Managing the Electricity Distribution Connection Queue in Great Britain: Lessons from Auction Theory and a Potential Position Trading System

The connection queue in Great Britain (GB) is recognized as a major challenge for transmission and distribution networks and for the energy transition. The queue reached 726 GW in July 2024 for generation and storage, but it is also significant on the demand side. The drivers of this problem have been identified by the government, the regulator and the industry. One of the drivers is the inability of the First Come First Served (FCFS) rule – the de facto system of allocation – to account for the feasibility, progress and value of the different projects applying for connection. This paper explores this latter aspect, by taking inspiration from the literature on auction theory, mechanism design and queuing theory. The paper discusses potential changes to the initial (primary) allocation of connection rights in light of concepts such as the beauty contest and the Knapsack problem, and to queue management by potentially introducing a secondary trading of connection rights to increase efficiency. The paper also discusses the risks and potential biases of such changes, including asymmetric information and strategic behaviour.