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Demand connections: DESNZ consultation and reforms update

The Department for Energy Security and Net Zero has launched a consultation: “Accelerating electricity network connections for strategic demand.” The consultation is the latest step in the development of further reforms to the electricity grid connections regime targeting demand connections. The demand connection reforms seek to ensure the demand queue consists of viable projects that can secure timely connections, and that strategically important projects can be prioritised for connection, with data centres being a key focus of the proposals initially.  

The reforms are being framed around the three pillars of “Curate”, “Plan” and “Connect”. The principal aims of which are to:

  • Curate: clean up the demand connections queue, minimising speculative projects (being those unlikely to progress to delivery) and strengthening queue entry and membership requirements. There is an initial focus on developing financial mechanisms and enhanced readiness requirements for data centres, with consideration of other demand types following later in a second phase. The additional measures will apply to data centre projects with an existing agreement as well as future applications. It will also update the securities regime for demand at transition. "Curate" is being led by Ofgem, developing measures through its Curate Advisory Group and with NESO

  • Plan: align demand connections with strategic needs, with the Government identifying projects of strategic national importance for prioritisation, such as AI Growth Zones, EV charging hubs, and the electrification of manufacturing sites, including to reserve and reallocate capacity for strategic demand; and to move to a strategically aligned process for managing data centre connections in a later phase of reform. "Plan" is being led by the Government;  

  • Connect: bringing in measures to increase and speed up delivery of physical connections for demand projects, and ensure a secure and effective system that includes increasingly large demand loads. It will consider self-build and ownership of connection assets and clarify high voltage connection rules and large demand consumer-led flexibility. "Connect" is being led by Ofgem with the Government, developing measures with an industry-facing advisory Connect Task and Finish Group.

The Government is consulting on its approach under the "Plan" reforms in this consultation. Ofgem plans to consult on "Curate" and "Connect" reforms in Spring 2026. NESO will support all three pillars. Critical queue management and prioritisation measures are being implemented before NESO re-opens the queue to new applications. 

The DESNZ consultation proposals

This consultation seeks views on a number of proposals, and confirms that the Government intends to use new powers in the Planning and Infrastructure Act 2025 (PIA) and the Energy Act 2023 (as inserted by the PIA) to implement the demand connections reform package. Proposals subject to the consultation are mostly under the “Plan” pillar and include:  

  • The mechanisms to prioritise strategic demand projects: to designate plans to identify the demand projects the Government considers strategically important, which NESO and the network companies must prioritise for connection at transmission level, including to reserve future network capacity and reallocate released capacity. The consultation includes examples of how this will work in practice for transmission level demand projects at Annex D. Distribution-connected demand changes are not in scope of this consultation but will follow. The Government intends to publish a designated strategic plan with a list of strategically important demand projects, including AI Growth Zones; 

  • Strategic alignment of data centre connections: to introduce a strategically aligned process to manage connections data centre projects, by aligning their connections to regional infrastructure targets set out in a future data centre strategy; 

  • Flexible connection arrangements: their possible use as conditions for connection for data centres and on a voluntary basis for other demand projects. The consultation asks whether very large demand users, particularly data centres, should be required to provide a minimum level of demand flexibility as a condition of connection, enabling the system operator to curtail or limit demand during periods of network or system stress. It seeks views on targeted incentives for other demand projects, such as earlier or lower-cost access to the grid, to encourage voluntary adoption. This is part of the “Connect” workstream;

  • Auctions: whether there is a role for auctions in the reservation or reallocation of capacity for strategic demand projects; and

  • Implementation of more stringent queue management measures: These “Curate” proposals will be set out in Ofgem's future policy consultation expected in the Spring, with this consultation only covering their implementation through PIA powers. 

The Connections Accelerator Service (CAS) was launched in pilot phase in December 2025. It brings together DESNZ, the Office for Investment, other Government departments, network companies, Ofgem and NESO to provide help to a small number of strategically important demand projects facing grid connection delays. Further scaling of CAS is planned throughout 2026. Details on the existing CAS project selection process are set out in Annex B of the consultation. The process is in three stages:

  • Stage 1: Submission for consideration. Projects must be sponsored by a Government department, devolved Government or Mayoral Strategy Authority;

  • Stage 2: Assessment against defined criteria to determine their strategic importance. This consists of a framework and scoring system, developed by DESNZ and the National Infrastructure and Service Transformation Authority (NISTA), according to economic and social priorities, with a “boost” metric to cover national security considerations and exceptional circumstances; and

  • Stage 3: Regional lists with shortlisting based on strategic importance, urgency and deliverability. 

Parties wishing to respond must do so by 15 April 2026.

Currently, there is a lack of clarity as to what constitutes strategic priority infrastructure. AI Growth Zones, EV charging hubs and the electrification of manufacturing sites are referenced but with little further detail, until the Government publishes its designated strategic plan and list of strategically important demand projects. With such a focus on priority for data centres, those industries with projects not identified or categorised as priority infrastructure will have concerns over access to already constrained capacity. As reported by BBC news, the Home Builders Federation has voiced its frustration over the impact on housing development projects outside the strategically important framework.  

Proposed implementation phases

The Government proposes to implement the three specified proposals in phases:

  • Phase 1: Before NESO reopens the transmission connection applications:
    • Critical queue management measures across transmission and distribution (Proposal 1);
    • Prioritisation mechanisms at transmission-level (Proposal 2).
  • Phase 2: At the second post-TMO4+ connections application window:
    • Strategic alignment for data centre connections (Proposal 3);
    • Any further readiness requirements Ofgem considers necessary.

Work to implement ‘Connect’ measures to expedite delivery of transmission connections will be ongoing across both phases.

Responses and expected next steps

  • The consultation closes for responses on 15 April 2026.
  • Respond online at: https://energygovuk.citizenspace.com/energy-infrastructure-planning/grid-connections-reforms/ (or via email or in writing).
  • The summary of responses is expected to be published on GOV.UK within 12 weeks of the closing date.
  • Further consultations by Ofgem on "Curate" and "Connect" reforms are planned for Spring 2026.
  • Later in 2026, Ofgem will set out its approach to phase 2 of the Curate workstream, focussing on other demand types (phase 1 is focussed on data centres).
  • There will be ongoing development of the detail for the strategic alignment of data centre connections in a future data centre strategy, with further stakeholder engagement.

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Recap on recent grid connection reforms and the demand-side proposals 

The Great Britain grid connections process has been undergoing significant reform, moving from a "first-come, first-served" basis to a "first ready and needed, first connected" process (known as TMO4+). The work done on the queue so far has deprioritised over 300GW of excess generation and storage capacity. To obtain a confirmed connection agreement, projects must show that they are sufficiently “ready”, based on evidence of land and planning readiness, with generation and storage projects also having a requirement to be "needed" under the Government's Clean Power 2030 Action Plan. Under TMO4+, demand projects only need to meet readiness, they do not need to meet the “needed” requirement, leaving no mechanism to prioritise strategically important demand projects. The transmission queue is still paused to new connection applications, while NESO and the network operators issue revised connection offers. When it re-opens, connection applications will be managed in application windows, expected to be twice-yearly.

Despite the TMO4+ reforms, it became clear that strategically important demand projects will face delays unless further action is taken. From November 2024 to June 2025 there was a huge surge in demand queue contracted offers, with Ofgem highlighting an increase from November's 41GW (17GW transmission, 24GW distribution) to June's 125GW (97GW transmission, 29GW distribution). Following its review of the demand queue, NESO identified approximately 140 data centres, representing around 50GW of capacity, in the transmission queue alone. 

Considering this level of growth to be far beyond the most ambitious market forecasts and what the electricity network can reasonably support, in November 2025, the Government and Ofgem (with NESO support) announced their intentions for urgent reform of the demand connections process. In its November 2025 policy paper, Delivering AI Growth Zones, the Government set out specific policy commitments to accelerate grid connections for data centres to support AI Growth Zones, through demand queue reforms, reserving and reallocating grid capacity, work to enable self-build of high-voltage grid infrastructure and the roll-out of the Connections Accelerator Service (CAS). 

Ofgem released a call for input on demand connections reform in February 2026, seeking views on a package of reforms and setting out the three workstreams to “Curate, Plan, and Connect” demand connections. 

 

 

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electricty, london, energy transition, projects energy & infrastructure, demand connections reform, grid