What a queue position is actually worth

Three markets, three sets of rules, and one number that turns out to predict most of the value.

Grid queue positions are traded, priced and argued over as though they were a homogeneous asset. They are not. We hold or have held positions in nine markets, and the same nominal offer — say 100 MW, energisation in 2031 — has ranged from the most valuable thing in a project to something we have paid to walk away from.

What we measured

We went back through twenty-two positions we have either developed, sold or abandoned since 2018 and asked which attributes of the offer predicted the outcome. Four candidates went in: the megawatt figure, the energisation date, the queue rank, and the connection voltage. None of them predicted much on its own.

The variable that did was less obvious and harder to get: how many positions ahead of ours were held by a party with no site.

• Where more than half of the positions ahead had no land agreement, our energisation date moved earlier by an average of 19 months against the offer.
• Where fewer than a fifth did, it moved later by an average of 7 months.
• The megawatt figure and the queue rank explained almost nothing once this variable was in the model.

This is not a subtle finding once you see it. A queue is a line of intentions, and the date on your offer assumes everyone ahead of you builds. Most of them do not. The offer date is therefore a worst case dressed as a forecast, and how much better than worst case you will do depends entirely on the composition of the line in front.

Why it is hard to use

In one of our three main markets the register publishes enough to compute this directly. In the second it publishes capacity and rank but not the holder, and we have to infer from planning applications, which is slow and roughly a third wrong. In the third the register is not public at all, and the only route is the developer community itself — which is to say, it is a relationship, not a dataset.

The number that predicts the value of a queue position is public in one of our markets, inferable in the second, and a matter of who returns your call in the third.

We have stopped pretending this is symmetrical. In the market where the data is public, we will pay for a position on analysis. In the market where it is not, we will not buy a position from someone we do not know, at any price, because the only thing being sold is the seller's own view of the line.

The other three things we now check

• What happens to the position if the project changes. In two markets a change of technology or a reduction in capacity re-queues you. In one it does not. That single rule is worth more than a year of energisation date.
• Whether the securities are refundable and on what trigger. We have posted securities that were returned in full on withdrawal and securities that were not. The second kind is a real cost of optionality and belongs in the price.
• Whether the connection is firm. A non-firm connection two years earlier is not obviously better than a firm one two years later, and the answer depends on the curtailment shape at that node — which is a different article.

What a position is worth to us

We do not have a formula and we distrust the ones we have been shown. What we have is a range, built from the twenty-two, and a rule: we will pay for a queue position where we can evidence the composition of the line ahead, and we will treat the offer date as a ceiling rather than an expectation everywhere else.

Two of the twenty-two we abandoned after paying for them. In both cases the line ahead was longer in substance than it looked on paper, and in both cases we could have known that before we paid. That is the whole reason this piece exists.