Ofgem has published the rules governing how Britain’s five electricity distribution network operators will plan and fund grid investment between 2028 and 2033.
The scheme called ED3 will be introducing tighter cost controls, stronger consumer protections and financial penalties for underperformance.
The Sector Specific Methodology Decision sets out how the five DNOs must justify investment against robust evidence, requiring networks to maximise existing grid capacity through flexible technologies before committing to new physical infrastructure.
Under a new “build and flex” approach, tools such as smart EV charging, battery storage and demand-side response must be deployed first to manage network constraints.
DNOs must submit their 2028 to 2033 business plans in December this year.
Ofgem’s draft determinations will follow next summer, with final decisions for each company made by the end of 2027. The new price control period begins on 1 April 2028.
The rulebook introduces stricter accountability measures including standardised performance dashboards, comparative data and financial clawbacks where companies fail to deliver on commitments.
New requirements will also strengthen protections for vulnerable consumers, including expanded Priority Services Registers and enhanced response plans for extreme weather events.
Ofgem Director of Network Price Controls Steve McMahon said: “Our rulebook strikes a tough but fair balance in expanding grid capacity to meet the demands placed on them. It ensures investment is targeted, justified and delivers value for money. This blocks unnecessary physical upgrades and reinforcements based on speculative forecasts being recouped prematurely from bills.”
Britain’s electricity distribution network spans more than 800,000 kilometres of cabling connecting 30 million customers.
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