Elexon’s response to Ofgem’s consultation on ED3 Framework

In this consultation, Ofgem asked for views on the framework for the next electricity distribution price control, starting in April 2028.  

The consultation closed on 16 January 2025.

Elexon’s view

We are generally supportive of Ofgem’s proposals for networks for net zero and smarter networks, agreeing with the reasoning behind them.

Strategic messaging

While we acknowledge that Ofgem has reaffirmed their support for flexibility in the consultation, we feel there is an opportunity to better articulate the strategic messaging around the transition from the network price controls 2021-2028 (RIIO-ED2) emphasis on “flexibility first” to a greater focus on network reinforcement in RIIO-ED3. This is crucial to ensure the continued recognition of flexibility’s critical role, as outlined in CP30, particularly as these changes are introduced.

Network reinforcement

We believe this should be complemented by other tools, such as network flexibility. With RIIO-ED2 focused on saving consumers money and RIIO-ED3 aimed at creating networks capable of delivering net zero, we see this as an optimal moment to merge these objectives. RIIO-ED3 should focus on achieving both outcomes: cost efficiency for consumers and the development of networks aligned with net zero goals.

Role of flexibility

Flexibility plays a crucial role in DSO regions by managing constraints, deferring, and sometimes avoiding network reinforcement. This role is expected to grow significantly during RIIO-ED2. This growth will be driven by the maturation of local flexibility markets and the introduction of the Market Facilitator to support their development. Again, we believe it is essential that Ofgem ensures its strategic messaging supports this focus and avoids sending mixed signals to DSOs within the price control framework.

Read our response in full

Elexon’s response to ED3 Framework Consultation (Size: 130.76 KB)

Further information

Framework consultation: electricity distribution price control (ED3) (Ofgem website)

Contact Information

Communications Team
[email protected]

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