CUSC Section 14 Part 1 (v1.48a, April 2026) and CUSC Section 15 (v1.13, January 2026)
Canonical: ~/knowledge/sources/neso/connection-charging-methodology-transmission.md
What transmission connection charging covers
Transmission connection charging is the regime that determines what a new user pays to physically connect to the National Electricity Transmission System (NETS) - the high-voltage grid above 132kV. It is distinct from TNUoS (which pays for the shared network) and from BSUoS (which pays for balancing).
Two bodies of rules govern the process:
- CUSC Section 14 Part 1 - the Connection Charging Methodology Statement. Defines connection assets, annual charge calculation (non-capital and capital components), and the non-discrimination principle.
- CUSC Section 15 - the User Commitment Methodology. Governs what a user owes if they cancel or reduce their capacity commitment before connection: cancellation charges, securities, and the Progression Commitment Fee.
Users in scope: generators connecting at 132kV and above, interconnectors, distribution network operators at grid supply points, and large demand customers (including data centres) connecting directly at transmission voltage.
Sole use assets vs shared network
The defining principle is that connection charges cover "sole use assets" only - infrastructure that exists solely for this user's connection, incapable of use by any other party. This covers cables, switchgear, bay works, and civil preparation at the connection site. The practical boundary is set at the double busbar bay.
Shared network reinforcement - upgrading the transmission system to accommodate a new connection - is recovered from all users via TNUoS, not charged to the individual connectee.
The shallow vs deep boundary
The "depth" of a connection charge determines how far into the shared network the connectee pays:
- Deep: the connectee pays for their own assets and for shared network reinforcement
- Shallow: the connectee pays only for sole use assets; reinforcement is socialised
- Shallow-ish: the connectee pays for reinforcement at their own voltage level but not above
GB transmission connection charging has always been broadly shallow in practice (sole use assets only), but the formal shallow boundary was set through the Access SCR.
Access SCR: the shallow boundary formalised
Ofgem's Electricity Network Access and Forward-Looking Charges Significant Code Review (launched 2018, final decision 2022) formalised the shallow connection boundary:
- Demand: fully shallow - demand users pay only for extension assets, not network reinforcement
- Generation: shallow-ish - generators pay for reinforcement at their own voltage level but not above
- A high-cost cap (~£1,720/kVA) protects the customer base from exceptionally expensive individual connections
- Distribution implementation: 1 April 2023 (under RIIO-ED2)
- Transmission implementation: April 2025
The connection queue crisis
Before TMO4+, the transmission connection queue operated on first-come, first-served. By 2024 it had grown to approximately four times the capacity needed for 2030 targets. Many speculative projects held queue positions without credible development programmes, blocking genuinely ready projects.
CUSC Section 15 was strengthened over time to make queue positions more expensive to hold: higher Progression Commitment Fees, scaled Wider Cancellation Charges tied to the network investment committed in each zone.
TMO4+: connections reform
Ofgem approved the TMO4+ package (CMP434 and CMP435) on 15 April 2025. Live from 10 June 2025.
Key shift: from first-come, first-served to first-ready, first-needed, first-connect. Projects must demonstrate readiness: planning consent, financial commitment (FID or CfD/CM agreement), land, and environmental approvals.
Gate 2: existing queue projects submitted evidence July 2025 (transmission). NESO confirmed successful applicants September 2025. Initial revised offers issued Autumn 2025 for 2026/27 connections.
Protected projects: existing agreements with connection dates on or before 31 December 2027 with planning consent and FID, or holding a CfD/CM agreement, retained their connection dates. Projects with planning applications submitted by 20 December 2024 also protected.
Scale: 381.5GW of ready-to-build capacity released; up to £40bn annual investment unlocked (NESO figures).
User Commitment: what cancellation costs
Under CUSC Section 15, a user that cancels or reduces capacity before connection pays a Cancellation Charge with up to four components:
- Pre Trigger Amount - before the Trigger Date (3 financial years before connection): £1,000-3,000/MW scaled by years remaining
- Attributable Works Cancellation Charge - the cost of construction already committed or incurred for this user (fixed by election, or actual). Adjusted by Local Asset Reuse Factor, Strategic Investment Factor, and Distance Factor
- Wider Cancellation Charge - after the Trigger Date: a per-MW charge based on the Zonal Unit Amount for the user's Generation Zone, reflecting the shared network investment committed for this connection
- Progression Commitment Fee - added from the PCF Activation Date under TMO4+ reforms, designed to deter queue gaming in the reformed process
The Cancellation Charge Profile scales the charge by proximity to connection: 100% (connection year), 75% (1 year prior), 50% (2 years prior), 25% (3 years prior).
Interaction with data centre demand
Large data centre developers seeking direct transmission connections have highlighted the tension between current connection charge levels and the economic value of a queue position. The DESNZ consultation on strategic demand connections (auction pricing) - closing April 2026 - examines whether connection offers should be priced via competitive auction rather than cost-reflective charges, recognising that queue scarcity has a value well above current Section 15 financial commitments.
CMP460 (Workgroup stage, April 2026) is separately proposing to socialise transmission connection asset costs further and cap individual contributions, which would move the charging model further from sole-use cost recovery toward collective infrastructure funding.
See also
tnuos-charging-methodology.md- shared network cost recoverybsuos-charging-methodology.md- balancing services cost recoveryconnection-charges-regulations-2002.md- the primary SI frameworkcusc.md- CUSC structure and Section 2 (connection rights)access-scr.md- the full Access SCR reforms (item 89 in instruments.md)