The UK’s energy regulator Ofgem has released a decision on the needs-case justification for the potential first project to be tendered through the new onshore electricity transmission early competition framework.
In November 2024, the National Energy Systems Operator (NESO) requested that a sub-component of the project WCN2 – a new double circuit between North-West England and South-West Scotland – should be the first project that would be competitively tendered through Ofgem’s new onshore electricity transmission early competition framework. The following month, Ofgem consulted on the proposal to decide if this project should be the first to go through the early competition system.
In the policy decision document, Ofgem has stated that while it considers that “NESO identified a strong potential project for the first onshore early competition competitive tender”, it was not able to confirm the need for the specific subcomponent of the project to go through the early tender process. As such, the regulator will wait to make a formal determination on whether NESO’s request to competitively tender a sub-component of WCN2 is a “qualifying project” until new tender regulations are brought in on 25 April.
The document also notes that Ofgem and NESO are continuing to develop and finalise the onshore competition framework and will publish decisions on the commercial framework, license modifications, and industry code modifications “shortly”. Ofgem adds that the “government is also committed to increasing competition in electricity networks and is keen that the first onshore competitive tenders can be launched as quickly as possible”.
Increasing competition to improve transmission
Ofgem has been consulting on the future of competition tenders on the British electricity network in order to ensure that developers create a transmission network that is fit for the future needs of the grid.
In September, the regulator began consultations on the proposed tender process, which set out the proposed competitive tender process for granting an onshore electricity transmission licence to an electricity project.
The draft sets out the stages of the onshore transmission tender exercise, the process for competitive tenders, governance framework for various events in the process, and the defined functions of NESO and Ofgem in the tender process. Having since been finalised and confirmed, these will now come into force later this month.
The regulator is also considering other changes to its processes at present. Earlier this year, Ofgem opened up a consultation on potential changes to its strategic innovation fund (SIF) to reflect how the scheme has evolved during its two years of practical use.
