We are a separate company

On 1 April Electricity Transmission became a legally separate company within the National Grid Group. Find out more about what this change means.

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.  

How we're regulated by Ofgem

As the owner of the high voltage electricity transmission network in England and Wales, 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're currently in the RIIO-T1 period, which began on 1 April  2013 and runs through to 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 plans for the next regulatory period, RIIO-2, which will start on 1 April 2021. These plans are shaped by our stakeholders, which range from customers to manufacturers and Government. 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. 

  1. 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. 

  1. 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. 

  1. Customer and stakeholder satisfaction: maintaining high levels of customer satisfaction and stakeholder engagement, and improving service levels. 

  1. Customer connections: encouraging networks to connect customers quickly and efficiently.

Working together

Discover how we’re involving our stakeholders in the way we’re shaping our business plan for the RIIO-2 price control period. Find out how to share your views.

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

Have your say on our future business plans

We want to hear the views of people and organisations who have an interest in our future business plans.

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

Innovation

Our commitment to innovation allows us to run, build, and maintain our network more efficiently and effectively, delivering benefits to our stakeholders who include end-consumers. 

Embedding innovation and new technology into our business delivers continuous improvements in the quality and cost of our services. 

Find out more