Ofgem Proposes a Commitment Fee for Battery Projects Waiting in the Grid Connection Queue
Ofgem has said it is minded to approve a new fee on grid-scale battery projects in the connection queue, to clear out projects that are unlikely to be built. It does not apply to home batteries.
What Ofgem proposed
On 17 September Ofgem published a minded-to consultation on code change CMP470, which would introduce an Oversubscribed Technologies Commitment Fee. The idea is to make developers who hold a place in the queue show a financial commitment, so that projects which are not viable leave earlier. A minded-to position is not a final decision.
Ofgem says the fee would apply only to battery energy storage systems for now, because they are the one technology clearly oversubscribed.
How the fee would work
The fee starts at £3,000 per MW. If oversubscription persists, it rises to £5,000 per MW after six months, then increases by £5,000 per MW every six months up to a ceiling of £25,000 per MW. It applies from the point a project accepts its Gate 2 offer, and it is returned once the project energises.
It switches on when a technology exceeds its target requirement by more than 50%, and stops applying once oversubscription falls below 25%. The consultation document says it would not take effect immediately. The current assumption is that it would first appear in the July 2027 securities statement, with payments due from October 2027.
Why Ofgem is acting
Ofgem says about 90 GW of battery capacity is operational or in the reformed queue, against a requirement of around 29 GW by 2035. A law firm summary of Ofgem's impact assessment puts the cost of persistent oversubscription at roughly £460 million in inefficient network costs.
Responses were due by 1 October 2026, and Ofgem has said it expects to publish its final decision later in the year.
What it means for households
This is about large batteries connecting to the transmission system, not the home batteries covered on this site. The consultation document does not address small domestic batteries or the G98 and G99 rules that apply to them. Our UK country guide explains the household side.
The wider question is how much grid-scale storage Britain needs, and how quickly it can be connected. Our explainer on home batteries and the grid sets out how small and large batteries relate.
Sources
- Ofgem: Ofgem moves to free up grid capacity by tackling excess battery projects
- Ofgem: CMP470 Minded-to Consultation
- BCLP: Ofgem proposes new commitment fee to tackle battery storage queue oversubscription
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