NESO’s long-anticipated Gate 2 decisions landed last week, marking a significant milestone in the UK’s connection reform journey. The past year has been defined by an ambition to clear the queue of stalled “zombie projects,” prioritise ready-to-build schemes, and accelerate the renewable capacity Britain urgently needs.
But while the decisions offer some clarity on the shape of the future queue, they also expose structural challenges that the industry will need to confront quickly.
The initial message from Gate 2 is mixed. Capacity has been reallocated, planning-consented, and pre-2027 projects have largely been protected, and the worst speculative applications have been filtered out. However, several decisions have caught the industry off guard and raised important questions about whether the reforms, as currently implemented, will truly unlock accelerated deployment.
We sat down with our Head of Grid Connections, Paul Munday, to discuss the results, as well as the initial reaction from the rest of the industry.
Distribution projects left out in the cold
Perhaps the most contentious outcome is the lack of advancement for distribution-connected projects. The expectation going into Gate 2 was that shovel-ready distribution projects would be accelerated into Phase 1, where capacity allowed. It is certainly clear that far too few Distribution connection projects will have their connection date brought forward
The implication is stark. ’Unused’ capacity in the Phase 1 pot appears to have been allocated almost entirely to transmission-connected schemes, not distribution. This was neither widely communicated nor anticipated. The general perception then, following these results, is that TOs (Transmission Owners) and DNOs simply cannot build the capacity needed to accommodate these distribution projects, or at least not within the timeframe needed to advance them.
Solar Energy UK held a debriefing session earlier in the week, attended by dozens of representatives from renewables companies across the country. Many asked the same question: why frame “advancement” as a meaningful pathway for distribution when network-level constraints meant it was effectively impossible?
On top of all this is also a deeper structural concern. Many commenters have pointed to an apparent “undersupply” of around 7 GW of BESS and PV, given the amount of projects that are deemed ready for a connection compared to the projected Clean Power 2030 targets.
However, if 7 GW of expected Phase 1 distribution capacity did not materialise, and if transmission constraints prevented any upward movement, was this capacity absorbed permanently by transmission projects?
NESO and DNOs owe the market clarity, because this result of the reform has implications for regional grid development and investment planning for years to come.
Battery storage: protection that may test the market
There were both winners and losers for battery storage developments. More BESS projects were protected than even NESO’s own modelling suggested was necessary. The protected BESS total now sits roughly 62 GW above NESO’s stated requirement defined by the Clean Power Action Plan. The protection methodology effectively prioritised planning status over system need, resulting in a near-term overshoot of committed storage capacity.
This creates a new commercial reality. Connection protection is no longer the end goal; energisation and revenue capture now define the race. With saturation risk rising, the BESS projects granted Gate 2 positions need to move rapidly into construction and commissioning before their business cases are eroded by tightening margins.
The finish line has shifted from obtaining a connection offer to being first across the energisation threshold.
Questions remain
At the recent Solar Energy UK meeting, members’ confidence in the reform process was cautious at best. Developers reported inconsistent information, shifting deadlines, and varying interpretations of methodology.
There is still ambiguity around how projects will be treated if they reject offers, what attrition management will look like, and how reallocated capacity will cascade into the queue.
Several fundamental questions remain unanswered:
- Can advancement actually occur, or is it structurally unattainable under current network constraints?
- How will NESO manage attrition in Phase 1 to ensure valuable projects are not lost?
- Will milestone extensions be honoured, given that Gate 2 itself caused a one-year delay in receiving offers?
- How will DNOs and TOs coordinate with NESO to create a transparent picture of regional availability and curtailment?
- With the next Gate 2 window not opening before April 2026, is the market heading into a two-year holding pattern?
Underlying all of this is the simple question: what has Gate 2 actually secured?
There remains a real risk that many Phase 1 projects will still fail due to planning bottlenecks, supply chain limitations, or capital constraints. To maintain momentum, network operators must now proactively manage attrition and remove barriers that could stall progress at this critical moment.
The race is on: delivery will define winners
With connection outcomes now known, the market enters an intense period of commercial consolidation. Large players may seek to acquire projects and portfolios from smaller developers who have secured positions but may not have the balance sheet, EPC capacity, or supply chain muscle to reach energisation quickly. The risk of overextension is real, and the timeline to 2026/27 puts further stress on a supply chain that is already stretched.
If Gate 2 clarified anything, it is this: securing a protected connection position is only the start. The projects that will succeed are those that can build, commission, and energise the fastest. With supply chain strain rising and completion timelines tightening, delivery capability becomes the industry’s most valuable commodity.
This is where the right delivery partners become essential. Ethical Power’s combination of asset management expertise and vertical integration positions us to help developers and asset owners move rapidly from “protected” to “performing.”
With of our own projects progressing through Gate 2 and 15 years of experience in delivering both complex solar and BESS infrastructure, we understand precisely what it will take to hit energisation deadlines and preserve commercial value.
The UK’s renewables pipeline has just been reshaped. The next chapter won’t be defined by who secured a Gate 2 outcome, but by who can build and connect on time. The clock is now ticking for the entire sector. For those ready to move, this is the moment to lock in partners with the capability and capacity to deliver.