From Backlog to Breakthrough Managing Connection Queues in Distribution Networks

Executive summary and key messages

Summary

The rapid electrification of industries, transport and heating, alongside the integration of renewable energy sources, has led to significant connection queue backlogs in electricity distribution networks across Europe. These delays hinder the energy transition, slow down economic growth and create inefficiencies in grid utilisation. The “first come, first served” approach can be better suited in some Member States than others. This calls for the national regulatory authorities (NRAs) or national governments to provide a clear framework and set of prioritisation criteria to allow system operators to move away from the ’first-come, first-serve’ approach as the default way of managing the connection queue, where system operators have indicated that the ‘first come, first served’ principle is inefficient for their operation.

Key factors driving connection queues include:

• Grid capacity constraints, particularly in areas with aging infrastructure or high renewable penetration.
• Over-reservation of capacity, where speculative projects hold unused grid capacity, blocking other applicants.
• Lengthy permit-granting processes, both internal (DSO approvals) and external (regulatory and environmental permits).
• Regulatory limitations on DSOs’ ability to refuse connections, impacting grid efficiency.

To address these challenges, several European countries are implementing reforms such as maturity assessments, priority-based allocations and digitalisation of connection processes. However, further regulatory guidance may be required at the EU level to streamline and accelerate connections while maintaining fair access and ensuring grid stability.

Key Messages

1. DSOs Are Committed to Fair and Timely Grid Connections
2. DSOs take seriously their obligation to connect all customers in a non-discriminatory manner within a reasonable timeframe.
3. They activate all available levers, including digitalisation and automation, to improve efficiency.
4. Their efforts must be supported by appropriate national legal and regulatory frameworks, as connection requests will continue to increase substantially due to a significant increase in renewable integration and electrification of consumption to meet EU targets.
5. Grid Capacity Constraints Are a Growing Challenge
6. Rising connection demands and grid capacity scarcity create difficult trade-offs in allocating limited resources.
7. Flexibility in network design can be used to temporarily increase the connection capacity, but as a complement to traditional investment which represents the ultimate solution to the network capacity constraints.
8. Anticipatory investments in network buildout can help prevent some capacity constraints, by building the network based on reasonably certain projections of generation and load projects which can be validated against DSO’s distribution network development plans (DNDPs)
9. Moving away from the “first come, first served” principle could be necessary in some Member States, but implementation may differ across Member States based on national priorities.
10. If system operators have indicated that the first come, first served principle is inefficient for their operation, then national authorities or governments should provide a clear framework of criteria for prioritisation.

Speculative Requests Must Be Disincentivised Without Hindering Electrification & Renewables

• Free or low-barrier connection studies contribute to queue congestion; introducing fees for speculative connection requests could reduce unnecessary paperwork and capacity reservations.
• Proportionate penalties for overusing contracted capacity could prevent grid congestion while ensuring fair access to available capacity.
• Planning permission should be in place before connection approvals, or at minimum, permitted together to ensure feasibility.

Pricing Signals Should Reflect Economic Scarcity Without Discouraging Decarbonisation

• Grid capacity is a scarce economic good and should be priced accordingly to ensure efficient use.
• Symmetric fees for feed-in and demand connections make sense in a decentralised system.
• When TSOs provide Bulk Supply Points, a significant percentage should be reserved for DSO growth rather than being allocated entirely to large industrial customers. The exact allocation should be determined based on local DSO needs rather than set in a top-down manner.

Regulatory Reforms Should Streamline and Accelerate Permitting

• Permitting delays affect all voltage levels and contribute to connection queue congestion.
• A more coordinated permitting framework is needed, rather than fragmented regional or municipal processes.
• Faster permitting for network system owners will be critical for ensuring timely grid expansion and reinforcement.

Flexible Connection Agreements (FCAs) Can Help Optimise Grid Use

• Interruptible connection agreements should be available not just in constrained areas but widely for large consumers and producers to avoid discrimination.
• National regulators (NRAs) should develop FCA frameworks while ensuring they do not hinder long-term network investments.

Flexible Connection Agreements (FCAs) Can Help Optimise Grid Use

• Variations of the first-come, first-served approach works for some markets but needs adaptations for others.
• Countries must tailor their connection frameworks to balance fairness, efficiency and energy transition goals.
• A balance must be struck for large-scale load contracts between replicability and customisation, considering the heterogeneity of DSO responsibilities and conditions.