Progression Commitment Fee (PCF)

The Progression Commitment Fee (PCF) is a new measure designed to strengthen the delivery of connections reform by encouraging uncommitted projects to leave the pipeline, ensuring only committed and viable projects progress. Ofgem approved the PCF (CMP448) on 8 December 2025, with implementation into the Connections Use of System Code (CUSC) from 2 January 2026. (CMP448 webpage and Ofgem decision).

The PCF is firstly a measurement tool of connections pipeline health and secondly a financial incentive structure for those with a connections agreement with NESO.

It is not a security that every organisation has to place automatically, it is dormant until an activation threshold is reached and following this, Ofgem decide it necessary to active it.

If activated, the PCF will apply to generation projects in the connections pipeline that:

• hold Transmission Entry Capacity (TEC), developer capacity or interconnector capacity
• have accepted a Gate 2 contract
• have not yet passed Queue Management Milestone 1 (M1)
• have more than six months remaining before their M1 date at the point of PCF activation or offer acceptance

Terminations at M1 will be tracked. If cumulative terminations exceed 6.5 GW before 31 December 2030, (and again by 2035 and for five year period thereafter)Ofgem and/or NESO will decide whether to activate the PCF. If activated:

• generation developers yet to reach M1 must post a security
• the security starts at £2.5k/MW and increases every six months up to £10k/MW
• it remains in place until  the project achieves M1
• if a project terminates or reduces MW capacity before achieving M1, the applicable PCF becomes payable
• securities are returned once M1 is successfully met

• 2 January 2026: PCF implemented into the Connection and Use of System Code (CUSC); NESO begins collecting termination data 
• 3 August 2026: first publication of the activation metric outlining if the threshold has been met or not 
• Every 6 months: Activation metric updated every six months until December 2030 or until the threshold is met 
• End of 2030: Activation threshold resets at the end of 2030 if PCF is not triggered and a new five year period begins