The Energy Transition | Ofgem confirms plans to fast track GB grid connections

This week we look at Ofgem's confirmation of new grid connection plans, the International Maritime Organization's newly published Net Zero framework and the AI Energy Council's first meeting in Westminster.

Ofgem confirms plans to fast-track grid connections

Ofgem has approved detailed plans to overhaul the electricity connections system and speed up the roll-out of viable clean energy projects by stopping 'zombie' projects with remote prospects of reaching practical completion clogging up the connections queue.

The energy regulator's decision follows its consultation with industry that opened on 14 February and sets out changes to the regulatory framework to implement connections reform. It formally approves National Energy System Operator's (NESO) "Target Model Option 4+" (TM04+) proposals that were submitted in December 2024. The reform package was developed through extensive consultation between NESO, industry stakeholders and the government.

The reforms seek to address long wait times of up to 15 years and slow connection rates. Projects that are 'ready' will be prioritised in a bid to address the 750GW bottleneck of excess capacity in the queue, which represents four times what is required by 2030 and double what will be needed by 2050. Collectively, these problems are leading to inefficient network planning and undermining investor confidence.

The TM04+ package reforms the existing queue to introduce a gated approach to connections, which prioritises projects in a "Gate 2" queue that meet the Readiness Criteria and Strategic Alignment Criteria – those that are "ready" and "needed". Projects that do not meet the criteria are issued "Gate 1" offers, with connection dates and locations offered on an indicative basis only. These projects can reapply in future once they consider they meet the criteria, and any new projects applying to join the queue will need to demonstrate their ability to meet the established criteria.

The reforms aim to create a connections queue that prioritises projects that are demonstrably viable, have progressed, are aligned with the regional capacity allowances for each technology detailed under the Clean Power 2030 Action Plan (CP30) and best meet the system's need.

Ofgem wants the reforms to improve network planning and enable the construction required to connect projects rapidly without requiring multi-billion pound expenditure for unnecessary grid reinforcement. The regulator also hopes to increase investor confidence by signalling to investors that projects are viable. NESO has suggested this could unlock up to £40 billion a year of mainly private investment, thereby growing the economy and creating jobs. Ofgem acknowledges, however, that investor confidence may be diminished in the short-term due to the impact on those projects moved to Gate 1 and on all projects during the implementation period.

The government views the reform of the electricity connections process as urgent and critical for the cost-effective delivery of CP30 and achieve net zero by 2050. Its policy is intended to reduce UK reliance on fossil fuels, improve security of supply by generating homegrown electricity and protect consumers from exposure to future price spikes in global markets.

International Maritime Organization publishes its Net-Zero framework

The International Maritime Organization (IMO) has approved draft measures designed to achieve Net-Zero greenhouse gas (GHG) emissions from the shipping industry by 2050. The measures are slated to become legally binding as part of the IMO's "Net-Zero framework", which will be brought into force in 2027 as amendments to the International Convention for the Prevention of Pollution from Ships (Marpol). 

The measures will set mandatory global marine fuel standards and GHG pricing for the shipping industry. They will apply to large ships over 5,000 gross tonnage, which emit 85% of the total CO2 emissions in the international shipping sector.

The IMO said the decision is an "important step towards establishing a legally binding framework to reduce GHG emissions from ships globally".  The amendments aim to meet the climate targets set out in the IMO's strategy on the reduction of GHG emissions from ships. The UK government recently issued its marine decarbonisation strategy to align the domestic sector's targets with those of the IMO.

A core element of the approved Marpol amendments is the introduction of a global fuel standard mandating that ships must reduce their annual GHG fuel intensity (GFI) (that is, GHG emission per unit of energy used). The amendments will also introduce global economic measures that impose an obligation on ships emitting above GFI thresholds to balance deficit emissions and introduce financial incentives for ships using zero or near-zero GHG technologies.

The Net-Zero framework will also establish the IMO's Net-Zero Fund to collect pricing contributions from shipowners whose vessels' emissions exceed the GFI threshold. Contributions to the fund will be distributed as financial rewards to operators of low-emission ships, and will be invested in order to further develop the IMO GHG strategy and into innovations to support transition in developing economies.

The approved amendments will be circulated to IMO member states, after which they are expected to be adopted by the Marine Environment Protection Committee in October 2025 and enter into force in 2027.

AI Energy Council's first meeting agrees approach to UK policy ambitions

The UK Secretary of State for Energy Security and Net Zero, Ed Miliband, and Secretary of State for Science, Innovation and Technology, Peter Kyle met with industry representatives last week and chaired the first meeting of the newly formed AI Energy Council in Westminster. The discussions were centred around achieving the UK government's policy ambitions and how artificial intelligence (AI) can be used to help achieve them.  

Mr Kyle emphasised the widespread interest in AI Growth Zones (AIGZs), with over 200 applications from councils across the UK to be part of the scheme. The government in January outlined the introduction of AIGZs in its action plan for AI opportunities. AIGZs will benefit from streamlined planning processes, so that data centres can be fuelled by clean power.

Mr Miliband focused on the twin goals of adapting the UK's energy grid for an AI environment and implementing the technology for the benefit of the energy system.

The discussions concluded with an agreement on the council's five focus areas for the coming year. It aims to ensure the UK's energy system is prepared for the advance of AI. It will promote the use of renewable energy and sustainable solutions in AIGZs and the reliable and secure adoption of AI in the energy system, and aims to understand the role of AI in both the transition to net zero and in improving grid flexibility.

Attendees committed to quarterly meetings to advance proposals quickly and deliver progress nationwide.

This article was written with the assistance of Ellie Smyk, Adam Budd, Imogen Drummond, trainee solicitors and Sumaiya Hafiza, solicitor apprentice.