National Grid is funded by a price control mechanism which is agreed with and set by Ofgem. 

Historically the Price Control Review was over a five year period and based on a retail price index model with an element of incentivised efficiency savings; this funding model was known as RPI-X.

This has served the customer well and has delivered reduced network costs for customers by up to 50 per cent since 1990.

The UK energy sector is now facing a number of challenges in providing safe, reliable and secure energy which will also be sustainable in a decarbonised future. 

Project Discovery identified that £200 billion of investment will be required in the next ten years within the energy industry in order to secure sustainable energy supplies and keep costs as low as possible for consumers.  £32 billion of this falls within Ofgem’s remit and this is where RIIO will come in.

Ofgem has introduced a new regulatory framework to replace RPI-X known as RIIO:
Revenue= Incentives + Innovation + Outputs

The RIIO model offers network companies real incentives for securing investment and driving innovation.  This is to ensure the delivery of sustainable energy networks for current and future customers at the lowest cost.

The period of the next Gas Distribution and Transmission Price Control Review, on which we are now consulting, is from 2013 to 2021.

We want to know and understand your priorities to ensure we continue to deliver energy safely, reliably and efficiently whist at the same time delivering a service we are proud of for every customer, every time.

• More about the Gas Distribution consultation for RIIO-GD1
• Please refer to our dedicated Talking Networks Transmission site for information about the Transmission consultation for RIIO-T1

If you have any queries that relate to both our transmission and distribution businesses, or you’re not sure which, please email us at talkingnetworks@uk.ngrid.com.