Ofgem Significant Code Review (SCR)

With Ofgem’s Access and Forward-Looking Charges Significant Code Review (SCR) coming into effect from 1st April 2023, the charging boundary for generation and demand applications has changed.

Customers applying for a Demand Connection will normally no longer have to pay for a proportion of upstream reinforcement costs, and customers applying for a Generation Connection will normally only have to pay for a proportion of reinforcement costs at the same voltage level as their point of connection*. All customers will still have to pay for the works to provide their new connection (known as the extension assets) either by the Distribution Network Operator (DNO) or by an Independent Connection Provider (ICP).

*Contributing towards reinforcement is subject to the speculative nature of the scheme and the high-cost project threshold.

Demand Connection Reinforcement Charging Treatment

Applications for a Demand connection will not be required to contribute to reinforcement works unless they trigger the Demand High-Cost Project Threshold of £1,720/KVA or if they are deemed to be a Speculative Development.

Generation Connection Reinforcement Charging Treatment

Applications for a Generation Connection will be required to contribute to reinforcement at the same voltage level as the point of connection. Reinforcement at the voltage level above will not be required to be paid subject to the Generation High-Cost Project Threshold of £200/kW or if they are deemed to be Speculative Developments. Please note that connection of Energy Storage will be treated as a Generation Connection for connection charging purposes.

Prior to April 2023, Flexible Connections arrangements were offered to applications triggering network reinforcement where the customer was willing to accept some level of curtailment. A curtailment study would have been completed and the best estimate of likely curtailment arising from the identified network constraints, was provided with the quotation in a curtailment report. In the event of operational curtailment exceeding the curtailment estimate, there was no contractual obligation or penalty payment available.

From 1st April 2023, Curtailable (non-firm) access arrangements are available for new application connections where the DNO identifies a requirement for network reinforcement, and a specific network need for curtailment to manage local network constraints until that reinforcement is completed or on a permanent basis.

A Curtailable Connection will enable a customer to connect quicker by agreeing that the use of some or all of that Connection may be restricted by the DNO at certain times when the network is congested. An industry-wide methodology has been developed for calculating a contractually defined Curtailment Limit. Once connected, the curtailment is monitored and reported to the customer and if this Curtailment Limit is exceeded over a 12-month period, the network company will pay the curtailed customer at a published set price for this excess curtailment.

The ability for a DNO to Curtail that Customer will cease after an agreed Curtailment End Date, determined based on the time required by UK Power Networks to reinforce the network to allow an unconstrained network access.

Curtailable Connections will typically be offered when the time to complete reinforcement is more than 12 months after completion of any extension assets / Customer Connection, and if the customer can be flexibly managed and comply with Flexible Connection requirement standard EDS 08 5060. Curtailable Connections are not offered to domestic and small commercial users. Curtailable Connections with and without an end date are available.

Curtailable Connections with a defined Curtailment End Date are offered to customers applying for an
unconstrained connection, where the site has been identified to trigger network constraints and where
the applicant contributes to the reinforcement charge (if any). The end date will be set based on the
minimum time it takes to reinforce the network constraint. For example, this could be the time needed
to install a new grid transformer at a Primary Substation or reconductor an overhead line.

Curtailable Connection without End Date is offered to customers applying for an enduring constrained
connection but where they do not wish to contribute to the reinforcement. The curtailment that a customer can be subject to will be measured relative to a defined Curtailment Limit. Customers may apply for a Curtailable Connection with an End Date at a later date and would need to contribute to the reinforcement (if any charge applies).