Increased socialisation of connection costs in the distribution electricity network

Closes 24 Apr 2025

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Socialisation Options

    1. Options for the socialisation of connections to the electricity network are shown below. These refer to:
      1. the level of the network at which the customer seeking a connection pays for the cost of reinforcement that their connection triggers, and
      2.  the level at which those costs are paid by all consumers under general network charges.
    2. Within these options there are two types of assets to understand:
      1. Connection Assets: any new wires and equipment needed to connect from the connection point on the existing network to the customer’s meter connection.  Designed and built (generally) by NIE Networks.  They become part of the enlarged network.
      2. Network Reinforcement Assets: any wires and equipment needed to reinforce any part of the existing network, triggered by the customer’s connection request.  Designed and built by NIE Networks.
    3. The Table below set out who pays for the different types of assets in the different levels of socialisation.

 

Table 1.  Description of proposed options.

Option 1

Status quo – remaining with the current connection policy

Homes, businesses and generators seeking connection to the distribution network pay for:

  1. Their own assets to the connection point
  2. Reinforcement at their connection voltage level
  3. Reinforcement at one voltage level up from the connecting level

 

Option 2

Partial socialisation. 

Homes, business and generators seeking connection to the distribution network continue to pay for:

  1. Their own assets to the connection point
  2. A weighted portion of the network reinforcement at their connection voltage level, and one voltage level above

The balance of distribution network reinforcement cost is socialised

Option 3

Full socialisation for homes and businesses, partial socialisation for generators. 

This option is similar to the one currently used in Britain.

Homes and business pay for

  1. Their own assets to the connection point

Any distribution network reinforcement cost is socialised.

Generators– continue to pay for:

  1. Their own assets to the connection point.
  2. A portion of the network reinforcement at their connection voltage level

The balance of distribution network reinforcement cost is socialised.

Option 4

Full socialisation. 

Homes, businesses and generators only pay for their own assets to the connection point. 

Any distribution network reinforcement cost is socialised.

High Cost Cap

Options 2-4 will each include a High Cost Cap.  This will manage the effect on cost to the consumer and deter unreasonable requests.

The proposed High Cost Cap is £1,720 per kVA for demand customers and £200/kVA for generation customers. 

See Annex 4 – High Cost Cap for a discussion of the ‘High Cost Cap’ concept, and relevant questions

Requirements

    1. The factors we considered when assessing the need for socialisation of connection costs and the effect of the options in this paper included:
      1. Fairness to those seeking a connection
      2. Vulnerable customers
      3. Climate Change and Net Zero / the removal of barriers to the take up of low carbon technologies such as heat pumps and electric vehicles
      4. Regional balance, and
      5. Investment