Our RIIO-T2 Business Plan On this page you'll find all the details of our 2021 to 2026 Transmission Business Plan. December 2020 An update following Ofgem's Final Determination Ofgem have released their Final Determination on our RIIO-T2 Business Plan, due to take effect on 1 April 2021. Commenting on the release of the determination our CEO, Frank Mitchell, said: “This is a large and complex document and we will now take our time to analyse it in full and consider our next steps. “We remain concerned that Ofgem’s proposals on the headline rate of return will not attract the global investment our transmission business requires if we are to support the clear Net Zero ambitions of the UK and Scottish Governments, including the Prime Minister’s Ten Point Plan.” We expect to receive Ofgem’s statutory licence consultation for RIIO-T2 shortly and will provide a full response in mid-January. Find out more about our RIIO-T2 Business Plan CEO update: Draft Determinatioin September 2020 Frank Mitchell, CEO of SP Energy Networks: Responding to Ofgem’s RIIO-T2 Draft Determination Back in December of last year we submitted our plans to Ofgem for review. That plan detailed our ambitions for the Transmission network over the next five years - building on our long-term track record to help deliver an electricity network for Net Zero and maintaining the level of reliability customers have come to expect, all for less than £5 per year. We worked hard to make sure our plan was founded on the best interests of consumers, our network users and wider stakeholders alike - as well as contributing to Scottish and UK Government net zero targets. In July, Ofgem released their ‘Draft Determination’ on our plan – setting out their views following a six-month review. In that determination they propose to drive companies to the lowest cost denominator, which is at odds with the drive we’re seeing from government where there’s rightly a focus on how best to attract investment in a powerful economic stimulus that delivers long-term benefits. We have provided a robust response to Ofgem’s consultation on the plans – formally setting out our view that these proposals are not fit for purpose. In building this response, just as we did with our Business Plan, we’ve made sure that our positions are based on robust evidence, assessed and verified by independent experts and have the backing of our key stakeholders such as our independent Transmission User Group. We stand ready to support the UK’s accelerated road to Net Zero and create a green recovery that stimulates more high-quality jobs. We will work constructively with Ofgem over the coming months and we hope that Government can ensure Ofgem have a clear remit to stimulate increased investment and create jobs over the short term. Frank Ofgem's Draft Determination September 2020 We do not believe the determination is an accurate reflection of a robust assessment of our plan, nor does it present a cohesive alternative proposal that offers value for consumers or adequately protects shareholders. We also believe that it doesn’t reflect the views of the wide range of stakeholders who have informed our business plan throughout the process. In building our plan we engaged with 6,851 external stakeholders through events, bilaterals and surveys, and received 144,027 engagements through our online, press and #ChallengeOurPlan campaign. Our plan was also supported by our independent RIIO-T2 User Group who provided expert, external challenge and input to our plan – describing our plan as “an evidence-based, cost-effective Business Plan”. Put simply, we consider the RIIO-T2 Draft Determination to be unacceptable due to: The returns proposed in the RIIO-T2 Draft Determination are the lowest in UK history for this sector and well below those available against comparable companies who are competing to attract similar investment - such as the USA This Draft Determination will not deliver the Green Economic Recovery at pace to support the UK and Scottish Government’s ambition in response to the economic impact of COVID-19 The expenditure adjustments and nature of the uncertainty mechanisms do not provide investors with confidence and will ultimately slow down the ability for new renewable generation to be connected – directly hindering the country’s ability to meet the government’s ambitious targets for Net Zero Our business plan created opportunities and benefits beyond only the electricity transmission network which have been removed in the Draft Determination. This is a missed opportunity to create job opportunities, economic growth across the energy sector in Great Britain, reducing the environmental impact of our operations and the subsequent health benefits that this creates through more renewable generation being connected and improved bio-diversity. More information Download the Executive summary of our response Download our full response Download the Board assurance statement Our plan In order to ensure our RIIO-T2 business plan was formed in the best interests of consumers, our network users and wider stakeholders, the SP Energy Networks Board have taken a proactive involvement in the creation and development of the plan from the outset. Our Board Assurance Statement outlines the confidence and certainty in our ambitious and efficient proposals. We have created two further documents to assist in your journey through our plan. Our Business Plan Summary document condenses the key areas of our plan in order to allow you a quick and easy overview. In addition, we have our Navigating our RIIO-T2 Business Plan document, created to help you navigate through our plan with an outline of some of the key elements. We have also have produced 36 supporting Annexes, which offer further detail and analysis on our overall plan – providing you with a further insight into the underpinning details. More information Download our RIIO-T2 Business Plan Supplementary Business Plan As part of our submission to Ofgem, we have included an additional business plan, titled ‘Annex 34: Our Supplementary Business Plan’. Ofgem’s working assumptions, particularly around the Cost of Equity (CoE) are not aligned to our views. We have therefore provided our supplementary business plan which is based on our expectations and financial parameters. You can view this by visiting our Annex page and selecting Annex 34: Our Supplementary Business Plan. Watch our business plan launch video Accessibility options: Text transcript Supporting Documentation & Additional Information Annexes In order to support our business plan, we have also provided an additional 36 Annexes, including our supplementary business plan, with further information and analysis on key areas. Navigating our RIIO-T2 Business Plan This document provides a user-friendly overview of the SPEN RIIO-T2 Business Plan. We’ve outlined key elements of the plan, how they’re structured and added some key guidance points to help you navigate through the document. Business Plan Summary This Business Plan Summary document acts as an overview of the key points of our plan as well as discussing our ambitions, challenges and financial projections for the RIIO-T2 period. Board Assurance Statement This document sets out the Board Assurance Statement for the plan and details why we are confident that the content and associated costs have been tested for accuracy, ambition and efficiency.