Ofgem’s RIIO-2 final determination published


Ofgem has published their settlements for the next network price control, known as RIIO-2. For the transmission and gas distribution networks and system operator, RIIO-2 will come into effect next year and run for five years until 2026.

National Grid comments that it will now review in detail the full package contained within the Final Determination to see whether it delivers sufficient investment to maintain resilient and reliable networks, provides the flexibility required to enable the delivery of critical infrastructure to achieve the UK’s net zero ambitions, and provides an appropriate overall financial package.

“We expect Ofgem to publish its statutory consultation on the proposed licence modifications required to implement the Final Determination shortly. The consultation period will be followed by a period for Ofgem to consider responses, at the end of which Ofgem will publish its decision to modify the licences. Relevant parties have 20 working days from the day on which the decision to modify the licences is published to appeal any part of the proposed licence modifications to the Competition and Markets Authority. Given the current expected timeline, we anticipate that we will make any final decision on whether to accept or appeal the licence modifications implementing Ofgem’s Final Determination to the CMA no earlier than late February 2021.

Speaking on behalf of electricity transmission and gas network operators, David Smith, chief executive of Energy Networks Association said, “Delivering the Prime Minister’s Ten Point Plan for a Green Industrial Revolution, keeping energy flowing to homes and businesses, and achieving Net Zero emissions requires sustained investment, innovation and a supportive and forward-looking regulatory regime. We will be studying the detail of Ofgem’s determination over the coming weeks to ensure it stands up to these challenges.”

Rob McDonald, Managing Director of SSEN Transmission, said, “We were greatly encouraged by the broad support for our stakeholder-led business plan throughout Ofgem’s consultative process and cautiously welcome Ofgem’s movement on a number of fronts. However, at this stage in our assessment, we continue to have concerns and will need to reflect further as we review and analyse the full settlement in the round over the coming weeks.

“In doing so, we will work constructively with Ofgem and other stakeholders as we consider our options and remain ready to invest the billions required to build a network for net zero, subject to an acceptable and investible overall price control settlement.”


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