Guest series with Alasdair MacMillan, Policy Lead – Electricity Connections, Ofgem

00:00:05 – Catherine Cleary
Hello and welcome to the Roadnight Taylor podcast. Today we’ve got a very special guest here, Ali MacMillan from Ofgem. So we are talking about Connections Reform and the end-to-end review and the regulator’s review.

So, Ali, do you want to introduce yourself first?

00:00:19 – Ali MacMillan
Yeah, hi, thanks Catherine.

So, I’m Ali MacMillan, I co-lead the connections team at Ofgem, more on the sort of policy side, I guess, than my kind of co-lead, Neil, who’s kind of more of the team lead, and I lead on the end-to-end review, which we’ll come on to later.

00:00:36 – Catherine Cleary
Awesome, thank you for coming, and we’ve got Kyle Murchie from Roadnight Taylor as well.

00:00:40 – Kyle Murchie
Hi everyone.

00:00:41 – Catherine Cleary
So, I think to kind of perhaps jump into this we’re recording in December we have, you know, we’ve just sort of got through the kind of slew of consultations on Connections Reform. Yeah, well done, Kyle, and I think it’s been a busy month is probably an understatement. So, I mean, perhaps could you just give us a view, Ali, maybe zoom out a bit of the whole process, you know the kind of Connections Reform process. Has it been a good process?

00:01:11 – Ali MacMillan
It’s definitely been a fast process, and I think that’s a view that’s pervasive across industry and everybody you speak to. I mean, we can kind of go back a year to the Connections Action Plan that we published joint with government, I think it was last November. So you know there’s been a lot of kind of pace of work that’s been taking place since then and that’s been a mixture of, you know, sort of tactical initiatives that the ESO and the ENA are implementing at transmission and distribution. There’s different actions that we put on regulated parties in the Connections Action Plan and sort of stemming from that was this idea of a new reformed connections process, so sort of moving away from okay, how can we get the most out of what? What was the old first, what did we used to call it?

00:02:00 – Catherine Cleary
The first come, first served.

00:02:01 – Ali MacMillan
First come, first served model which had given us this enormous queue, which was completely oversubscribed, and the wrong mix of technologies that are inefficient for you know GB’s future need. And so there’s a need to kind of think, OK, what can we do with the current process, but also what should a new process look like? And that led us to the kind of Code Mods being raised. I think it was back in April, May sometime all the dates sort of blur into one now.

00:02:31 – Catherine Cleary
Yeah, I think April sounds about right, yeah.

00:02:33 – Ali MacMillan
And since then it’s just been an incredible pace of work. You’ll probably know better than me how many work group meetings there were on the CUSC Mods.

00:02:39 – Kyle Murchie
Yes, I probably can’t say exactly how many because I have forgotten. But yeah, we’re up there in the sort of 50 marker of work group meetings.

00:02:28 – Ali MacMillan
Right, and you know, during that period as well there was sort of a necessary pause on other…

00:02:54 – Catherine Cleary
On other Code Mods.

00:02:55 – Ali MacMillan
Other Code Mods, yeah.

00:02:56 – Catherine Cleary
Which has had quite a knock-on impact here.

00:02:58 – Ali MacMillan
Yeah, absolutely, and there’s obviously a kind of queue of, or a tranche of other problems to solve that we shouldn’t forget about; they need to be addressed once connections is done. But that just kind of gives you a sense of how much, sort of resource was required to sort of tackle this problem. In that you know that was a sort of strategic decision to pause the other Code Mods because we needed so much industry attention on Connections Reform, and so we sort of moved through the code process and what we know as Connections Reform was originally conceived as first ready, first connected. So as opposed to this sort of first-come, first-served model where, depending on when you applied to your network operator, you know you would be put in a queue and that queue’s kind of grown and grown and I know you’ve kind of gone into the history of the pods of what led us to that position.

But we needed to think about okay, that’s not working, how do we define a process that creates a kind of better queue of viable projects? Because we know there’s a lot of speculation, lots of stalled projects in there. So first ready, first connected, as it was originally conceived was all about that. And then there was this whole debate around – what readiness is you know, do you use land rights planning, etc. blah, blah, blah. And then we got into the summer and there was an election and a new government, and this new government arrived with sort of fresh energy and this kind of real drive and real commitment to a mission, the Clean Power mission, and noises started to be made around Clean Power 30. And we’d always sort of talked about Connections Reform in two horizons. So the first one was about first ready, first connected. The second horizon was about alignment with strategic planning or some sort of strategic alignment in future, yeah, which is sort of always envisaged to be the SEP, so the point in which the SEP came in, then we think about how to align the connections process to that. CP30 created an opportunity to do that strategic alignment quicker.

00:05:05 – Catherine Cleary
Yeah.

00:05:05 – Ali MacMillan
So you’re effectively sort of aligning to a pathway, government’s pathway to Clean Power 30, which of course, they commissioned NESO to advise on, and we’re expecting to see government’s plan published very soon. And we’re talking today on the, what was it the 10th?

00:05:21 – Catherine Cleary
It’s the 10th, 10th of December.

00:05:22 – Ali MacMillan
So, there’s a huge amount still to happen this year. So we’re expecting to see that plan and that led us to away from first ready, first connected, to first ready and needed, first connected. So firstly, you had to demonstrate that you were ready, that debate had kind of happened and then you also had to demonstrate that you were needed. So, does CP30 need your project? And that’s kind of led us into this position we’re in now.

The way that’s manifested itself, I guess, for industry is that you know, there’s Code Mods, there’s these new products that we know as methodologies that are sort of provided for in the codes, and that’s where sort of more of the nuts and bolts of how the process works will sit. There’s also license changes that are needed; so that’s something that obviously we as Ofgem lead on. There’s government’s work on CP30 and everything that’s gone into that and basically what that’s meant for industry is parallel work streams, lots of consultations, you know lots of input needed from effectively the same, fairly small group of people.

00:06:22 – Catherine Cleary
Yeah.

00:06:23 – Ali MacMillan
And I know that that’s a sort of tension that’s felt within industry and we are cognisant of that, and we’ve always said the process is only as good as the kind of input that it gets from a consultative sense. So, it has to be meaningful, and industry have to be able to sort of feed in and maybe in an ideal world you’d say, okay, maybe another three months would have been nice.

00:06:49 – Catherine Cleary
Yeah, I guess, to let those newer ideas bed in, because we’ve sort of, perhaps from a customer perspective, it’s been a bit back-ended. You know, we’ve almost, you know, those things have gathered momentum. And then, you know, 5th of November, we had a kind of mass release of, you know, wow, well, this is what CP30 might look like, and this is what aligning to those pots might look like. I mean, actually, that’s, you know, that’s a month ago, you know. So, I suppose we’ve both introduced the idea and consulted on it, and now you know potentially a sort of, you know, resubmitting in a very, very short window of time.

00:07:18 – Ali MacMillan
Yeah.

00:07:20 – Catherine Cleary
Do you have any? Do you feel from a regulatory perspective that, that has problems?

00:07:29 – Ali MacMillan
Yeah, the challenge is, I’d say, more than problems. You know, we need to be satisfied that when the package of products come to us for decision which we’re expecting for the end of the year that we can kind of back our decisions, whatever they might be, knowing that the consultation process was meaningful and knowing that industry had a fair crack at the whip in feeding in. And that’s something, you know we are acutely aware of and we’re doing lots of our own work within Ofgem to almost mark NESO’s homework, if you like, so to make sure that what NESO are hearing from industry that effectively they’re using to shape their products that come to us for decision, you know that we also have complete visibility and oversight of what’s in there, such that we can take as informed a view as possible ourselves.

00:08:17 – Kyle Murchie
Which is really interesting because, you know if you think about the Code Mods themselves CMP 434 and 435, and then the methodologies, most recently the Gate 2 criteria methodology and the Project Designation, you could argue that those have gone through the industry quite a few times now. They were discussed in quite a bit detail through CMP 434, they were also consulted upon there as well.

So there’s been both industry feedback within working groups and then also subsequently in other consultations before the most recent one that closed last week, I suppose the CNDM is maybe a little bit different there because I think, kind of thinking back to even sitting in the working groups, the intention was always that effectively working of a bottom-up maybe approach where it was built on top of, or can help facilitate the Gate 2 criteria and the Project Designation, fitting in kind of pulling together what was in the Code Mods, whereas now I suppose that additional layer that’s going to come in of CP30, it’s really it’s doing a little bit the bottom up, but it’s also very much top-down of how does it facilitate that CP30 layer yeah which, Catherine, as you said, we only saw this really from an industry perspective and kind of everything in one go on the 5th of November. So, to have been able to consult on that, assimilate the information, then discuss it, consult on it and then feedback was at quite a fast pace.

00:09:43 – Ali MacMillan
Yeah.

00:09:44 – Kyle Murchie
So yeah, just to kind of hear your views on…

00:09:47 – Ali MacMillan
Yeah, I think it’s absolutely fair that you know the CNDM is probably the area that’s maybe had sort of least opportunity for kind of industry feedback to sort of shape what that end product will be. And I think we’re expecting to see some more information over the coming days from NESA about some basically some additional detail, like within CNDM and the process of how that works. And I think it’s sort of incumbent on us as Ofgem to sort of make sure that, okay, are we satisfied that the bar has been met effectively? Because these consultations you know, they’re obviously not subject to a governance process like you know the Code Mods are, or license changes are. So there’s that sort of open question about okay, what is meaningful consultation; if it was happening as part of a governance process that’s enshrined, then at least you know that you’ve followed due process. It’s a bit more difficult to ascertain that when it comes to the methodology. So, it’s really important that we satisfy ourselves that you know the bar hasn’t been reached where we might have to say actually we think a second consultation might be needed here.

00:11:02 – Kyle Murchie
Yeah, because it’s that trade-off between you could say well, on one hand there may be a lot of responses, a lot of good quality responses, a lot of significant information in some of those responses, but if it’s only one iteration or responses on the first iteration and not responses on several iterations, it’s that balance between volume and quality, alongside the number of iterations that the industry has been able to have.

00:11:27 – Ali MacMillan
Yeah, you know yeah, absolutely, but I guess we mustn’t lose sight of what we talked back to the original question about has this been a good process? I think it’s been driven by a need to kind of sort this out very quickly, and it’s the same argument that you can make for you know the SSEP, when the SSEP comes out. You know, let’s not and I know this was sort of in the press recently, but let’s not take forever to produce the perfect SSEP…

00:11:54 – Catherine Cleary
80-20 rule.

00:11:56 – Ali MacMillan
Yeah, exactly, and leave it so long that actually you don’t leave enough time at the end to actually realise any benefit from it.
And clearly you know this is a very high impact, hopefully a very high impact set of reforms across the whole energy trilemma. And the sooner we think, anyway, the sooner we get a good first ready, first needed connections process in place, the sooner we can start seeing benefits on, you know, affordability, net zero which has clearly been the kind of big one throughout this process and security of supply, and that’s really what’s driving the pace.

So, you’ve got to find the balance between, you know, running a good enough process, such that it gets you to an answer and allows you to enjoy the benefits that we expect this to bring, as opposed to taking kind of longer to optimise and maybe kind of losing some of that benefit at the end.

00:12:47 – Catherine Cleary
Yeah, and the sort of great being the enemy of the good, I suppose in that sense yeah, and I suppose which is a very you know, I think that’s a very pertinent point and it’s quite a, it’s perhaps quite easy to kind of like sagely nod and say, yes, that seems like a really good kind of compromise, until suddenly it’s sort of your project that’s being thrown out of the queue, you know, perhaps because of sort of methodologies that you don’t think are perfect, and so I suppose there is a kind of fundamental question here, which is, perhaps when we hear from developers, but effectively from the outside, this probably looks a little bit like we’re basically saying does this mean that the ESO now just get to decide who gets to connect where and when? And you know, and is that, is that fair, is fair the right kind of benchmark that we should be using to determine whether this reform is successful? I don’t know if you’ve got thoughts on fairness?

00:13:36 – Ali MacMillan
Yeah, yeah. So I mean when we, you know, you hear, you hear the words sort of central planning used when we talk about needed, I think central planning evokes, you know, ideas of you know this, this very heavy hand coming from above and, you know, making very specific, acute decisions in different areas about who wins and who loses. I don’t think central planning is maybe the right phrase to use to describe what needed really is. I mean, what needed is, is effectively NESO saying okay, here’s kind of government’s plan for CP30 that we’ve advised them on, and let’s sort of break it down to what it is. It’s effectively, well, what we expect it to be. I should say we expect it to be a sort of series of pots of technologies that can connect in different areas.

00:14:23 – Catherine Cleary
Yeah.

00:14:24 – Ali MacMillan
Now, obviously…

00:14:25 – Catherine Cleary
Up to 2030?

00:14:27 – Ali MacMillan
Yeah, up to 2030, and then you know what happens beyond 2030? There’s still a kind of quite an active debate around that about kind of what you do with fares, what you do with SEP when that comes in. But we’ll kind of leave that for another day. But effectively that’s what needed is and so that means that you know NESO are or will be if all of this goes through, they’ll be sort of assessing your application against okay, do you broadly fit within, or do you fit within one of these quite broad pots you know, as set out in the government’s plan?
So it’s not a case of NESO going in and really kind of getting down into the weeds and picking winners and losers. There’s a very sort of clear set of parameters there that have been defined that ultimately you need to meet as a project and you know ultimately again back to the point, why are we doing this? You know all of those kind of big benefits. Ultimately, if your project isn’t needed, then you know, is it fair that the system accommodates you on your project, your product on the system? I mean it’s, there’s a debate around that I’d say – so fairness works both ways.

00:15:38 – Catherine Cleary
Yeah, and I suppose, being realistic as well. I guess this is all seen through that lens of, you know, the 80-20 kind of approach. So I suppose there’s a realistic, there’s got to be a realistic acknowledgement within the industry that perhaps those needed criteria may not be perfect, you know, those pot allocations may not be spot on, you know, and there are probably people sitting there thinking well, you know, at the moment it does feel like I’m being sort of penalised by a decision that says we think 90% of that solar capacity should be at distribution, for example, or something you know that a lot of people are saying. Well, actually, I think, not my specific project, but my entire sector has been, sort of you know, a decision has been made, maybe without a huge amount of published justification for that decision.

So I suppose, that there’s that kind of feeling where it’s not just someone saying this specific project of mine, it’s someone saying, well, actually, you know, there’s been what looks like a fairly arbitrary decision made as to how those technologies are split across transmission and distribution, which we’ve talked about, lots at Roadnight Taylor but, you know, also across a few sort of geographic zonal boundaries. Is that kind of a concern Ofgem hearing too?

00:16:42 – Ali MacMillan
Yeah, I mean I guess the sort of numbers it’s worth saying that are in those, those pots have effectively kind of come bottom up. You know we expect them to have come bottom up from the DNOs around.

You know this is what’s been sort of broadly in our queue, and similarly from the NESA at transmission. So, you’re sort of taking, you know what’s coming down the conveyor belt anyway and you’re doing a bit of optimisation to say, well, actually we’ve got 10 times too much battery storage, we’ve got too much solar that’s inefficient for the system in certain areas. So, there’s a degree of optimisation, as I understand it, that’s sort of taken place to kind of get to that final number. But I mean, I wouldn’t say it’s arbitrary, I think it’s very well informed and I guess at the back end of this, only time will tell as to you know, the winners that are created and the losers that are created, because there will be some losers. But ultimately, if you’re a loser because the system really just does not need your project, I agree that’s different from if you’re a loser because the process has been unfair and these numbers that underpin this process are arbitrary, and again, it’s incumbent on us to, I guess, do what we can to make sure that’s not the case.

00:18:01 – Catherine Cleary
Yeah, that they’re not arbitrary numbers.

Kyle, I saw your face, so do you want to come in on that?

00:18:04 – Kyle Murchie
Just when you said kind of well-informed because I think there’s maybe that nuance of you know from where we started and from getting a starting point and creating some sort of numbers well, you could argue, yes, they’ve taken, you know, a certain level of information, the best information available, within a very short period of time to create those pots. You know, noting that the information that’s currently out there is obviously indicative. It’s in draft format and not version what – 0.02. So, it’s intended that those will change. But I think from what we see, even just adding up some of the numbers, even speaking to not only developers but also some of the networks, there’s definitely a lot of holes in those numbers. But also, I think you mentioned the batteries, I think that’s maybe a clearer case. You could argue that, you know, comparing to the FES, for example, well, if you’re looking nationally, there’s significant oversubscription. But when you then start looking at you know, Catherine, as you were saying, they are between maybe two different zones. Now, I know that NESO’s intention is that, well, there would be substitution between zones and that ability would be there. But I think as a developer sitting there you’re saying, well, hold on, I’m a transmission connected solar, for example. But actually, if I was now just in the same project but now connected to distribution level, then I would be available to effectively move forward in theory, see when we’ve been looking at the, when we start to kind of layer on the network aspects and the kind of limitations, that may be SGT level and thinking about also even just some other basic concepts around you know – what can you realistically get planning for in those sorts of areas? It’s not clear how much of that’s yet been taken into those numbers. It’s not saying that that wouldn’t come in the future, but at the moment I think from those numbers that have been presented, I think the danger is there’s unintended consequences and also pushing forward certain behaviours in the market that maybe were slightly unintended.

I know it’s a challenge because you’ve got quite a limited timeframe, but I don’t know is that something you’ve been hearing about as well in terms of data quality and, I suppose, concerns about how those pots are set now, but also how they’ll change in the future.

00:20:22 – Ali MacMillan
Yeah, I mean, I guess it absolutely is a challenge for NESO is to make sure that those numbers are sort of fair and, like you say, there are protections or there’s flexibilities in place like substitutability across zones or maybe even substitutability between transmission and distribution, if indeed the numbers are kind of different, so you have a distribution specific number and a transmission specific number in a particular zone. If that’s the case, then again back to the point before you know, it’s absolutely incumbent on NESO to make sure that you know fairness, it sort of underpins the process and you’re not I guess there aren’t unintended consequences that negatively impact a project for something as arbitrary as the wrong number in the wrong place, for example.

So yeah, I completely agree, particularly because the process has been moving so fast and how information has flowed, but that there probably are developers out there that are concerned about this and we have to make sure that investor confidence is taken into account and protected as far as possible throughout all of this. That’s critically important, but yeah, I could appreciate that you know, some developers may have some of those concerns and we’ll just have to see kind of how they manifest going forward.

00:21:42 – Kyle Murchie
And Catherine, something we were chatting about earlier actually was when you were talking about investor confidence and developer concerns, you know, we are seeing quite a lot of developers that are concerned, but only concerned because they’re just hearing about or just starting to better understand what CP30, that kind of CP30 layer is like, you know they are effectively back to what TMO4+ was initially conceived as, I suppose, if you think back to the summer, you know, Chris Stark and Mission Control was only set up on the 9th of July and all of a sudden we’re now here talking about quite a detailed and complicated layer. So, I’m just thinking are we in a situation where there is quite a bit of a gap? You’ve got a lot of very informed developers and the informed part of the community who are actively engaged, who have been actively engaging and through working groups you’ve then probably got others that are aware, but less actively involved themselves. But they understand there’s some level of risk and maybe opportunity, and then it’s probably a very significant proportion that don’t actually have visibility. They don’t know that their project that they are currently working on and currently investing in potentially might not be a viable project in six months’ time.

00:22:56 – Ali MacMillan
Yeah, and you know the information flow out of this process is the same as I guess you sort of see with any public consultation process, that the most invested in or the most engaged are always clearly the ones that are going to be kind of be most aware and be across the detail to the greatest extent. And I mustn’t forget about the silent majority who and I’m sure there are developers out there that don’t even know Connections Reform is a taller thing because you know effectively why they would, and that’s something we’ve always been, you know we’ve tried to protect against by, so we publish a blog every month, you know from connections following the monthly delivery board, really with the intent to kind of update people in lay terms about kind of what’s being discussed, what the outcome of recent discussions were, what’s coming next. There’s obviously a very active debate, as I understand it, although I’m not on LinkedIn, I understand there’s quite a lot of active debate on LinkedIn.

But I guess really we’re sort of relying on word of mouth and we’re relying on, I guess, the likes of yourselves to just kind of get that word out there to the developer community that this is happening because it’s true that there are, you know, the corners of the developer community that are going to be very difficult to reach.

00:24:17 – Catherine Cleary
And I suppose you know that comes back really just to your point about meaningful consultation. You know, in some ways it’s sort of a best efforts, isn’t it? You know we can only do what we can do as an industry. But then it’s perhaps part of that review to say are there any really big gaps of people who didn’t respond to this? Is there an equal representation of things like transmission versus distribution? We’ve talked lots on other podcasts about kind of fairness between T&D customers and things like queue positions and so on, and I suppose there has been a bit of a general comment that perhaps sometimes the focus of Connections Reform feels very transmission-y, partly because it’s being done by NESO, you know who sort of feels like a transmission system operator still, and so you know, is there a kind of fundamental concern about under-representation of distribution customers? But I mean, in some ways that probably brings us on to the kind of other part that we wanted to talk about today, which is the kind of end-to-end review and looking more at that kind of journey.

I mean, was there anything you wanted to add on that kind of transmission versus distribution sort of representation piece?

00:25:17 – Ali MacMillan
Yeah, I mean I guess it probably is worth saying that you know Connections Reform through the CUSC Mods is largely a transmission process and …

00:25:27 – Catherine Cleary
Just knowing what a Cusc Mod is, you know, you’re very unlikely to do that if you’re a five-megawatt distribution customer.

00:25:32 – Ali MacMillan
Yeah, exactly yeah, and distribution are sort of naturally, I think it’s fair to say the policy takers of Connections Reform and you’re putting in a new process at transmission and then you’re effectively saying to DNOs through the ENA right now you need to come up with your own process to plug into this, you know, effectively we’ll give you some pots and you have to then figure out how to fill them and then send those projects back to us through, I guess what would have been the old project progression route, but I think it’s now called…

00:26:10 – Catherine Cleary
It’s the TEA.

00:26:11 – Ali MacMillan
Transmission, evaluation, assessment.
The TEA process, yeah.

And that’s very much like where the DNO’s distribution is now. So, they’re sort of frantically working to make sure that they can create a process that when again, if this is all approved early next year, when we expect to take decisions and we then go to that Gate 2 to whole queue process, because I guess something we haven’t talked about is that this is a retrospective action – this is the reopening of connection agreements.

00:26:43 – Catherine Cleary
We have talked about that in lots of other podcasts.

00:26:44 – Ali MacMillan
We haven’t touched on it today but you’re effectively taking the 740 gig, I think it is now across transmission and distribution, opening everything up and then reordering it. That’s what Gate 2 to whole queue is. And then you’ve got the new process that deals with new applications in the future and the detail tells us how that works at transmission. But there is still this question of how the DNOs are going to reorder their queue. I know you had a very active spirited debate on that recently. But distribution really kind of figuring those things out now.

00:27:20 – Kyle Murchie
Yeah, because actually if you’re a distribution connected customer and even if you’re relatively well informed, the last communication you may have seen would have been the RFI to gain some understanding of whether you’d be Gate 2 ready for implementation. So, in your head you understand you maybe have gone and reviewed documents at that particular point in time before responding to that, but there wouldn’t really been a natural trigger to then say, oh, I’m going to now start relooking to see what else has come along.

So, that CP30 layer probably wouldn’t have even registered for most of those developers, unless they are involved at both T&D or very heavily involved in the industry developments. Because even at you know DNO events, I think one of the challenges you know DNOs have mentioned absolutely and communicated on CP30 and Connections Reform. But the later detail hasn’t been there and one of the arguments given is it’s still developing at a transmission level so they need to understand what that looks like to then be able to really pick it up and say right now, let’s build a process that fits into that. But all that means, surely, is that we’re going to be well into next year before that process for those customers is understood. But we’re probably already implementing, you know if it’s all implemented, from Q2 2025, it feels like a very short space of time for embedded customers compared to those at transmission.

00:28:44 – Ali MacMillan
Yeah, I think that’s a fair point.

00:28:48 – Catherine Cleary
I guess that podcast, which we’ll pop a link into, looks at one specific issue on the transmission/distribution, how these relative queue positions work out. It was all spurred by some comments we had back on a webinar that we’d done on Connections Reform, Roadnight Taylor have lots of distribution connecting customers and sort of people who share portfolios across the two and there does always seem to be quite, you know, I think there is a very strong feeling sometimes that distribution customers have sort of been done down or there’s a lot of kind of hurt there about sort of past inequalities. And so, we were really excited to have you on, Ali, to talk about the end-to-end review process, because I think it’s going to be really welcomed by so many customers as an opportunity to sort of listen to some of that pain, where were the pain points? Learn from it and potentially implement some pretty sort of hard-hitting policies to stop some of those sort of unintended practices which have gone on. So do you want to just do a quick intro as to what the end-to-end review is and the consultation that’s open now?

00:29:48 – Ali MacMillan
Yeah, yeah, absolutely. So. this is another action that stems back to the Connections Action Plan. So, back in November 2023, this was an action we put on ourselves as The Regulator to say, ok, we have a regulatory framework that underpins a connections process, let’s take the opportunity to open up all aspects of the regulatory framework and understand where it might need strengthened or improved, or even softened if that’s the right answer in some cases, to drive the right behaviours and outcomes we need to see in the new process.

So, we’ve always internally, within Ofgem anyway, we’ve always talked about there being kind of two pathways to the sort of new utopian connections process – one of which is you deal with the process itself, so the mechanics of that, and that’s what Connections Reform is. But the other pathway, if you like, is to say ok, within that process what do we need to do within the regulations to make sure that we’re basically getting the best outcomes for developing customers in a manner that’s fair to regulated parties in the new process. So that’s what the end-to-end review is.

We call it the end-to-end review because it’s basically looking at the customer journey from the original conception, in someone’s head, of the idea of a connection, right through to energisation, and there are a number of interactions along the journey that the customer must necessarily take with the regulated party. There’s a number of actions that the regulated party must take to get that idea through to energisation. So it’s looking at the whole journey and saying which bits are working, which are not and what should we do about them.

00:31:38 – Catherine Cleary
And I think it’s so welcome in some ways because it does cover that whole journey, because we often, when we talk about connections, we are often really very focused on the front end of connections, to the point where you get and sign a connection offer or a connection agreement and actually the end-to-end review proposes things like, or looks at things like, should there be more sort of stringent targets or requirements and obligations on the TO or network operator to meet really specific connection deadlines.

So, if they give you an offer that says you’re going to connect you in October 2027, should there be a penalty for them if they don’t? You know, which I think a lot of people will really resonate with, you know, because the kind of the value of that piece of paper that you get, it’s got a really well-regulated process that says you must issue the connection offer within 90 days. But then actually what happens after that point, once the customer’s accepted, there’s amazingly little regulation really, is there. So, a TO could be multiple years later, a DNO could not submit a project progression and actually there are no regulatory actions for people to take. So that was one point of that end-to-end review that really stood out for me, actually the kind of making it equitable so that if we’re placing obligations like milestones on the customer connecting, we are also placing significant obligations on the network operator or the licensed party to meet those.

00:32:57 – Ali MacMillan
Yeah, absolutely so what it is, it’s a sort of rebalancing of the scales, if you like. So we expect the Connections Reform, the new process, to basically make life a bit easier for regulated parties but effectively make life harder for developers, because you’ve now got to do more to get into the queue and you’ve now got to do more to stay in the queue.

00:33:20 – Catherine Cleary
Raise that bar, yeah.

00:33:23 – Ali MacMillan
What we see the end-to-end review is doing is basically saying, okay, well, how do we, I guess, rebalance the scales and make it in a commensurate manner, like increase what we need from regulated parties and maybe make life a bit easier and a bit nicer, if you like, for connecting customers, like throughout the process. So you know, driving up standards of service, more stringent requirements at different parts of the process on timeliness, and basically trying to get to a point at which we’ve got a fair set of connections regulations that mean that the regulated party is absolutely held to account for standards of service provided to the customer and, effectively, the timeliness of their connection.

00:34:08 – Catherine Cleary
And there are sort of three points, that kind of almost as a pincer movement, try and sort of lock that down, what that good service looks like. Because there’s both suggesting that there might be, you know, need to be a kind of obligation or a penalty for late delivery on the part of a network operator. But combined with that, because obviously if we told everyone that you know the network operators were going to have huge liquidated damages if they were even a day late, they might just write us all connection offers which says you can connect in 2040. So you’ve kind of combined with that your other kind of two points. You’ve asked for sort of ambition in accelerating connections, and also I liked seeing that kind of quality, actually quality assurance, because I think we can all say that over the last few years we’ve all seen a kind of a degradation in the level of either kind of thought or quality that’s been able to go into connection offers. So I think that those kind of three… was that kind of deliberate to sort of try and say well, we want to incentivise those right behaviours, so when we’re saying deliver on time, we don’t mean just give people a really long connection date.

00:35:14 – Ali MacMillan
Yeah. So when we were thinking about how to split up all of the issues that we’re aware of, because, I guess, going back to basics before I come on to that point, what this effectively is, it’s an airing of all of the substantive issues that we’re aware of that connecting customers face throughout the process, and not just connecting customers, but also there’s some bits and pieces in there that have come directly from the DNOs or the TOs or NESO, where they’ve said, well, this bit isn’t quite right. So, it’s effectively an airing of all the issues and then thinking about, okay, how to group them efficiently and sensibly and then how to sort of target action to drive improvements against the different groups of issues. So, we’ve come up with seven themes and you’ve just described I think it was themes three, four and five. So, it became quite clear that and this won’t be news to you there’s a lot of frustration, as you already said, about the ability at times for a network company to unilaterally shift your date back and you effectively have no comeback as the customer. You’ve just got to suck it up and take it. Well, that’s something that clearly we’re going to try and address through this process. And the obvious thing to do there is to hold the network company to greater account against the connection date such that that can’t happen anymore. And it has to be done in a fair manner because clearly there are circumstances occasionally out with the network company’s control that might push a date back. But if you are going to hold them to greater account then you need to make sure they retain that ambition. And there is some wording in the regulatory framework now around, I think it’s something like time being of the essence or something it says in the license. So what the consultation is testing is that enough? We don’t want to be in a situation where everybody gets really kind of long connection dates because, like you say, networks are held to a greater account, potentially through liquidated damages, against those dates.
And then you come on to the quality point and there has been a lot of focus to date in the regulatory framework about the timeliness within which certain processes have to happen and I think it’s fair to say that in a lot of cases that’s not really benefiting anyone, like the customer or the network.

00:37:29 – Catherine Cleary
I mean, I’ve had conversations where you know you might have been talking to a network operator that said, actually this is really complicated. And you might have a customer that says I’m happy to sort of pause the clock for you to go and think about this some more. And a regulatory person from that network operator will say I’m sorry, you know, we can’t really do that. There isn’t a stop button, we have to carry on and you’ll have to Mod App later down the line or something. Like you say, it’s just inefficient.

00:37:54 – Ali MacMillan
Exactly, and the behaviours that drive, because that’s something we’ve always got to think about. So we write these regulations but ultimately what behaviours is it driving within the regulated party. And what they’re doing is they’re effectively having to sort of scramble resource into meeting these timeliness requirements, which sort of impacts on other areas of their business…

00:38:15 – Catherine Cleary
Anything that sits outside a timeliness requirement might take a year to do because they can’t prioritise it.

0:38:23 – Ali MacMillan
Exactly. So they focus on the timeliness and then ultimately, on the 59th day of a 60-day requirement or whatever it might be, the offer goes out, but the regulated party would rather have had more time to make that better, and the customer would clearly have liked them to have taken longer to make that better. And when we talk about quality, we mean what underpins the offer, the level of analysis and detail, that sort of go has gone into the offer, as well as you the product that they’re presented with. So how understandable is it? How clear and transparent is it for the customer? And that’s what we mean when we talk about quality. So, yes, there’s a package there of quality, timeliness and ambition and we need to strike the balance there. And so very interesting to see what, see what we get back.

00:39:09 – Catherine Cleary
I have a question about cost, because that’s something we haven’t talked about yet in terms of the end-to-end review. We’re always, at Roadnight Taylor, championing the SGT charging issue – supergrid transformer charging. We’ve wrote an open letter a while ago and have had some industry discussions, but this isn’t somewhere which has made very much progress against things like Connections Reform. Is it something which is going to be covered by the end-to-end review?

00:39:32 – Ali MacMillan
Uh, no, and I hope I remembered to call out in the review that it deliberately, we deliberately weren’t covering it, and I can’t remember if I did or not. That was certainly my intention!

00:39:41 – Catherine Cleary
If not, you might get lots of responses talking about it.

00:39:45 – Ali MacMillan
Hopefully everybody listens to this podcast and then knows not to respond on that point! Yeah, I mean SGT reinforcement, cost apportionment is clearly a very live issue. It’s something that you know we called out in the Connections Action Plan and Roadnight Taylor had very helpfully written an open letter. I think it was maybe in the middle of last year…

00:40:07 – Catherine Cleary
Yeah, it’s about 18 months ago.

00:40:08 – Ali MacMillan
…setting out the sort of issues and the acute problems that it was creating for developers and the knock-on impacts. It’s a difficult area to solve because it does require sort of policy direction and steer from other areas like wider charging reform, REMA, etc. So there has been, you know, I think, a good amount of discussion this year you know, Ofgem, ENA, there has been, you know, I think, a good amount of discussion this year you know, Ofgem, ENA, industry, TO’s etc. about what to do about this and it does seem to be able to go so far before it has to sort of stop and say, okay, we need to wait for x, y and z to happen to inform it. So, regrettably, I think there has been less progress possible on that specific point, but it’s there.

00:40:56 – Catherine Cleary
So, although it may be a pain point for people on their customer journey from sort of end to end, this one isn’t the mechanism to feed it back.

00:41:05 – Ali MacMillan
No, but I would say look, this is a mechanism. So if you have views on it, then please actually do use this forum to air them, because, I guess from The Regulator’s perspective, you know, we consult on things, we ask questions. Sometimes we get sort of unsolicited responses about other things, but that’s useful. It can be very useful. It can not be useful! But it can be very useful, so if there are views out there that you don’t feel, as a stakeholder, have been or you’ve seen them reflected in progress on SGT reinforcement cost apportion, then yeah, do use this mechanism to feed that back.

00:41:45 – Kyle Murchie
And the tranches are wide enough that they do seem to allow quite a lot of coverage. For example, even just on costs, if it was more general on cost increases that are being seen within offers and that quality aspect. Quality seems to be quite an easy area to put some of those key points into.

00:42:04 – Ali MacMillan
Yeah, that’s fair.

00:42:05 – Kyle Murchie
I think it’s good to actually call out that, because for a lot of our listeners and a lot of people that we’ve been talking to, I think the general expectation was that, oh well, this is another consultation on Connections Reform, but actually it’s really not. It’s on the whole connections process. I’m sure there’s reform aspects that I think will definitely flow in.

One that we’re going to touch on is data and data quality, data visibility, data transparency. Obviously, that was really important before, in today’s world, it’s extremely important and we need to be raising that bar. But as soon as we start to bring in everything we’ve just talked about this year and all the reforms, that bar just goes through the roof. You know, in terms of where we actually need to get to and the roadmap, what’s going to look in 2025 and then beyond, because realistically, that visibility can’t be all there within 2025, but we need to, as a community, all understand where that’s going to. So are you looking for, in that response, to the data tranche, are you looking for responses really thinking about that longer-term approach? What would you like to get out of that?

00:43:14 – Ali MacMillan
Yeah, so data is such a, data visibility, accuracy, openness, however you want to call it. I mean, it’s such a massive area. So I think this is theme one, if I remember rightly?

00:43:24 – Catherine Cleary
Yeah, I like the fact it came out as number one. I thought, yeah, that’s good, because it’s the first thing I was going to write back on as well.

00:43:30 – Ali MacMillan
Okay. And obviously there has been a lot of work done, whether it’s through regulation, so, say, through the price controls, because there have been certain requirements for data publication that have fed through the price controls, or be it something that sat in regulation prior, or be it something that DNOs or TOs, NESO, have done off their own backs. But it felt like it absolutely is the right place to pull all of that together and say, okay, there’s so much data that exists, some regulated parties are publishing it, some aren’t. Some have created these really nice new interfaces where the data can be more easily absorbed and used.
And, ultimately, what we’re trying to do here, when we talk about data availability – I mean this is really about informing and educating the developer community and driving up quality of connection offers and managing customer expectations. And when you speak to network companies, they will say, oh this would be really good for us because that means, the better informed the customer is the more ability they have to absorb information about where there might be capacity on the network or what might sit in front of me in the queue, what costs might I be exposed to if I try and connect over here. All of that better informs the customer and means that they need less support and hand-holding through the process and they basically enter the process with a more educated set of expectations. So this really is…

00:45:06 – Catherine Cleary
It’s a brilliant theory!

0:45:09 – Ali MacMillan
It’s a brilliant theory, but this feels to me like a win-win, like we get the data bit right and everybody wins. And the question is how do we do that? Like what are the blockers? What is it that’s preventing this piece of data that’d be incredibly useful to that developer, what’s preventing it being published, and how can we unblock that?

00:45:25 – Catherine Cleary
And I think that’s really important actually, that we do give, as an industry, we give you guys, The Regulators, some clear feedback, because I think probably lots of listeners will have sat in conversations where they’ve said things like you know, why can’t I have a list of demand customers? You know a demand register, for example. That’s been requested from NESO quite significantly in the last sort of six months or so. There’s been similar questions at distribution level about the ECR covers generation, doesn’t cover demand. And a lot of the time I think there is a perception within network operators that their hands are bound by contract clauses or confidentiality and so, therefore, there are barriers to them releasing this. Or I think NESO recently said they think it will take them 12 to 18 months to produce a demand register and we probably think, why isn’t it a spreadsheet that we could do in a couple of weeks?

So I think almost bringing that challenge of saying well, actually, right now you’ve got people who are saying I need to know about demand connections as well as generation. If you’re going to divide up the country into these kind of zones, I need to be able to have a map of those zones. If you’re going to publish some bar charts, I want to know what the actual numbers are behind the bar charts. So you might get some good shopping lists, you know, back of people saying actually this is the data I need right now. You know, and here are some excuses I’ve been given about why it was hard, and we need you to unpick that.

00:46:51 – Ali MacMillan
Yeah, and look, that’s certainly the approach I want to take to this. So, I basically want to hear everything that a developer needs to see and we want to understand why is that not currently the case. And then we need to think about OK, what do we need to do to unblock that. Because this isn’t just a connections issue, I mean as the whole, as every industry has effectively digitized, there’s enormous amounts of data being produced everywhere and there are lots of sort of reasons you know, some good, some bad as to why data just isn’t reaching the end user in a way that’s useful and usable. And it can seem a bit mystifying, I think, when you think about connections as a very high-tech digital industry, if you like. Why are we still lagging behind on data availability and visibility? It doesn’t make sense.

I think this is the absolute place to invite everybody to tell us what they want to see and then we can figure out how we can solve that. And I should say, I don’t want this to seem like an attack on regulated parties, as they are doing a lot of good work in certain areas with data, and I think we need to call that out. The single digital view, for example, they’ve all developed tools this year which allow customers, the basic sort of visualisation platforms to allow customers to see some of this data. There’s a very specific proposal in the document which is around a kind of ongoing regulatory requirement to continuously maintain and improve those tools. But there’s also the question of should we really be targeting our attention on the networks producing their tools, or should we be more thinking about let’s just get the networks to make the data available in a usable format such that the market can then pick that data up, and then, through market dynamics, you end up with a really, really great set of tools that, ultimately, networks won’t be able to produce themselves. So where should the focus be?

00:48:47 – Catherine Cleary
Which is perhaps the way the DNOs have gone. You know, in some ways some really good stuff on sort of like the DSO data platforms, open data portals. You know brilliant provision of publicly accessible data in kind of raw data formats that then have been great sort of third-party tool developments on.

00:48:47 – Kyle Murchie
Yeah, I was just going to go back to ICE – that the ICE program really did help drive some of that forward, with you know the ECR coming out and that really made that happen.

0:49:13 – Catherine Cleary
ICE – you’ll have to remind us what that was, but you mean competition and connections?

00:49:16 – Kyle Murchie
Yes, yeah, but actually I suppose an unintended consequence of making that change so again, thinking about between price and price controls and those incentives changing, was that you ended up with those actual teams that were developing, those in DNOs, then end up changing. So, although we’ve driven new outputs through likes of open data and then, as you said, those kind of visualization tools more recently, it does, it’s just thinking about that kind of knock-on impact, what we’ve seen in the past and, I suppose, kind of learning from that too.

When you’re talking about just that general open data and being able to utilise that, I think something that’s going to come up actually at quite a few industry working groups more recently is the idea of being able to not just collate data from the DNOs, because the DNOs, or networks in general, are obviously collating that information from customers. So, having an easy ability for, whether it’s industry bodies or developers directly, to say well, that data, that’s my data and that’s wrong. You’ve got the wrong connection data in there or you’ve got the wrong. You know we’ve novated but you haven’t updated that information. How can they go in and ultimately make that change more easily? I’m not necessarily saying like Wikipedia where people can just start writing it. You could have the data quality there – just delete these! Oh, I don’t like these! These are my competitors, let’s just delete their lines! Not getting that level of flexibility! But how can those be more central, a single source of truth and then also the ability to more easily update your own data.

0:50:49 – Catherine Cleary
So really, the single digital view needs to be renamed as Connectopedia!

00:50:53 – Kyle Murchie
Connectopedia!

0:50:54 – Ali MacMillan
You heard it here first!

00:50:57 – Catherine Cleary
We have chatted for ages about all of this good stuff. Ali, presumably there’s a deadline for people to respond to the end-to-end review?

00:51:04 – Ali MacMillan
Yeah, look, I mean hands up, this hasn’t come out at the best time for the industry!

00:51:10 – Catherine Cleary
I’ll be doing it on Christmas Eve, don’t worry!

00:51:11 – Ali MacMillan
Good, good – I’m glad to hear that!

But yeah, I mean, look, 13th January is the deadline that we put for responses. Again, we’re very cognizant of the pressures on industry. I would expect it to be again the same people that are largely feeding into this process that we expect to be feeding into the various consultations on Connections Reform. Do just reach out if anyone’s struggling with that deadline. This is a process that is absolutely only as good as the information that comes back in response to it. So that’s the focus.

00:51:48 – Catherine Cleary
So don’t let that 13 January deadline put people off responding.

00:51:51 – Ali MacMillan
No, if they need longer just reach out, and maybe, if a few people give that view, we could then think about okay, let’s just push this out a bit.

0:52:03 – Kyle Murchie
July or something like that!

00:52.06 – Ali MacMillan
Well, no, we want these reforms to the regulatory framework in as quickly as possible.

0:52:10 – Catherine Cleary
Yeah, exactly again moving at pace.

00:52.12 – Ali MacMillan
Absolutely moving at pace.

So clearly, again, there’s that trade-off. But I mean, I’m not gonna lie, the start of next year looks pretty busy for me as well, away from the end-to-end review, just of everything else connections so, I’m not sure we’d be able to do a lot with it and make any progress. So if it was into February, I don’t think that’s a disaster.

00:52:36 – Catherine Cleary
Well, we’ll be sure to post some reminders as well, I think, on LinkedIn. Just to flag this one, because it does seem like a great opportunity for developers to get some real benefits that they’ve been asking for.

00:52:47 – Ali MacMillan
Yeah, hopefully again it comes across in the consultation that nothing’s really off the table. If there’s anything that you want to air that doesn’t fit into any of those themes, don’t let that stop you. Let’s just get all the issues out in the open.

00:53:02 – Catherine Cleary
I’ve already made a mental note we’ll still include SGT charges, just to keep it…

0:53:06 – Ali MacMillan
I fully expect that![Laughing]

00:53:08 – Catherine Cleary
Fantastic! Right, well, thank you so much, Ali, for coming in!

0:53:06 – Ali MacMillan
Pleasure!

00:53:08 – Catherine Cleary
And for making it to Burford and, yeah, absolutely great to hear all of that progress. And thank you really for spearheading the end-to-end review because, as we say, seriously welcome it as a bit more of a rebalancing

00:53:08 – Ali MacMillan
Great, glad to hear it!

00:53:08 – Catherine Cleary
Thank you, Kyle.

00:53:26 – Kyle Murchie
Thank you, Catherine.