Changes to the Connection charging boundary for Demand and Generation Customers
In most cases this means that if your project requirements are primarily for Demand purposes (where you take and use electricity from the network) then you will no longer pay a proportion of network reinforcement costs upstream from your connection and so your connection charges will be reduced. Generation Customers will only pay a proportion of reinforcement costs, apportioned by their voltage level at their Point of Connection (POC). However, both Customer types will require to contribute where they trigger High-Cost Project Thresholds. All Customers will also still pay for the works to provide their Point of Connection and any sole use extension assets, either via their Distribution Network Operator (DNO), or via an Independent Distribution Network Operator (IDNO) or Independent Connection Provider (ICP).
What does this mean for you?
What does this mean for you?
The Significant Code Review will have a very limited impact on applications for single domestic Customers. This impact will be limited to Customers whose applications trigger the need for reinforcement works. In such instances, these Customers are likely to see a reduction in their Connection charges.
Applications for a Demand Connection site will not be required to contribute to reinforcement works unless they trigger the Demand High-Cost Project Threshold of £1720/kVA or are deemed to be a Speculative Development or Temporary Supply. This should likely result in a reduction in their Connection charges if this scheme is subject to reinforcement.
Applications for a Generation Connection site will be required to contribute to reinforcement works apportioned by reference to the voltage of their Connection, and any charges above the Generation High-Cost Project Threshold of £200/kW. This should likely result in a reduction in their Connection charges. Please note that Connection of Energy Storage will be treated consistently with generation for Connection charging purposes.
Curtailable Connection Offer
From 1st April 2023, curtailable (non-firm) access arrangements may be available for a new application for Connection to a DNO/IDNO’s Distribution System where, for that application, a DNO/IDNO identifies a requirement for network Reinforcement, and a specific network need for Curtailment to manage local network constraints until that Reinforcement is completed.
A Curtailable Connection may enable a Customer to connect quicker by agreeing that the use of some or all of that Connection may be restricted by the DNO/IDNO at certain times. The amount of Curtailment that a Customer can be subject to will be measured relative to a defined Curtailment Limit, and the ability for a DNO/IDNO to Curtail that Customer may cease after an agreed end date. Should Curtailment exceed the Curtailment Limit a DNO/IDNO may be required to pay the Customer at a published set price.
We will offer a variety of different connection options where Curtailable Connection arrangements are available.
Customers can request a curtailable connection offer when applying for their connection by stating this on their application form however we will only offer a quotation with curtailment options subject to meeting the conditions set out in the guidance below.
From 1st June 2023 we will begin to automatically offer curtailable connections to new applications received on or after this date for connections that require a capacity greater than 10MW export and/or 10MVA import. We will continue to review this in the future.
Criteria for receiving a Curtailable Connection Offer:
A Curtailable Connection Offer will only be made when:
- Reinforcement of the network is needed to accommodate the connection in accordance with the Minimum Scheme;
- The Customer is not a “small user”; and
- There is a “network benefit”.
The term “network benefit” has not been codified under the Access and Forward-Looking Charges Significant Code Review (the “Access SCR”), however it requires:
- That Reinforcement is not only for fault level or reactive power issues;
- That a Curtailable Connection can be implemented before Reinforcement is completed; and
- The Connection can meet the DNO/IDNO’s scheme standards (e.g., what is required to adequately monitor, manage, and audit a Curtailable Connection such that it can be Curtailed and meet the necessary speed of response etc).
A “small user” means (i) domestic and non-domestic Customers that are billed on an aggregated and non-site specific basis or who are metered directly using whole current meters; or (ii) Unmetered Supplies. A “small user” generally excludes any Customer that does not have a current transformer (“CT”) meter.
Where significant works are required to the Transmission System for the connection a Curtailable Connection Offer may not be appropriate.
The Electricity (Connection Charges) (Amendment) Regulations 2022 come into force on 1st April 2023. These are an amendment to the existing Electricity (Connection Charges) Regulations 2017. We have created an online tool that may help you determine as to whether any applicable ECCR charges are due to be paid.
The Electricity (Connection Charges) (Amendment) Regulations 2022 can be found here.
In addition to the changes already highlighted there are further definitions and clarifications proposed in Access SCR regarding whether a project is determined to be speculative, and whether the primary purpose of your Connection is determined to be a Demand Connection or a Generation Connection. The outcome of these assessments will have a direct impact to the Connection charges of your project.
The assessment and criteria to determine the outcomes of these assessments are included in the ECCR tool located in the drop-down option above.
To highlight the changes and methodology of Access SCR, there are a number of worked examples in our Statement of Methodology and Charges for Connection published on our website for each of our Distribution Licence Area (DSA): Scottish Hydro Electric Power Distribution (or “SHEPD”); and Southern Electric Power Distribution (or “SEPD”). These can be accessed via below links.
We hosted a webinar in March 2023, where we highlighted the changes that can be expected from the Access SCR and gave Customers an opportunity to ask any question. The presentation slides are included here for future reference.
Further information relating to Access SCR and industry working groups are available in the drop down options below.
Click here to view and download the Access and Forward-Looking Charges Significant Code Review: Decision and Direction | Ofgem
Click on the links below to download and view.
DCP 404 Working Group – DCUSA – Changes to Terms of Connection for Curtailable Customers
DCP 405 Working Group – DCUSA – Managing Curtailable Connections between Licensed Distribution Networks
DCP 406 Working Group – DCUSA – Changes to CCCM
DCP 407 Working Group – DCUSA – Speculative Development