Regulatory reforms should boost sustained, predictable demand for electrical network components from 2028 to 2033

London, 3 December: BEAMA – the trade association representing the UK’s electrical networks supply chain industry – has welcomed energy regulator Ofgem’s proposed approach to the next electricity distribution network price control.

Publishing its response to the regulator’s RIIO-ED3 methodology consultation today, BEAMA has praised Ofgem’s focus upon incentivising proactive and sustained network investment, while noting that there is still more to do on providing regulatory clarity to manufacturers.

 

With the Climate  Change Committee forecasting that UK electrical demand will more than double by 2050, the regulator has proposed a range of reforms to the next price control period to provide greater support to the supply chain. These include a focus on improving visibility of demand by requiring network operators to publish delivery strategies and forecasts of volumes, as well as taking measures to smooth demand across price control periods. Together, this package of reforms is intended to provide greater predictability and certainty for the electricity network supply chain.

BEAMA supports this strategic approach, which aims to help end the “boom-and-bust" that has defined previous price control periods. Previous price controls led to low investment in the first years of the five year period, leaving suppliers unable to predict demand or facing idle manufacturing capacity. Ofgem’s RIIO-ED3 proposals aim to even out investment across the five-year price control. Smoothing out investment will ensure predictable demand for network components produced by BEAMA members: from transformers and switchgear to advanced sensors and network flexibility monitoring systems at the heart of a safe, reliable, and efficient energy system.

With the UK in a global race for electrical product manufacturing capacity – by boosting consistency and reducing volatility, the supply chain can make targeted investments in UK manufacturing, supporting high-skilled British jobs and helping to drive down the cost of network investment.

While BEAMA welcomed Ofgem’s overall strategic direction for RIIO-ED3, the approach could be strengthened with more specific tactical incentives for UK electrical distribution network operators to stick to the spending commitments outlined in their business plans. BEAMA will support the regulator’s work to design these incentives.

In addition, Ofgem should strengthen its commitment to reducing greenhouse gas emissions from the UK electricity network by setting an explicit expectation that distribution network operators should purchase switchgear that does not contain sulphur hexafluoride (SF6) – a particularly potent greenhouse gas – wherever possible in RIIO-ED3.

The next electricity distribution network price control – known as RIIO-ED3 – begins on Saturday 1 April 2028. Today’s methodology consultation will shape Ofgem’s management of the price control, shaping network investment during the crucial 2028-2033 period.

BEAMA is collaborating closely with the UK’s electricity networks, co-developing a sector Growth Plan with the aim of maximising the benefits that the networks sector can deliver for the whole of the UK economy. BEAMA, in partnership with the Energy Networks Association (ENA) will be publishing the initial findings on Wednesday 10 December at a roundtable attended by DESNZ Minister Michael Shanks MP, with the full report expected in summer 2026.

Commenting on Ofgem’s proposed methodology reforms, BEAMA Chief Executive Yselkla Farmer observed:

“Our members want to expand their businesses to meet the challenge of a growing electricity network, but they need greater visibility of demand and confidence that plans will turn into firm orders. The proposals from Ofgem are a welcome step forward in recognising the challenges that manufacturers face – but the proof of the pudding will be in whether Ofgem implements these proposals, along with strong delivery incentives for the network operators to stick to the plans they set out. Manufacturers also need regulatory clarity on key issues like the phase out of SF6 – this is delaying investment in new capacity.”

“The prize here for the UK economy is massive – a big step up in investment in UK manufacturing capacity and skilled jobs in local communities all over the country.”