Ofgem Moves to Charge Batteries for Holding Grid Slots

Ofgem opened a two-week consultation on 17 September 2026 on charging battery projects for the grid connection slots they hold, starting at £3,000 per megawatt and rising to a maximum of £25,000 per megawatt if the queue stays heavily oversubscribed.

The regulator's case rests on one comparison. About 90GW of battery energy storage is either operational or sitting in Britain's reformed connections queue, Ofgem said in its 17 September statement, against the roughly 29GW the system is projected to need by 2035. Of that total, 7GW is already running and 83GW is prioritised on the shortlist the National Energy System Operator drew up after cutting 40% of grid-level battery capacity from the queue in 2025 for failing its criteria.

A fee that switches itself on

The charge is called the Oversubscribed Technologies Commitment Fee, and it did not originate with the regulator. The developer Field Energy Limited raised it as modification CMP470 to the Connection and Use of System Code on 20 March 2026, according to Ofgem's urgency decision on the proposal. Under the original version, which Ofgem is now minded to approve, the fee activates once a technology exceeds its target requirement by more than 50% and stops applying once oversubscription falls below 25%. NESO would monitor those levels, decide when the fee is triggered or escalated, and manage the securities, which can take the form of letters of credit, guarantees or cash collateral.

Projects whose existing securities already sit above the applicable fee level would not have to post more solely because of CMP470. Where a project leaves the queue without energising and the fee forms part of its cancellation charge, Ofgem says the money returns to consumers through Transmission Network Use of System charges rather than staying with the network companies.

Six alternatives, and a number that does not reconcile

The consultation puts the original proposal alongside six Workgroup Alternative CUSC Modifications that vary the level of the fee, how long it applies, how it is applied and how co-located projects are treated. That spread is a fair indication that the industry workgroup did not converge on an answer. Responses are due by 5pm on 1 October 2026 at the regulator's connections policy inbox, and a final decision is expected later this year.

One set of figures in Ofgem's own notes to editors sits oddly. The regulator puts the surplus at 14.8GW above NESO's 24GW estimate for the 2030 clean power target and 61.7GW above the 29GW projected for 2035. The second implies a queue of about 90.7GW, matching the headline number; the first implies about 38.8GW. Ofgem does not explain the difference in the press notice, and the reasoning sits in a separate impact assessment published with the consultation.

The honest reading is that a fee designed by a battery developer, and now backed by the regulator, works in favour of developers who already have funding in place. Field Energy said on its LinkedIn account that it had led development of the modification and welcomed Ofgem's minded-to position on its original solution. Clearing speculative projects raises the value of every slot that survives, and the companies best placed to post security at £25,000 per megawatt are the ones least likely to be cleared out.

Ofgem is running a version of the same play on the demand side. In July it consulted on a commitment fee and clearer progress milestones for speculative data centre connections, and in April it warned jointly with the Department for Energy Security and Net Zero, in an open letter on connections reform, that the battery pipeline already far exceeded what a clean power system would require. What is not yet known is how many of the 83GW on the shortlist will simply walk away once a price is attached to waiting.