UK Achieves Milestone in Clean Energy from Renewable Production
In a significant move towards a net zero energy system, the energy regulator, Ofgem, has opened a consultation on the RIIO-3 licence conditions and price control financial instruments. The proposed changes aim to support the UK government's Clean Power 2030 Action Plan and enable a low-carbon energy future.
Electricity Transmission Changes
The proposed changes for electricity transmission licensees focus on enhancing the resilience and compliance of the National Electricity Transmission System. New investments will support the connection and integration of large amounts of renewable generation, such as upgrading networks to 400kV to handle higher capacities and renewable power flows.
Gas Transmission and Distribution Changes
For gas transmission and distribution, the proposed changes mandate plans that enable the capability and resilience of the National Transmission System for gas. The licensee must consider system security, points of failure, network constraints, and standards that anticipate future energy needs. Crucially, there is a requirement to identify investments supporting the energy transition, including new hydrogen networks.
Centralised Strategic Network Plan (CSNP)
The RIIO-3 Gas Strategic Planning Re-opener mechanism will be used for CSNP projects, ensuring timely, transparent stakeholder communication and strategic coordination across gas and electricity networks to remain within relevant technical standards.
Impact on Network Management
The licence modifications promote proactive and strategic network management aligned with net zero goals by requiring network operators to plan for resilience, integrate renewable and low-carbon technologies, and reduce constraints in transmission and distribution systems. The RIIO-3 framework supports large-scale investment in transmission infrastructure upgrades needed for expanded renewable capacity and clean power delivery by 2030.
The Consultation
Interested parties are invited to complete the consultation response grid and send it to [email protected] by 16 September 2025. The consultation also seeks views on the price control financial instruments (PCFIs).
Current Energy Landscape
The closure of Britain's last coal-fired power plant in September 2024 and reductions in oil and gas production in the North Sea have contributed to a fall in fossil fuel generation. Renewable energy provided 50.4% of the country's electricity in 2024, an increase from the previous year's 46.5%. Despite lower-than-average sun hours in 2024, solar generation still delivered its second-highest output on record. Wind is set to soon overtake fossil gas, comprising 29.2% of Britain's power mix last year.
The Future of Fossil Fuels
Gas-fired power plants remain the UK's biggest power generator, though their output dropped by 15% in 2024. The proposed changes to the Standard licence conditions will be limited, while Special conditions, which apply to a particular licensee, will see the most substantial changes between RIIO-2 and RIIO-3.
These changes are instrumental in transforming UK electricity and gas networks to meet the demands of the Clean Power 2030 vision through improved resilience, strategic investment, flexibility, and alignment with net zero strategies. This holistic approach is essential to manage the future energy system's complexity and deliver a clean, secure, and affordable energy supply.
[1] Alyth – Tealing overhead line upgrade [2] Ofgem's RIIO-3 consultation [3] Clean Power 2030 Action Plan [4] Scottish Government's £20bn investment in transmission infrastructure [5] National Electricity System Operator (NESO)
- The proposed changes for electricity transmission licensees under Ofgem's RIIO-3 consultation are focused on supporting the connection and integration of large amounts of renewable generation, including investments to upgrade networks to 400kV to handle higher capacities and renewable power flows, which aligns with the UK government's Clean Power 2030 Action Plan and the goal of a low-carbon energy future.
- In the gas transmission and distribution changes, there is a requirement for licensees to identify investments supporting the energy transition, such as new hydrogen networks, which adheres to the finance sector's role in enabling the renewable-energy industry to meet the energy needs of a decarbonized economy.
