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DNOs commit to billions in investment in final RIIO-ED2 business plans

All the networks are expecting an increase in EV ownership to drive up demand and require capacity increases during the RIIO-ED2 period. Image: Northern Powergrid.

All the networks are expecting an increase in EV ownership to drive up demand and require capacity increases during the RIIO-ED2 period. Image: Northern Powergrid.

Distribution network operators (DNO) around Britain have submitted their final RIIO-ED2 business plans to Ofgem, announcing billions of pounds in funding to transform electricity distribution networks for net zero.

Covering the five year period between 2023-28, each DNO has identified investment and targets for increasing capacity to enable greater connection of energy technologies like electric vehicles and heat pumps, whilst ensuring the networks stay resilient.

These final plans are the results of years of consultation with the public and other stakeholders, and cement many of the pledges announced in draft RIIO-ED2 plans published in July.

Electricity North West

Electricity North West has unveiled plans to invest £1.8 billion over the five-year RIIO-ED2 period. This will help to connect more than 630,000 electric cars, as the 2.4 million homes and businesses within its region look to greener transport and heating options.

“I want to be very clear. Everything that we deliver in this plan is inextricably linked to the challenge of reaching Net Zero,” said the company’s chief executive Peter Emery.

“The climate emergency is the greatest challenge of our age and networks are uniquely positioned to enable the transition as we move away from fossil fuels to low carbon electricity to power our homes, businesses, transport and heating.”

The DNO is aiming to deliver upgrades at the lowest possible cost to consumers, having reduced its part of energy bills by at least 5.5% on average a year.

Electricity North West plans to roll out innovations such as its Smart Street and CLASS programmes, which allow it reduce demand for power at key times.

Read the company’s full RIIO-ED2 plan here.

Western Power Distribution

Western Power Distribution is aiming to expand its network to enable an additional 1.5 million EVs and 600,000 heat pumps by 2028. As part of this, it is aiming to offer same day connection to thousands of customers in its region.

It has set aside £540,000 per year of its total £6.7 billion investment through the period to fund the installation of solar panels on school roofs. Additionally, it is looking to enable more than 150 community energy schemes to connect to the network.

By focusing on delivering operational efficiencies and utilising innovation and digitalisation to enhance services, Western Power Distribution is expecting to keep customer bills in line with present day levels, despite the investment increases.

It is planning to deliver £723 million of embedded efficiency savings, as well as a further £95 million in ongoing efficiencies throughout the five-year period.

“Since 2015 we have already begun to transform our network, ready to connect more than 31GW of distributed generation on a network conventionally designed for 14GW of demand. But that is just the star,” said Phil Swift, Western Power Distribution’s chief executive.

“Our Business Plan presents an opportunity to deliver unprecedented digitalisation and innovation to deliver an electricity network to meet the rapidly changing needs of our customers in a net zero carbon future.”

He added that the company is “leading by example”, having committed to becoming a net zero business by 2028.

Western Power Distribution’s RIIO-ED2 business plan includes 42 core commitments across four overarching outcomes; sustainability, 'connectability', vulnerability and affordability.

The company’s full business plan can be read here.

Scottish and Southern Electricity Networks

Scottish and Southern Electricity Networks Distribution is looking to support 3.7GW of new network capacity by 2028, earmarking over £1 billion to help accelerate net zero communities.

It has outlined £3.99 billion of investment over the five year RIIO-ED2 period in its business plan, with £360 million allocated to digitalising systems and improving customer service and £2.2 billion allocated to investing in the responsiveness and safety of the network, of which half will be targeted at resilience to create a foundation for net zero demands.

“Networks will unlock the electrification of the economy with billions of pounds in investment to create modernised local electricity grids fit for a net zero future. Our RIIO-ED2 business plan represents an important and critical step in this journey,” Chris Burchell, managing director of SSEN Distribution, said.

However, Burchell further called for action from the regulator. “We now need Ofgem to support this aim by providing an agile price control framework which gives the certainty and flexibility required to meet evolving policy and customer needs,” he said.

Scottish and Southern Electricity Network’s RIIO-ED2 business plan includes six goals to deliver over the period, which amongst other aims will facilitate the connection of 1.3 million electric vehicles and 800,000 heat pumps on its network.

The company’s full RIIO-ED2 business plan can be read here.

Northern Powergrid

Northern Powergrid is looking to take a ‘Flexibility First’ approach in its RIIO-ED2 business plan, working to use data and digitalisation to help connect 941,000 electric vehicles and 309,000 heat pumps during the period.

It is to invest £156 million in flexibility and smart grid solutions, which will allow for 45% of its data products and services to be refreshed in real time. It will invest £500 million in capacity expansion, and £1.1 billion in resilience.

Additionally, the DNO has earmarked £465 million in decarbonisation synergy savings beyond 2028.

"Although this is a five-year plan, it has to begin to solve problems where the answers will manifest themselves over the next 25 years. In that respect, the long-term horizon of our owner – Berkshire Hathaway Energy – has been a real strength,” Phil Jones, chief executive of Northern Powergrid, wrote in the business plan.

“We have been able to take decisions to make investments now that will make the overall transition both more likely to succeed and cheaper in the long run. They will also help to power the economy in the region as, together, we work to drive economic growth, supporting the government’s ambitions to spread prosperity across the country and repair the damage done by the pandemic.”

Read the company’s full RIIO-ED2 business plan here.

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