Ofgem approves CMP448: key features, implementation and industry reaction

The Office of Gas and Electricity Markets (Ofgem) has confirmed its decision to approve the National Energy System Operator’s (NESO) original CMP448 proposal. CMP448 introduces a new progression commitment fee (PCF) applicable to certain projects with a Gate 2 offer. Following the approval, implementation of CMP448 is now scheduled for 2 January 2026.

This article outlines Ofgem’s decision to approve CMP448, explains the key features of the PCF and who it applies to. We also highlight the industry reactions to the proposal and what developers can expect ahead of its implementation.

Key features of CMP448

The CMP448 modification was put forward by NESO earlier in 2025 as a way to improve the efficiency and overall health of the reformed connections queue by encouraging more regular reassessment of project viability. NESO argued that the current process does little to incentivise developers to evaluate the viability of their projects or to exit the queue where appropriate. CMP448 seeks to address this issue by introducing a fee for certain developers who terminate or reduce their capacity after receiving a Gate 2 offer but before reaching Milestone 1, thereby encouraging non-viable projects from occupying queue capacity.

Ofgem have now approved the original CMP448 proposal and implementation is scheduled for 2 January 2026.

Under the code modification proposal:

The fee will initially remain dormant from 2 January 2026, set at £0 per MW, until a defined activation threshold is reached.
If the cumulative MW capacity of projects that are terminated from the Gate 2 queue due to failure to meet Milestone 1 exceeds 6,500 MW, NESO will have discretion as to whether to activate the PCF.
Once activated, the charge will start at £2,500 per MW of contracted capacity. The PCF will increase by £2,500 per MW every six months, up to a cap of £10,000 per MW for each individual project.
Ofgem will need to approve NESO’s activation decision.
If the PCF is activated, developers will be required to post a security against the PCF applicable to their project.
The security will remain in place until the developer has achieved Milestone 1. The securities posted for PCF will be returned once a project achieves Milestone 1.
If a project terminates or reduces capacity before reaching Milestone 1, the PCF becomes payable.

Who does it apply to?

The PCF, if activated, will apply to generation projects that meet the below criteria:

Hold transmission entry capacity, developer capacity or interconnector capacity.
Have accepted a Gate 2 offer.
Have not passed Queue Management Milestone 1.
Have more than six months to go until their Milestone 1 date when the PCF is activated or the Gate 2 offer is accepted.

NESO announced during its webinar on 11 December that if the PCF is activated, developers yet to pass Milestone 1 will have to post security against the PCF applicable to their project.

Consultation responses: industry reaction

Ofgem received 40 responses to its consultation on the minded-to approve position. On question 1, which asked whether respondents agreed with Ofgem’s minded-to position to approve the original proposal, the majority disagreed: 28 were opposed and 12 were in support.

On question 2, which invited further comments or concerns about the proposal, respondents highlighted several potential downsides, including negative impacts on competition in the connections market, increased barriers to entry for smaller developers, and heightened financial risk for projects. These concerns reflect the wider industry debate about balancing queue discipline with fair access for developers of all sizes.

In approving the original proposal, Ofgem stated that its decision reflects its view that CMP448 best supports the applicable Connection and Use of System Code objectives, particularly by promoting a more efficient connections queue.

Implementation

Implementation is set for 2 January 2026, timed to take effect before most Gate 2 connection offers are issued. Customers can expect provisions relating to CMP448 in their connection contracts.

Looking Ahead

With CMP448 now approved, attention shifts to how the PCF will interact with other elements of the wider connections reform programme, including emerging dispute guidance for the Gate 2 to Whole Queue process and ongoing efforts to improve transparency and certainty across the UK’s grid access framework.

Click here for further details and documents from Ofgem. For more information, you can access our Gate 2 timeline, or contact our energy and resource management team for support.