Competition in connections

The value of the connections market is in excess of £500 million a year with hundreds of thousands of connections completed each year. The installation of new connections assets helps to minimise natural monopolies through the creation of an element of competition.

Independent Connection Providers (ICPs) and licensed Independent Distribution Network Operators (IDNOs) can compete with Distribution Network Operators (DNOs) to complete some connection activities. Given the significant volume and value of this market, we would expect that effective competition could develop with the right conditions.

The competition test

Following its introduction in 2000, the development of competition for electricity connections had been slow compared to gas. Because of this, we developed measures in the Distribution Price Control Review 5 to improve the conditions for competition. Collectively these measures are referred to as the ‘competition test process’.

While competition had developed in some sections of the market, the results of the test showed that it had not taken hold in all areas.

Our review of the market

In June 2014 we opened our review of the market for new connections to the electricity distribution network in response to continued concerns about whether competition in this market is effective.

Following a call for information, we published an update in October 2014 explaining that we had found issues in the market that could limit competition, a number of which relate to the DNOs’ role in the connections process. As such, we asked DNOs to explain how they would be addressing the issues identified.

Most recently in January 2015, we published a consultation outlining our proposed solutions to the issues identified and the best way to implement them. We want to ensure DNOs place an enduring focus on adopting, harmonising and maintaining best practice behaviour in the connections market.

We intend to do this by introducing a new licence condition to require DNOs to reduce the extent to which competitors depend on them for essential services. Where the DNO is required to provide these services, it will need to do so on same basis to both its competitors and own connections business.

DNOs will collectively need to harmonise their arrangements for competition. This will be achieved through an enforceable Code of Practice (CoP) with which DNOs will have to comply.

Publications and updates

  • Published: 16th Dec 2020
  • Decisions
  • 1 Associated documents
Our decision on the 2020 Incentive on Connections Engagement process

  • Published: 3rd Jul 2020
  • Closed: 28th Aug 2020
  • Consultations and responses
  • 4 Associated documents
We are consulting on DNOs' 2020 submissions under the Incentive on Connections Engagement.

  • Published: 23rd Oct 2019
  • Decisions
  • 1 Associated documents
The modification seeks to make it clearer that DNOs must provide input services on an equivalent basis to all parties.

  • Published: 20th Dec 2018
  • Decisions
  • 2 Associated documents
This modification will amend the electricity distribution licences so that licencees will be exempt from the obligation to offer terms for making a connection where the requester has not paid the relevant connection offer expenses.

  • Published: 24th Apr 2017
  • Decisions
  • 1 Associated documents
The modification seeks to ensure that the requirements of the CiCCoP are consistent with the requirements of the electricity distribution licence.

  • Published: 16th Jan 2017
  • Decisions
  • 1 Associated documents
The modification seeks to correct administrative errors in the Competition in Connections Code of Practice (CiCCoP).

  • Published: 11th Jul 2016
  • Decisions
  • 1 Associated documents
This modification to the Competition in Connections Code of Practice (CiCCoP) is to introduce clear, common reporting requirements for all DNOs to demonstrate compliance with the code.

  • Published: 27th Apr 2016
  • Decisions
  • 1 Associated documents
This modification to the Competition in Connections Code of Practice seeks to introduce a clear, common process for self-determination of Point of Connection by Independent Connection Providers.

  • Published: 27th Apr 2016
  • Decisions
  • 1 Associated documents
This modification to the Competition in Connections Code of Practice seeks to introduce a clear, common process for design approval by Independent Connection Providers.

  • Published: 4th Sep 2015
  • Decisions
  • 2 Associated documents
Decision to introduce a new competition in connections of the electricity distribution licence.

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