We’ve today launched our draft RIIO-ED2 Business Plan, detailing the £3.2 billion worth of spending that’s needed to ready the UK for an electric future.
To halt the effects of climate change, we need to achieve Net Zero carbon emissions, and this will lead to huge shifts in how we live our lives, most prominently as we replace the use of fossil fuels for transport and heat.
We’re forecasting that up to 1.5 million EVs, 0.9 million heat pumps, and over double the amount of distributed generation, will be supported by our networks by the end of this decade. The work outlined in our plan will kick-start the much-needed growth in these low carbon technologies with over 670,000 electric vehicles, 370,000 domestic heat pumps, and an additional 5GW of low carbon electricity generation connected through the five-year investment.
This is a radical increase on what we have today, and it will impact every part of our business and the future of our country.
Our draft RIIO-ED2 Business Plan sets out our response to this challenge.
From 2023 to 2028 we will spend over £3.2 billion on our distribution networks to make sure that we can enable the path to Net Zero.
To do this, we will recruit for over 1,100 jobs in the communities that we serve – and more in our supply chain. We too will lead our own drive to Net Zero through a 38% reduction in our carbon footprint by 2028. And we'll do this all while supporting our vulnerable customers in a time of great transition, delivering £62.5 million of benefits to them through our extended support proposals.
We’ll also continue put our customers, communities and stakeholders are at the heart of everything we do. In RIIO-ED2, we need to respond to our customers’ changing needs as we move towards Net Zero.
We’ve set out our plans to continue delivering exceptional service, support for our most vulnerable customers and take on a more proactive role in our communities. Our customers already rate us at over 9 out of 10 for satisfaction and we plan on going even further. We will be a partner that supports the journey to Net Zero, bridging the gap from ambition to action where we can, to make sure that we leave no-one behind in the energy transition.
Speaking on the launch of the plan, our CEO, Frank Mitchell said: “This is the most ambitious plan we have ever built, informed by over 15,000 engagements with customers and stakeholders.
“It’s also, perhaps the most important plan we have ever produced, developed at a time of profound change. The challenge that will touch every part of our society is to halt the effects of climate change. To do this, we need to achieve Net Zero carbon emissions.
“Our electricity distribution system will face the biggest changes to its design and operation for over half a century. Distribution networks were designed for predictable, stable demand. With Net Zero, electricity demand, generation, and consumer behaviour, will all change. Our networks are the product of a century of incremental evolution, and the opportunities from new technology and innovation will lead to a consumer-led revolution in the use and operation of our system.
“In over 30 years of my career in this industry, I have witnessed an enormous amount of change across the full value chain of the electricity sector. The decades since privatisation have delivered huge improvements in service to our customers, and I’m proud to lead a business that continues to push the boundaries. But I see greater change, and greater opportunity, ahead.
“This is a challenging, but exciting time. In RIIO-ED2 we have the opportunity to re-think our approach to the grid and unlock greater value for our customers. We have the opportunity to evolve our role from an essential service provider to a trusted partner for our communities. And we have the opportunity to lead by example to a truly sustainable future.”
Following publication of this plan we look forward to the next phase of engagement and consultation ahead of our final plan in December.
You can view our plan and have your say in our online consultation.
What is RIIO and why is it so important?
RIIO stands for Revenue = Incentives + Innovation + Outputs and RIIO-ED2 is the next electricity distribution price control period which will run from 2023 – 2028.
It’s through this framework that Ofgem scrutinises and approves network plans, making sure that investments deliver value for customers now and in the future. We operate as a regulated monopoly. In simple terms this means that there’s no traditional market competition to govern revenue because we’re the only owners and operators of the electricity network in our areas. This is true for many network companies across different sectors (water, gas and electricity).
This price control - our contract with the regulator, Ofgem – will set out our investments, outputs and costs over this period. It will be our roadmap to tackle the climate emergency, create new jobs and support our customers and stakeholders through the energy transition.