Connections Reform, CP2030, TMO4+ and Gate 2 are changing more than grid connection
dates. For distribution-connected generation and battery storage projects, reform may also
change the distribution queue, LIFO stack and expected curtailment risk.
Most of the focus so far has been on whether projects receive Gate 1, Gate 2, Phase 1 or Phase
2 outcomes. However, there is another important issue for developers and investors. If the post-
reform distribution queue is different from the queue used in earlier curtailment assessments,
then expected curtailment may also change.
For projects in constrained areas, this could materially affect project value. A project that
previously looked low curtailment may be pushed into a worse position if it is leapfrogged by
more advanced projects. A project that previously looked high curtailment may improve if
projects ahead receive Gate 1, otherwise fall away before connection, or if it moves forward in
the post-reform queue.
How Connections Reform Can Change the LIFO Stack & Curtailment Risk
Why Does Queue Position Matter For Curtailment?
Curtailment is the reduction of electricity export or import, usually because of network constraints or operational restrictions. For renewable generation and battery storage projects, curtailment can directly affect revenue, valuation and financing.
Curtailment is not only driven by network assets and technical limits. In many distribution areas, it also depends on the order of projects in the LIFO stack. Projects higher in the stack are generally less exposed to curtailment. Projects lower in the stack are generally more exposed.
This means that the same project, at the same Point of Connection, could have a different curtailment outlook if its position in the stack changes.
Curtailment estimates are also highly sensitive to the assumptions used. Blake Clough’s curtailment work has highlighted the impact of background projects, dropout rates, BESS behaviour, DNO assumptions, future network works and transmission constraints on curtailment results. Connections Reform adds another key assumption: whether the queue position used in the curtailment assessment is still correct.
What Did Developers Previously Expect?
Before recent DNO engagement, many developers understood that Connections Reform would not materially change the existing distribution LIFO stack. The main expected change was that Gate 1 projects would be removed from the relevant stack, alongside any other projects that fall away before connection.
Under that approach, reform would mainly improve curtailment for projects that remained in the queue. If projects ahead received Gate 1 or otherwise fell away, the surviving projects would move forward. Projects were not generally expecting to be pushed backwards by wider queue reordering.
That now appears too simple for Phase 2 projects.
What Changed in March 2026?
In March 2026, DNO messaging began to indicate that distribution queue ordering would be more closely aligned with the Connections Reform process.
At UKPN’s DER Forum on 24 March 2026, UKPN indicated that:
- Phase 1 projects would keep their existing relative queue positions.
- Phase 2 projects would be ordered based on the NESO queue outcome.
- The distribution queue would reflect the revised transmission queue position.
- Projects outside the scope of Connections Reform would keep their position relative to
the number of projects. - Projects able to connect would not be artificially held back.
- UKPN expected these principles to be broadly consistent across DNOs.
The key point for curtailment is that the distribution queue may not simply be the old queue with Gate 1 projects removed. For Phase 2 projects, the LIFO stack may be reordered in line with the wider Connections Reform outcome.
This blog is not focused on all the risks and opportunities created by distribution queue reordering, which is perhaps a subject for another post. The focus is narrower: if the LIFO stack changes, expected curtailment can change.
How Can LIFO Stack Movement Affect Projects?
If a project moves forward in the stack, expected curtailment may reduce. This could improve the commercial case, especially where previous estimates assumed the project was behind several other constrained schemes.
If a project moves backwards, expected curtailment may increase. This could weaken the project’s revenue forecast and affect valuation, financing or acquisition pricing.
The impact will depend on the local network and the specific stack, but queue reordering can change curtailment exposure.
This is most relevant where:
- the project is in a constrained distribution area
- several projects share the same upstream constraint
- the previous curtailment estimate used the pre-reform LIFO stack
- projects ahead or behind have different planning statuses
- Gate 1 outcomes or project cancellations remove capacity from the background
- BESS projects in the background were assumed to connect
Which Projects are Likely to Benefit?
Phase 1 Projects
Phase 1 projects should generally benefit from reform, or at least not be made worse by queue reordering. Based on UKPN’s March 2026 update, Phase 1 projects are expected to keep their existing relative queue positions.
They may benefit from Gate 1 projects being removed from the relevant stack, cancelled schemes falling away or other attrition in the background. In rare cases, there may also be some benefit from leapfrogging elsewhere in the stack.
For Phase 1 projects, the main curtailment impact is therefore likely to be positive or neutral.
Phase 2 Projects with Planning Consent
Phase 2 projects with planning consent may also benefit. These projects could move ahead of less advanced projects, including projects with planning submitted, land rights only, or projects that receive Gate 1.
For consented projects that previously sat in the middle or back of a constrained queue, this could reduce expected curtailment. In some cases, projects that previously looked marginal because of curtailment may become more attractive after the stack is updated.
Phase 2 Projects with Planning Submitted
Projects with planning submitted could move either way.
They may improve if they move ahead of land-rights-only projects. They may also improve if projects ahead receive Gate 1 and are removed from the relevant stack, or if projects otherwise fall away before connection. However, they could worsen if planning-consented projects behind them move ahead.
These projects need a project-specific review. The curtailment impact will depend on the local
stack and the status of projects around them.
Indicative Impact of Connections Reform on Curtailment Risk
Which Projects are Most Exposed?
Phase 2 Projects with Land Rights Only
Phase 2 projects with land rights only may face the greatest downside risk. These projects could be overtaken by projects with planning submitted or planning consented.
They may still benefit if projects ahead drop out or receive Gate 1, but they are more exposed to being leapfrogged by better-progressed schemes.
This is especially important for land-rights-only projects near the front of a constrained stack. If the project previously assumed low curtailment because of an early queue position, that
assumption may need to be reviewed.
Front-of-Queue Projects without Planning Consent
The biggest commercial risk may be for projects near the front of the queue that do not have
planning consent.
These projects may have low expected curtailment under the pre-reform stack. If they are leapfrogged by better-progressed projects, they may move into a higher-curtailment position.
This could be a major issue for project economics. A project may still have a connection, but the expected curtailment may no longer support the previous investment case.
Where Could Connections Reform Create Upside?
Connections Reform may also create upside.
Projects in the middle or back of the queue may improve if they have stronger readiness status than projects ahead of them. For example, a consented Phase 2 project that previously sat behind less advanced projects could move forward in the post-reform stack.
Where the relevant constraint is material, this could reduce expected curtailment and improve project value.
This means some projects that previously looked unattractive because of curtailment may need to be reassessed. The post-reform queue could change the commercial view.
What About BESS Dropouts?
BESS dropout is a separate but related issue.
If a large number of BESS projects drop out, this may change the background capacity assumed in curtailment studies. This could affect both import and export curtailment, depending on how the DNO or consultant modelled the background.
However, this blog is focused on queue reordering rather than BESS attrition. BESS dropout changes which projects remain in the background. Queue reordering changes the priority of the projects that remain.
Both can affect curtailment and should be reviewed separately.
Could Point of Connection Changes Also Affect Curtailment?
Some projects may also explore whether their Point of Connection can be improved after reform, subject to the DNO agreeing that the change is allowable.
This is a separate topic, but it can also affect curtailment. A different Point of Connection may change the relevant constraints, sensitivity factors, LIFO stack and reinforcement background.
Where a Point of Connection change is possible, the curtailment impact should be checked before assuming it improves the project.
What Should Developers and Investors Do Now?
Developers and investors should not rely on pre-reform curtailment estimates without checking the queue assumptions behind them.
The key actions are:
- Check whether the pre-reform LIFO stack is still valid.
- Confirm whether the project is Phase 1 or Phase 2.
- For Phase 2 projects, confirm whether the project has planning consent, planning
submitted or land rights only. - Rebuild the relevant local distribution queue using Gate 1, Gate 2 and known attrition
information. - Reassess curtailment using the post-reform stack.
- Review whether previous DNO estimates relied on outdated background assumptions.
- Consider whether BESS dropout or Point of Connection changes could affect the result.
- For acquisitions and financing, treat post-reform curtailment as a core due diligence
item.
Post-Reform Curtailment Review Checklist
Conclusion
Connections Reform is changing more than connection dates. It may also change the distribution queue, LIFO stack and expected curtailment for distribution-connected projects.
Some projects may benefit from Gate 1 dropouts, attrition or improved queue position. Others, especially front-of-queue Phase 2 projects without strong planning status, may face higher curtailment than previously expected.
If a curtailment assessment was based on a pre-reform LIFO stack, it should be reviewed. Developers and investors need to understand where their project sits in the post-reform queue and what that means for revenue, valuation and bankability.
Blake Clough Consulting supports developers, investors and funders with detailed curtailment assessments for distribution-connected generation and battery storage projects.