Ofgem Moves to Charge Battery Developers Up to £25m Per GW to Clear Bloated Grid Queue
A proposed commitment fee on oversubscribed storage projects would cost developers up to £25,000 per MW, as 90 GW of battery capacity competes for a grid built for far less.
Ofgem launched a consultation on Monday (2026-09-21) that would require battery energy storage developers to pay an oversubscribed technologies commitment fee of up to £25,000 per megawatt, equating to £25 million for every gigawatt of project capacity, according to Energy Voice. The regulator said it is minded to approve the plans.4
The scale of the problem makes that fee look like a necessary corrective rather than a revenue measure. Ofgem's consultation documents show 90 GW of battery capacity is currently either operational or sitting in the reformed connections queue — more than three times the 29 GW the government has committed to develop under its clean power 2030 plan. The queue is carrying projects that, by simple arithmetic, cannot all be built.4
The fee structure is tiered. Developers would initially face a charge of £3,000 per MW, rising to £25,000 per MW if the queue remains oversized. At the top rate, a 1 GW project faces a £25 million upfront liability before a single turbine turns or a single battery cell is installed. For projects already under pressure from rising capital costs and uncertain power price revenues, that is a material hurdle.4
This follows a broader pattern of regulatory action on speculative grid connections. Ofgem proposed a similar commitment fee for data centre projects in late July (2026-07-29), with charges ranging from £237,500 to £712,500 per MW — around 2.5% to 7.5% of average project costs — after contracted demand offers surged from 41 GW in November 2024 to 125 GW by June 2025, Montel reported. The logic is the same: scarce network capacity, too many applicants, too few projects that will actually reach financial close.2,13
The National Energy System Operator has form here. In December 2025, NESO removed 300 GW of projects from the connections queue as it prioritised ready-to-build developments, Energy Voice noted. That purge was large by any measure. But the battery queue has rebuilt itself to 90 GW anyway, suggesting that financial penalties may prove more durable than administrative culls in deterring speculative applications.4
Ofgem's position reflects a straightforward capacity mismatch. The UK grid was not designed to absorb 90 GW of batteries, and the infrastructure investment needed to accommodate even a fraction of that volume takes years to deliver. Last year the regulator approved a £24 billion investment programme to maintain gas distribution networks and expand the power grid, partly to enable more renewables and storage to connect — but that spending takes time to translate into physical headroom.2
The commitment fee is explicitly aimed at speculative projects — developers who secure queue positions with limited intent or ability to build, crowding out projects that are closer to ready. Whether the charge is set at £3,000 or £25,000 per MW depends on how the queue responds after the consultation closes. If oversubscription persists, the escalator kicks in automatically under the proposed design.4
For battery developers with solid balance sheets and firm offtake agreements, the fee may be manageable. For early-stage projects relying on queue positions to attract equity, it converts a bureaucratic process into a financial screen. Some developers will withdraw rather than pay. That is the intended effect.
The consultation also intersects with broader UK energy policy tension. The government's clean power 2030 target requires 29 GW of battery storage — a number the queue has already swamped more than three times over. A queue three times the size of the target does not mean the target is at risk; it means the current system creates no natural mechanism to rank or eliminate weaker applications before they consume network operator resources and block genuine projects from progressing.4
What the market will watch now is where the consultation lands on the fee ceiling and whether Ofgem moves simultaneously to accelerate the assessment process for projects that clear the financial hurdle. A £25 million fee buys a queue position, not a connection. Developers who pay and still face multi-year waits may conclude that the fee solves Ofgem's queue problem without solving theirs. The gap between queue entry and actual grid connection remains the unresolved constraint.4