Minded-to Decision on CMP444: Introducing a cap and floor to wider generation TNUoS charges

Ofgem has today (October 23) announced​​​​​​​ that the modification CMP444 will not be made.

CMP444 was a temporary proposal presented by the National Energy System Operator (NESO) to mitigate the immediate impact of escalating electricity transmission charges while long-term reforms are pursued.

The CMP444 proposal suggests putting a “cap and floor” on part of the TNUoS charge for generators. This was to act as a temporary safety net — giving generators cost stability until longer-term charging reforms are introduced.

Ofgem has now directed that the modification CMP444 will not be made.

Stephen McKellar, Head of Grid and Networks at Scottish Renewables, said: 

"The UK Government rightly recognised this summer that reforming volatile and outdated transmission charging is fundamental to securing a clean energy system. Scottish projects have long been penalised by the current system, which is actively undermining their competitiveness.

"Rejecting CMP444 is a clear misstep with the need to balance long-term reform with short-term certainty. To build on the progress already made across Scotland’s pipeline and supply chain, we must create the best possible conditions for the next Contracts for Difference auction rounds to maintain hard-earned momentum in the Scottish pipeline and supply chain.

"As we await a final decision on CMP432, we need immediate assurance of how Ofgem will work with industry, government and NESO to prevent even greater risk being added to the investment and deployment necessary for our shared objectives."

Ends

Notes to editors 

• Read the announcement by Ofgem. 

Background 

What is CMP432?  

CMP432 is a proposal that aims to change how location-based electricity transmission costs are calculated, making the system fairer, more predictable, and more supportive of renewable growth across Britain.  

• Every electricity generator in Great Britain (like a wind farm or power plant) pays a Transmission Network Use of System (TNUoS) charge to use the national high-voltage grid. 
• Part of this charge depends on where the generator is located — because building and maintaining transmission lines costs more in some areas than others. 
• Specifically, it wants to remove a multiplier called the “Locational Onshore Security Factor” (LOSF) from the formula used to set these charges.  
• Right now, this multiplier (1.76) is applied to all new generation projects, making it seem like more network infrastructure is needed than actually is. This leads to higher costs for energy developers, especially in places like northern Scotland. 

Why is CMP432 important? 

Right now, the way the LOSF is calculated isn’t giving a fair reflection of actual costs in all regions. CMP432 suggests updating the formula so it better matches the true cost of keeping the grid secure in different places. 

• This change would make the TNUoS charges fairer and more consistent, especially for renewable projects in remote or high-cost areas (like northern Scotland).  
• These high costs discourage investment in clean energy, which is crucial for meeting the UK’s Clean Power by 2030 goals.  
• It helps level the playing field between regions. For example, northern Scotland faces charges over £70/kW, while southern England could get negative charges (i.e., payments).   

What is the aim of CMP432? 

• Improve fairness in how location-based transmission charges are set and make transmission charges more accurate by reflecting the actual cost of building and maintaining the network.  
• Reduce cost uncertainty for new generators and investors. 
• Encourage renewable development by making projects in remote areas more financially viable. 
• Support long-term reforms to how transmission costs are shared across the UK.   

What is CMP444? 

CMP444 is a temporary proposal to stop electricity transmission charges from swinging too wildly, giving energy developers some breathing room while bigger, long-term reforms are sorted out. 

 The CMP444 proposal suggests putting a “cap and floor” on part of the TNUoS charge for generators: 

• Cap = the maximum amount they can be charged. 
• Floor = the minimum amount they can be charged. 

This would act as a temporary safety net — giving generators cost stability until longer-term charging reforms are introduced. 

What is the aim of CMP444?  

• Reduce uncertainty for investors and developers.  
• Encourage more generation projects, especially renewables, by limiting cost shocks.  
• Keep the system fair while broader reforms to how we charge for network use are developed.