Consultation on our future business plans

We're developing our next stakeholder-led business plan for RIIO-T2. We've just launched our playback consultation and we'd welcome your feedback.

How we're regulated

We’re regulated by the energy regulator, Ofgem. Here, you can find out about Ofgem’s performance-based framework RIIO, how it applies to us, and how regulation affects our business planning.

 

Working together

Discover how we’re listening to our stakeholders to understand their changing needs and priorities. Find out how we’re involving them in shaping our plans.

Find out more

Business planning

As the energy landscape changes, we’re working closer than ever with our stakeholders to shape business plans that reflect their needs and benefit consumers.

Find out more

How we’re performing

Customer and stakeholder satisfaction, stakeholder engagement, environmental objectives and general performance are all measures of how we’re currently doing.

Find out more


How we're regulated by Ofgem

As the owner of the national gas transmission network in Great Britain, we’re classed as a ‘natural monopoly’.

We’re regulated by the energy regulator, Ofgem which simulates the effects of competition by setting price controls – a ceiling on the amount we can earn from charges to use our network. Regulation also allows us to invest in the transmission networks and run them properly.
 

RIIO

Ofgem’s regulatory framework is known as RIIO (Revenue = Incentives + Innovation + Outputs). 

The RIIO model offers network companies incentives for innovation and securing investment, so they can develop sustainable energy networks at the lowest cost for current and future customers. 
 

RIIO and our business plans

We submit our future business plans to Ofgem. The regulator reviews and assesses the business plans for the regulatory period, known as a ‘price control’ period.
 

RIIO timeline

We are currently in the RIIO-T1 period, which began on 1 April 2013 and runs through 31 March 2021.  You can find out more about the background of this price control on the Ofgem website.

We are now starting to build our plans for the next regulatory period, RIIO-2, which will start on 1 April 2021. You can find out more about the background of this price control on the Ofgem website. We need to submit our RIIO-2 plans to Ofgem in 2019, so we are currently building an engagement programme based on stakeholder priorities.

RIIO incentives

To encourage us to provide additional benefits for consumers, Ofgem uses financial incentives. These can either be penalties or additional revenue (funded by our customers), depending on whether or not we meet Ofgem’s targets.

Ofgem incentivises us to find more efficient ways to work. If we can find cheaper solutions the benefit is shared between consumers and National Grid.
 

RIIO innovation

As part of the RIIO framework, there are two funding mechanisms that encourage innovation across the energy industry. These funding mechanisms aim to help make the energy networks smarter, accelerate the development of a low carbon energy sector, and deliver financial benefits to consumers.

The Network Innovation Allowance (NIA) provides an annual allowance to fund smaller scale projects.

The Network Innovation Competition (NIC) is an annual competition to secure funding for large-scale demonstration projects aimed at building a lower carbon future for the UK.
 

RIIO outputs

Under RIIO the outputs we deliver are clearly articulated and are linked to the calculation of our allowed revenue. These outputs have been determined through an extensive consultation process, which has given stakeholders a greater opportunity to influence the decisions.

The output categories are:
  1. Safety: ensuring the provision of a safe energy network.

  2. Reliability (and availability): promoting networks capable of delivering long-term reliability, minimising the number and duration of interruptions experienced over the price control period, and ensuring adaptation to climate change.
  3. Environmental impact: encouraging companies to play their role in achieving broader environmental objectives–specifically, facilitating the reduction of carbon emissions–as well as minimising their own carbon footprint.
  4. Customer and stakeholder satisfaction: maintaining high levels of customer satisfaction and stakeholder engagement, and improving service levels.
  5. Customer connections: encouraging networks to connect customers quickly and efficiently.
     

Transmission innovation

Improving our business, through both technical and commercial innovation that delivers value for consumers and provides a safe, efficient, and reliable network.

Find out more