Changes to electricity connection charges from 1st of April 2023

31 March 2023

From 1st of April 2023, how electricity connections are charged to the customer will change! 
Following the completion of the ‘Significant Code Review’ process, which started in December 2018, it has been confirmed that the charging methodology will change for the following Regulatory Price Review period, which commences as of the 1st of April 2023 (Tomorrow). 
 

Originally published by Ofgem, the image below summarises the new charging arrangements, following the objectives to ‘reduce the overall connection charge faced by those connecting to the distribution network’. 

Ofgem has directed that new changes should be applied to connection applications received from the 1st of April 2023 and that any connection offers which are ‘in-flight’ will have current rules (pre-1st of April) applied to them.

In short, the main impact of the changes will be positive for our clients in that the Distribution Network Operator (DNO) will, in most cases, not charge the cost of network reinforcement as part of the demand connection quote to the customer. There are two caveats to the change of cost allocation: 

• A High-cost cap on projects will be introduced, with a threshold of £1,720 £/KVA. Reinforcement costs above this will be funded by the connection customer. 
• Where a connection request is deemed ‘speculative’ (our team can break down what this means), the cost quote will be fully funded by the connection customer. Based on a new scoring system, it will be better and more objectively defined, which should remove the inconsistency between DNOs. 

While these changes are positive, it does only apply to demand. Generation sites will still need to pay in part, and there is no change to transmission network reinforcement, which is the network owned and operated by National Grid. If this reinforcement is required to support network capacity for a new connection, costs will still be included in the connection quote. 

These changes are new for us all, but our utilities team are here to help support clients to navigate these changes as they come into effect; please contact our team on the details below:

  Emma Harris

  emma.harris@m-ec.co.uk

  01530 264753

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