UK regulator proposes battery storage fees
Ofgem is consulting on a new fee for battery storage projects to secure their grid connection slots, aiming to reduce a queue of over 83 GW of proposed
The UK's energy regulator, Ofgem, is proposing a new financial commitment fee for battery energy storage system (BESS) projects seeking grid connections. The plan, described as a "major intervention," aims to tackle an oversubscribed queue that currently holds over 83 gigawatts of prioritized battery capacity.
The grid connection challenge
This move follows a connections reform process by the national grid operator, NESO, which cleared 40% of grid-level battery capacity from the queue. Despite this, a massive backlog remains. If every project currently holding a connection offer were built, the resulting capacity would vastly exceed official targets.
According to the source, the built capacity would be 14.8 GW above NESO's 24 GW estimate needed to meet the UK's 2030 clean power target. It would also be 61.7 GW above the 29 GW projected as necessary by 2035.
Details of the proposed fee
The proposed Oversubscribed Technologies Commitment Fee (OTCF) would require BESS developers to pay a security to keep their place in the connection queue. The fee would be linked to a project's proposed capacity. The starting level would be £3,000 per megawatt, potentially rising to a maximum of £25,000 per MW if the queue remains oversubscribed.
The measure would be implemented through a modification to Great Britain's Connection and Use of System Code (CUSC). This specific code change, known as CMP470, was first proposed by BESS developer Field Energy in March 2026 and could come into force in July 2027.
| Fee Tier | Cost per MW | Condition |
|---|---|---|
| Initial | £3,000 | Starting level for the commitment fee |
| Maximum | £25,000 | Applied if the connection queue remains oversubscribed |
Industry consultation and potential changes
Ofgem has now opened a consultation, inviting industry stakeholders to share their views on the proposal. Developers and other parties have the opportunity to comment on the justification for the new fee structure, how its impact should be assessed, and any implementation concerns.
The consultation document outlines possible modifications to the current plan. These include capping the commitment fee at a project's maximum existing security exposure, removing the fee once a project begins construction, and removing an exemption currently proposed for certain co-located projects. Stakeholders have until October 1 to submit their responses.
The regulator's consultation is now live, and the full document is available from Ofgem.
