Additional NIA RIIO-ED2 funding: licence modifications

Details of outcome 

We received four responses all in support of our proposed modifications to Special Condition 5.2 of the Electricity Distribution Licence. As a result, we will be implementing these proposed changes, which will come into effect on 27 March 2026. Distribution Network Operators (DNOs) will, therefore, have access to Network Innovation Allowance (NIA) funds awarded for the final two years of RIIO-ED2 as decided upon in our October 2025 decision.  

Read the full outcome

Original consultation

Consultation description

We launched a consultation in March 2025 regarding our proposal to provide additional funding through the Network Innovation Allowance (NIA) for the final two years of RIIO-ED2. In August we decided to carry out a detailed assessment of companies’ justifications for receiving further allowance before providing additional NIA funding to Distribution Network Operators. This assessment informed our October decision on the amounts of additional NIA funding each DNO would receive.

As amendments to Special Condition 5.2 of the Electricity Distribution Licence will be needed to facilitate these additional allowances, this statutory consultation has been launched in time for proposed modifications to take place by 31 March 2026. It will run for 32 days and will take effect 56 days after our final decision. 

Who should respond

We welcome responses from:

• Distribution Network Operators
• anyone with an interest in innovation funding in the energy sector

Note: the amended licence special condition documents attached below are not fully accessible. If you require an alternative format, please contact networks.innovation@ofgem.gov.uk.