Will new commitment fees clear the grid—or create another barrier for viable BESS projects?
Battery energy storage will play a central role in Britain’s transition towards a cleaner and more flexible electricity system.
Battery Energy Storage Systems (BESS) can store surplus renewable electricity, respond quickly when demand increases and help balance a network increasingly supplied by intermittent solar and wind generation.
However, Britain does not currently have a shortage of proposed battery projects. It has the opposite problem.
Ofgem reports that approximately 7GW of BESS capacity is already operational, while another 83GW has secured Gate 2 status within the grid connections process.
This creates a combined pipeline of around 90GW, compared with an anticipated requirement of approximately 23–27GW by 2030 and 24–29GW by 2035.[1]
Some oversubscription is necessary. Not every project receiving a connection offer will secure planning permission, investment and land rights or progress into construction.
A healthy pipeline allows for projects to fall away without leaving the country short of the storage capacity it needs. However, a queue containing around three times the capacity Britain expects to require creates a much wider problem.
A CONNECTION OFFER DOES NOT GUARANTEE DELIVERY
A place in the connections queue does not mean a battery project will be built.
Projects may retain their position while still facing significant uncertainties around planning, funding, land, technical viability, equipment procurement and commercial returns.
Despite those uncertainties, network operators must consider contracted projects when planning future infrastructure and investment.
Ofgem estimates that approximately 58% of BESS capacity in the queue has not passed the relevant financial trigger date and therefore currently faces relatively low or no liability and security requirements.
Only around 16% has both passed the trigger date and secured planning consent.[1]
This suggests that a significant proportion of the queue has little immediate financial incentive to determine whether its projects are genuinely capable of progressing.
When speculative or commercially uncertain projects continue holding capacity, it becomes much harder for network planners to establish which substations, transmission assets and reinforcements will ultimately be needed.
It may also mean that credible projects are competing for capacity and delivery resources with developments that are unlikely ever to reach construction.
THE PROPOSED COMMITMENT FEE
Ofgem is now consulting on the introduction of an Oversubscribed Technologies Commitment Fee, known as the OTCF.
The mechanism would apply when the capacity of a particular technology materially exceeds the amount that the electricity system is expected to require.
Battery storage is currently the only technology identified as being materially oversubscribed, although the mechanism could potentially be applied to other technologies in the future.
Under the proposal, affected projects would need to provide additional financial security to retain their positions in the connections queue.
The proposed commitment would:
- Start at £3,000 per MW
- Increase if the queue remains heavily oversubscribed
- Reach a maximum of £25,000 per MW
- Stop applying when oversubscription falls below the agreed threshold
For a proposed 50MW battery project, the commitment could therefore range from £150,000 to £1.25 million, depending on the rate applied.
This is not yet a confirmed charge. Ofgem published its “minded-to” consultation on 17 September 2026, with responses invited by 1 October 2026. A final decision is expected later in 2026.[2]
WHY IS OFGEM INTERVENING?
The proposal is not intended to discourage battery storage. Britain will require significant new storage capacity as more renewable generation is connected to the system.
The objective is to distinguish between projects with a credible route towards delivery and projects that are holding valuable grid capacity without demonstrating sufficient progress or financial commitment.
Ofgem believes the fee would encourage developers to make earlier decisions about project viability.
Developments that are unlikely to proceed would have a stronger reason to withdraw, potentially releasing capacity and giving network operators a clearer picture of future requirements.
A more credible queue could:
- Improve confidence in connection dates
- Reduce unnecessary competition for grid capacity
- Support more accurate network planning
- Focus delivery resources on viable projects
- Reduce the risk of consumers funding unnecessary infrastructure
- Allow projects that are ready and needed to progress sooner
In simple terms, the connections queue needs to represent projects that are genuinely likely to be delivered—not simply projects that have secured a position.
COULD VIABLE PROJECTS BE AFFECTED?
There is an obvious counterargument.
Battery developments already require considerable expenditure before construction begins. Developers face costs relating to land, grid applications, planning, technical studies, legal work, equipment procurement and finance.
An additional financial commitment could place further pressure on smaller developers and projects with longer development programmes.
It could also favour larger organisations with greater access to capital, even where smaller developers have credible and technically viable schemes.
Co-located projects create another area of complexity. A solar farm combined with battery storage may offer different benefits from a standalone battery development, but the storage element could still be captured by the oversubscription mechanism.
Ofgem’s consultation considers different approaches to co-located projects, but its current preference is the original proposal, which includes an exemption for certain qualifying co-located developments.[1]
The challenge is therefore to remove speculative capacity without forcing credible projects out of the queue simply because they are earlier in their planning or funding journey.
WHAT SHOULD DEVELOPERS BE CONSIDERING?
Whether the original proposal is approved or amended, the direction of travel is becoming clear.
Grid capacity will increasingly be prioritised for projects that can demonstrate readiness, strategic value and a realistic route to construction.
BESS developers should be reviewing:
- Land rights and site control
- Planning status and anticipated timescales
- Grid offer conditions and milestones
- Project funding and potential financial exposure
- Technical feasibility
- Battery sizing and operating strategy
- Co-location arrangements
- Procurement and construction timescales
- The commercial case for retaining each queue position
The quality of the early technical and commercial work will become even more important.
Securing grid capacity does not automatically create a viable project. The proposed system, site constraints, connection arrangement, planning strategy and commercial model must all work together.
A NECESSARY CORRECTION—OR ANOTHER BARRIER?
Britain needs more battery storage, but it does not need an unlimited number of speculative developments occupying the connections queue.
The proposed commitment fee represents a significant change. It would place greater responsibility on developers to demonstrate that their projects are serious, adequately funded and capable of progressing.
Handled correctly, it could release capacity for viable developments and give network operators greater confidence when planning investment.
Handled poorly, it could become another financial barrier for legitimate projects and smaller developers.
The principle is difficult to argue with: valuable grid capacity should be reserved for projects with a genuine prospect of delivery.
The real question is whether the proposed fee can identify those projects fairly.
REFERENCES
- Ofgem – CMP470: Introducing an Oversubscribed Technologies Commitment Fee, 17 September 2026
- Ofgem – Ofgem moves to free up grid capacity by tackling excess battery projects
- National Energy System Operator – Connections reform timeline
RECENERGY INSIGHT
The proposed fee reflects a wider change in the UK connections market. Securing a place in the queue is no longer enough; developers will increasingly need to demonstrate that their projects are technically viable, financially credible and capable of progressing within the required timescales.
For BESS developers, this makes early feasibility work, accurate system sizing, realistic grid strategies and clearly defined project milestones more important than ever.
The battery pipeline may reduce as weaker or more speculative projects withdraw. However, credible and properly developed schemes should ultimately benefit from a more realistic connections queue and clearer network planning.
The real test will be whether the reforms release capacity quickly enough without creating unnecessary barriers for viable projects.
Ray Metcalfe – Founder & CEO
RECenergy – Renewable Energy & Infrastructure
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