IN Brief:
- Ofgem has assessed 30 electricity-transmission applications submitted through the May 2026 RIIO-ET3 Load Re-opener.
- The mechanism provides additional allowances for eligible new-load projects absent or only partly funded when RIIO-ET3 was set.
- Consultation on the draft determinations remains open until 24 September 2026.
Ofgem has issued draft determinations covering 30 applications submitted through the May 2026 RIIO-ET3 Load Re-opener, setting out proposed funding decisions for transmission infrastructure required by new electricity demand.
The mechanism covers eligible projects that were not funded, or were only partially funded, when RIIO-ET3 allowances were established. Instead of attempting to predict every transmission requirement before the five-year control period begins, the re-opener allows expenditure to be reconsidered when prospective loads have developed sufficiently to justify another regulatory assessment.
RIIO-ET3 began on 1 April 2026 and runs until 31 March 2031. It covers National Grid Electricity Transmission in England and Wales, Scottish Power Transmission in southern Scotland, and Scottish Hydro Electric Transmission across northern Scotland and the islands.
Responses to the draft determinations are due by 5pm on 24 September. Ofgem’s consultation material includes eligibility assessments, project-level analysis, underlying data, and treatment of major-project output incentives rather than presenting the 30 transmission-owner submissions as automatic additions to regulated allowances.
Large new loads are difficult to forecast
Transmission price controls are set before much of the infrastructure they govern has been built, creating an unavoidable forecasting problem when the location, scale, and timing of future electricity demand remain uncertain. Industrial electrification, data centres, storage, transport infrastructure, hydrogen projects, and new distribution requirements can move from speculative enquiries towards firm connections within the life of one price-control period.
Funding every potential reinforcement at the beginning would expose consumers to assets that may never be required. Waiting for every customer project to become fully committed produces the opposite risk, because major substations, lines, transformers, and switchgear can take years to procure, construct, and commission.
The Load Re-opener is designed to manage that gap. Transmission owners can return with projects that have acquired a stronger need case, while Ofgem can reassess scope, timing, cost, and the proportion of expenditure that should enter regulated revenues.
Thirty applications in one submission window underline the amount of load-related work passing through that process, but volume alone says little about which projects ultimately merit funding. One connection may require limited extension of an existing substation, while another can trigger wider reinforcement across transformers, circuits, protection systems, reactive-power equipment, or several voltage levels.
Equipment lead times complicate the regulatory decision further. Large transformers and high-voltage switchgear often have to be ordered long before the customer drawing power from them is operational, while civil works, planning, outages, and commissioning all need to be sequenced around those deliveries.
Uncertainty mechanisms are carrying more investment
RIIO-3 was deliberately structured around a combination of upfront allowances and later mechanisms. Ofgem’s final determinations approved £28.1 billion of upfront investment across electricity transmission, gas transmission, and gas distribution within a broader investment pipeline of around £90 billion during the control period.
The difference reflects projects whose precise need, cost, or timing could not be fixed credibly when the settlement was made. Re-openers and other uncertainty mechanisms allow those schemes to return to the regulatory process once better evidence exists.
Transmission equipment procurement creates another version of the same problem. Ofgem has also used an Advanced Procurement Mechanism where ordering equipment earlier can reduce exposure to long manufacturing lead times, while still requiring a case for consumers to fund capacity before every downstream project detail is final.
The tension is straightforward: network operators may need factory slots before a connection customer has completed every commercial milestone, but regulators cannot simply authorise speculative purchases because supply chains are tight. The resulting process is likely to become increasingly important as several transmission programmes compete for the same classes of equipment.
Distribution networks are dealing with a comparable problem. Ofgem has already revised RIIO-ED2 load-related allowances as electrification alters reinforcement requirements, although transmission projects generally involve fewer individual schemes and much larger units of expenditure.
The August consultation therefore sits between demand forecasting and physical construction. A favourable draft determination does not energise a connection; it establishes the regulatory funding basis from which detailed design, procurement, planning, construction, testing, and commissioning can continue.
The final decisions will show how Ofgem is balancing those risks across the 30 applications. The regulator has to leave enough flexibility for networks to respond to credible new loads without turning every prospective demand project into an immediate claim on existing consumers.
That judgement becomes harder as electricity demand grows in larger blocks and at locations that were not obvious when the price control was set. RIIO-ET3’s re-opener process is effectively testing whether the regulatory timetable can move quickly enough to support transmission delivery without abandoning the cost scrutiny that justified a five-year control in the first place.
