Ofgem has launched its consultation on the RIIO-ED3 framework, setting out a notable shift in how electricity distribution networks will be planned and funded from April 2028.

 

At the core of the proposals is a change in mindset. Where the current ED2 price control emphasised caution, focusing on flexibility and avoiding overinvestment, Ofgem is now more concerned about the risks of under-building the network. With electricity demand expected to surge in the 2030s as electrification accelerates, the regulator is proposing a more proactive and prescriptive approach to network reinforcement. 

This shift is driven by several key factors. Demand for electricity is forecast to rise significantly, potentially doubling at peak. At the same time, the introduction of regional energy planning through the National Energy System Operator is expected to provide clearer direction on where and when investment is needed. Government ambitions, including Clean Power 2030, further reinforce the need to build network capacity ahead of demand. 

Ofgem also recognises ongoing constraints in the supply chain and workforce, which have contributed to slower-than-expected spending under ED2. Alongside this, new duties around Net Zero and sustainable economic growth are shaping a more forward-leaning regulatory approach. 

While the direction of travel is clear, there is also a growing call for action now, not just in the next price control period. Ensuring that momentum builds during ED2 will be critical to avoiding delays later and giving the supply chain confidence to scale. 

Engagement across the sector is already underway, with working groups, workshops, and industry collaboration helping to shape the final framework. The decisions made through ED3 will play a defining role in how quickly and effectively the UK can build the electricity network needed for a low-carbon future.