Ofgem outlines transformational framework for local electricity networks to deliver clean power and support growth

Press release
Publication date
Industry sector
Distribution Network

Ofgem has laid out a blueprint for the landmark electricity distribution price control period starting in April 2028 (‘ED3’), covering a pivotal period in the pathway to a clean power system by 2030 and laying the foundations for the wider decarbonisation of the economy.  

This critical five-year investment period to 2033 will help unlock unprecedented investment to expand access to clean and affordable power in towns, cities and communities across Great Britain. 

The ED3 framework responds to the recent recommendations from the then National Infrastructure Commission’s (NIC) review of local electricity networks, the evolution to a far more planned system at the regional level and far-reaching reforms to the connections process. Ofgem’s new regulatory model will help maximise the opportunities presented, driving critical new investment, speeding up connections, strengthening resilience, and ultimately delivering for consumers both now and in the future. 

This refreshed framework will guide the investment and delivery of crucial network services, focussing on four key areas: 

  • Networks for net zero: A more proactive approach to investment will ensure the networks are ready for a net zero future.  Companies will be funded and then held firmly to account for delivering the infrastructure needed for our growing demands for electricity. 
  • Responsible and sustainable businesses:  As with previous price controls, we’ll drive network companies to minimise their environmental impact, and deliver excellent customer service, with a heightened focus on support for the more vulnerable customers. New measures will ensure that electric vehicle charging points, renewable generation as well as housing and industry can get connected to the local grids in a speedy and efficient way.   
  • Smarter networks: The digitalisation of the energy sector will be key to a more efficient and resilient system. In ED3, distribution network operators (DNOs) will need to enhance their data sharing and processing capabilities, and we will continue to use incentives and funding to drive innovation in how the network companies plan and operate their business. 
  • Resilient networks: As society becomes more dependent on electricity for its power, transport and heating needs, it is even more essential that DNOs are maintaining and replacing their assets to ensure sure their networks are reliable both for the present and future, and able to withstand future risks such as extreme weather events and cyber-attacks. 

Steve McMahon, Ofgem Director for Network Price Controls, said: “The local electricity distribution grids are central to the Government’s clean power mission and the wider transition to net zero, enabling the decarbonisation of heat, transport and industry. 

“The scale of the opportunity is clear, and it is vital we take a new strategic regulatory approach, enabling more planned, proactive investment in network capacity whilst ensuring speedier and more efficient connections of new technologies. We must also continue to consider the evolving roles and responsibilities of the DNOs in the net zero transition, particularly around the decarbonisation of heat and transport and improving energy efficiency. 

He added: "Taken together with the wider RIIO-3 programme, these are our most consequential set of price controls that will see the biggest grid expansion in a generation, paving the way towards a clean energy system that supports the wider electrification of the economy."

ED3 will see the fourteen electricity DNOs play a key role in delivering some of the biggest changes seen in a generation to Great Britain’s energy grid including: 

  • The switch to a clean power system by 2030 which will be more dependent on low carbon power sources including a growing number of renewables such as wind and solar, which will need to be plugged into the grid 
  • More EVs (electric vehicles) are anticipated to hit roads with the Government’s planned ban on the sale of new petrol and diesel cars from 2030 
  • The increasing electrification of heat with many more heat pumps expected to be installed in homes across the country 
  • Further anticipated growth of the electricity hungry AI and data centre sectors 
  • Increased flexible energy use with consumers increasingly using smart technology to time energy use with favourable tariffs  
  • A greater amount of regionalised planning via new Regional Energy Strategic Plans (RESPs)   

The price control will determine funding available for DNOs to deliver work including the major expansion of the existing distribution network of around 800,000km of cables and wires which is envisaged by both NESO and the Government’s Clean Power 2030 Action Plan to fulfil growing demand for, and dependence on electricity.  

Through the ED3 price review process Ofgem will work with DNOs to: 

  • Provide increased certainty in investment needs, helping reduce costs and supporting investment across supply chains while establishing a sustainable and skilled workforce for the long term. 
  • Develop innovative solutions and business technologies to improve the day-to-day delivery of network services while meeting the challenges of a clean power system. 
  • Increase the security and resilience of critical local infrastructure, ensuring high standards of asset stewardship are maintained while developing improved responses to the growing issues of climate related weather disruption and cyber threats. 
  • Ensure the sector remains financially robust, with stable and predictable regulation enabling the step change in new capital investment to be injected efficiently for the benefit of current and future consumers. 

Find out more about the framework 

Ofgem will now develop its methodology for the price controls, which will inform the DNOs business plans for 2028 to 2033, which Ofgem expects to receive in late 2026. 

Notes to editors 

Next steps 

Ofgem will now develop its detailed methodology for the price control period in line with this framework, setting out how it will be implemented in practice through service delivery, the use of incentives, our approach to assessing costs and establishing the overarching financial framework.  

This will inform the spending plans which Ofgem expects to receive from DNOs in 2026. 

The price control will then be further developed ahead of being finalised and coming into effect from 1 April 2028, when it will run period of 5 years up to 31 March 2033. 

The electricity distribution networks and clean power 

The electricity distribution system is at the heart of an unprecedented change in how and where electricity is generated and used. Enabling this transition to a more decentralised, cleaner and more digitally enabled electricity system is vital for wider economic growth, energy affordability and meeting net zero goals.  

The companies that operate the electricity distribution networks in Great Britain are known as distribution network operators (DNOs). DNOs are regulated by us under a price control framework that we review periodically.  

Ofgem’s Framework Decision sets out how the next price control (ED3) will deliver against the challenges and opportunities facing the electricity distribution sector.   

Reforms to strategic planning and the way the connection queue is managed have wide-reaching implications for ED3, creating the opportunity for a fundamentally different, longer-term approach to network planning and investment.   

At the same time, distribution networks must continue to provide high levels of resilience, particularly given the shift to an economy that is increasingly reliant on electricity for transport, heating and industry.    

Evidence of the pace of change in the sector can be observed in the number of policy statements, decisions and industry reports that have been published since the ED3 framework consultation in November.    

In December 2024, the Government published its Action Plan for Clean Power by 2030. In February 2025, the National Infrastructure Commission (NIC) completed its independent review of the Electricity Distribution system and of the associated regulatory framework. In April 2025, Ofgem published our approval of the reforms to electricity connections, to move to a ‘first ready & needed, first connected’ regime; to increase the rate of connections and deliver Clean Power 2030.  

ED3 is central to the successful implementation of all these initiatives and reforms. Our Framework Decision has been heavily influenced by the imperative to ensure the distribution networks are enablers of Clean Power 2030 and Net Zero carbon emissions by 2050.   

Providing the capacity and resilience to meet our future energy needs will require an increase in network investment and we are mindful of the consequence this will have for customer bills in the near-term. While we are confident that in the longer-term this investment will ultimately support a reduction in energy costs, we will remain focused on the affordability challenge facing many consumers. In setting the price control will seek to ensure that companies are only permitted to recover efficient costs so that the impact on bills is minimised.