Ofgem has issued their Final Determinations for the RIIO-ED2 price control period, setting out the investments electricity distribution companies can make from 2023 to 2028.
David Smith, Chief Executive of Energy Networks Association (ENA), which represents the UK’s energy network operators said:
"The importance of the next price control for distribution networks cannot be overstated. It sets out how the companies will increase investments year on year to unlock decarbonisation, deliver growth and create longer-term customer benefits, all whilst keeping our part of the energy bills low.
“The timing of this Price Control period is crucial as record numbers of electric vehicles and more renewables and heat pumps are brought online. We must recognise the scale of this transformation and the leading role networks will play in enabling decarbonisation.
“Today's announcement must enable the networks to deliver the government’s ambitions to give customers access to affordable, sustainable and secure power whilst also addressing longer-term challenges."
Notes to editor
- A total of £22.5bn of investment will be delivered by network companies over the five years of RIIO-ED2, and a total of £29.5bn is forecast to be invested by the end of the eight-year period of RIIO-ED1 which ends in 2023.
- RIIO-ED1 represented an average of £3.68bn of investment per year, with RIIO-ED2 representing an average of £4.5bn investment per year.
- Ofgem has put in place mechanisms for this investment to scale with the ambition for Net Zero.
- The bill impact of distribution network operators is marginally reducing from RIIO-ED1 with an average £4.26 per annum reduction in customers’ bills.
- Network charges on energy bills have remained broadly flat since 2015, excluding costs relating to the supply market failure, and are set to fall in absolute terms as we enter the new investment cycle.
- Network companies have improved performance significantly
- Customer satisfaction scores for electricity and gas distribution networks are averaging 9.2/10.
- Over a quarter (24.4GW) of all electricity produced is now connected to the local electricity networks with renewable electricity now representing over 43% of total generation
About Energy Networks Association
Energy Networks Association (ENA) is the industry body representing the electricity wires, gas pipes and energy system in the UK and Ireland.
ENA helps its members meet the challenge of delivering electricity and gas to communities across the UK and Ireland safely, sustainably and reliably.
Its members include every major electricity and gas network operator in the UK and Ireland, independent operators, National Grid ESO which operates the electricity system in Great Britain and National Gas which operates the gas system in Great Britain. Its affiliate membership also includes companies with an interest in energy, including Heathrow Airport and Network Rail.
What are energy network operators?
Energy network operators manage and maintain the wires, pipes and other infrastructure which delivers electricity and gas to your home, business and community. They are private companies which are regulated by Ofgem and employ around 40,000 people in Great Britain.