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Ofgem requests review of new transmission asset plan

A proposal to allow new connectees to build longer transmission assets has been returned by Ofgem for further analysis of its impacts and benefits

Ofgem has decided to return the Connection and Use of System Code (CUSC) Modification Proposal to the National Grid ESO‘s CUSC Panel for further consideration.

The proposal, submitted on 10th August 2023, seeks to allow new connectees to construct transmission assets to connect to the wider transmission network.

The proposal aims to change the existing provisions, which currently limit users to constructing connection assets of two kilometres or less.

It intends to expand these provisions, allowing users to build longer assets, and introduces the concept of ‘Contestable Assets’.

This would include both Transmission Connection Assets and infrastructure assets.

Additionally, the proposal seeks to establish a framework for Adoption Agreements and Intervention Criteria, which outline the conditions under which transmission owners can intervene in user-constructed assets.

Ofgem has identified several deficiencies in the report that need addressing before a decision can be made.

These include unclear financial and time benefits, insufficient consideration of risks such as sub-standard assets, charging implications, and investment risks, lack of clear explanation and detail on the proposed process and inadequate comparison of the incentives for transmission owners and users regarding asset quality and timeliness.

Ofgem has directed the CUSC Panel to undertake additional steps to address these issues, including a comprehensive analysis of potential risks and benefits and the incorporation of suitable mitigations where necessary.

The decision to return this proposal also affects a related modification proposal, which Ofgem will defer until the outcome of this proposal is clarified.

A similar decision has been made regarding another modification proposal, which is also being returned for further consideration.

Ofgem’s directive aims to ensure that all relevant factors are thoroughly considered before making a final decision on the proposals.

The CUSC Panel is expected to revise and resubmit the proposal as soon as practicable.

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