Source · Select Committees · Business and Trade Committee
Recommendation 47
47
Accepted
Paragraph: 203
Require Ofgem to ensure RIIO-ED2 mechanisms enable distribution network investment for low-carbon rollout.
Recommendation
We recommend that when a need for investment in the distribution network becomes clear, Ofgem ensures the uncertainty mechanisms included in the RIIO-ED2 framework are applied efficiently. Should these prove inadequate to respond to a rapid roll-out of low-carbon technologies, Ofgem should take equivalent steps to its ASTI framework to ensure that distribution networks are an enabler not blocker to net zero.
Government response summary AI-generated
Ofgem states that its RIIO-ED2 framework already provides effective uncertainty mechanisms, including a Reopener mechanism, and an ability to accelerate investment for rapid low-carbon technology rollout, thus addressing the recommendation through existing provisions.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
203
Government Response
Accepted
HM Government · verbatim extract
Accepted
107. Ofgem will work to ensure RIIO-ED2 is an agile price control, allowing flexibility in funding to suit network needs as they arise. It has made changes designed to increase the flexibility and speed at which contingent funding through its uncertainty mechanisms can be accessed, so that companies get additional funding above baseline quickly when required. 108. In addition, Ofgem is enabling strategic investment in this price control by allowing for investment ahead of need, taking into account demand forecasts beyond the 2028 date when the price control ends. RIIO-ED2 will also incentivise speeding up the connections process.
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