Our response to coronavirus

Find out how we're working to keep the electricity and gas flowing reliably throughout the outbreak.

How we're regulated

We’re regulated by the energy regulator, Ofgem. Here, you can find out what this means and how it affects our business planning.

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Ofgem's role

Ofgem governs our operation through our transmission licence. More information about how we comply with our licence can be found here.

Ofgem also simulates the effects of competition by setting price controls – a ceiling on the amount we can earn from charges to use our network.

Find out more about Ofgem
How we earn our revenue

Ofgem’s regulatory framework allows National Grid Electricity Transmision to earn revenue from three main sources:

Incentives + Innovation + Outputs

This framework is known as RIIO.

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.  

How we work with Ofgem

We submit our business plans to Ofgem, who reviews and assesses these for the regulatory period, which is known as a ‘price control’ period.

Timelines

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 have built our plans for the next regulatory period, RIIO-2, which will start on 1 April 2021 and run until 2026. 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

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. 

Innovation

As part of the RIIO framework, there are funding mechanisims 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.

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): ensuring we are 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 us to play our role in achieving broader environmental objectives – specifically, facilitating the reduction of carbon emissions – as well as minimising our 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 us to connect customers quickly and efficiently.

Light trails

How we're performing

Find out about how we’re performing under our current business plans, including reliability, the environment, customer satisfaction, customer connections and, most importantly, safety.

About our performance

What's coming next

Our business plan for the RIIO-2 period runs April 2021 – March 2026.

Our planning involved:

  • setting the standards of service we provide
  • the investments we make 
  • how we’ll innovate for the future
  • the performance outcomes upon which we’re measured.  

We have now submitted our business plan to Ofgem, but that's not the end of the process.  We are encouraging everyone who has an interest in what we do to continue giving us feedback. 

Find out more about RIIO-2

People abstract

Compliance statements

Here you'll find documents that we must produce to comply with our electricity licence requirements to separate parts of our business.

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Working together

We want to gain insight from a wide range of people and organisations who have an interest in the work we do, so we can shape plans that reflect what is important to them.