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ED2

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Northern Powergrid is alone among the DNOs in appealing against its ED2 final determination. Maxine Frerk, former senior partner at the regulator, explores the technicalities behind the challenge, the company's chances of winning and what the result could mean for other networks.
Analysis
ED2 uncertainty mechanisms leave ‘a lot to sort out’
The abundance of uncertainty mechanisms in the RIIO ED2 price controls will leave a lot of work to do during the period for both Ofgem and distribution network operators, industry experts have told Utility Week.
News
‘No nasty surprises’ in ED2 final determinations
Electricity distribution networks are unlikely to follow in the footsteps of the other energy networks in appealing their RIIO2 final determinations to the Competition and Markets Authority, an industry expert has told Utility Week. While qualifying that you should “never say never,” Investec senior analyst Martin Young said his gut feeling is distribution network operators will want to “move on” given there were “no nasty surprises” in the final determinations.
News
DNOs get green light for £22.2bn of investment over ED2
Ofgem has given upfront approval to £22.2 billion of investment by electricity distribution networks over the five-year RIIO ED2 price controls beginning in April next year. The regulator has reduced its assessment of the net benefits to consumers from £1.3 billion to £428 million as a result of changing market conditions, specifically the recent rise in interest rates, which affected both the cost of capital and totex allowances. Utility Week looks at how Ofgem has shifted its thinking and the impact on each company.
News
Delivery of RIIO-ED2 in the race to net zero
The next price control period for electricity distribution networks will see increased ambition on accelerating decarbonisation while ensuring security of supply and being mindful of affordability. This will require complex decision making and the ability to identify the highest-value decisions and create an optimal investment strategy while respecting all goals and restraints. This Utility Week Explains, in association with Copperleaf, looks at what role decision analytics can play in helping companies respond to changing circumstances and plan for the unforeseen.
Downloads
The bridge to RIIO3
Ofgem has belated kicked off the process of examining what the next round of price controls could look like. Maxine Frerk asks whether the regulator has left it too late to entertain it more radical suggestions for overhauling the price control process. She also points to some worrying omissions when it comes to thinking about the future of gas networks.
Opinion
Sensing underground assets: LV network monitoring in ED2
With ED2 fast approaching, a new report from Utility Week and Kelvatek, sheds light on lessons learned from the latter’s partnership with Electricity North West, low voltage (LV) monitoring strategies, and the overarching challenges ahead of the new price control period.
Downloads
Ofgem to unlock funding for DNOs to install EV chargepoints
Ofgem has proposed to create a new funding mechanism to enable distribution network operators (DNOs) to act as a Provider of Last Resort for electric vehicle chargepoints. In its draft determinations for the RIIO ED2 price controls, the regulator noted that DNOs’ licence conditions already permit them to install and operate electric vehicle chargepoints in instances where it is satisfied that no one else can do so “at a reasonable cost and in a timely manner."
News
ED2 draft determinations ‘tougher than expected’
Ofgem’s draft determinations for the RIIO ED2 price controls were “slightly tougher than expected” due to higher levels of assumed productivity gains and reduced scope for operational outperformance, according to ratings agency Moody’s. In the case of the latter, Moody’s said the potential financial rewards from output delivery incentives, which would be significantly reduced when compared to the current price controls, would be harder to achieve due to tighter targets, and would also be outweighed by potential penalties by a ratio of more than 2:1.
News
Plans for DSO regulation fleshed out
Ofgem has fleshed outs its plans for the regulation of distribution system operation (DSO) functions during the RIIO ED2 period. In its draft determinations published earlier this week, the regulator confirmed its intention to introduce a new DSO incentive for electricity distribution networks for the price controls beginning in April 2023.
News
Ofgem proposes volume drivers for load-related expenditure by DNOs
Ofgem has proposed to introduce two new automatic volume drivers to manage uncertainty over required levels of load-related expenditure by electricity distribution networks as part of its draft determinations for the RIIO ED2 price controls. The regulator said the uncertainty mechanisms are necessary to prevent asset stranding, while also avoiding the risk of underinvestment in new network capacity that could stifle the uptake of low-carbon technologies.
News
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