DNO Low Carbon Technology - Energy Efficiency role in ED3

What this is about

Ofgem is asking the threshold question for RIIO-ED3, the electricity distribution price control that runs from 1 April 2028: should DNOs be passive wires businesses that connect whatever heat pumps, EV chargers and solar panels customers choose to install, or should they become active managers of household electrification, running programmes that target, advise, and in some versions directly procure low carbon technology and energy efficiency uptake? The document is explicitly "part consultation and part call for input", which is regulatory language for "we have not decided, but we are minded to do something." It feeds the wider ED3 methodology work and, more specifically, decides whether Ofgem proceeds to a follow-up consultation on piloting an "Expanded Role" for DNOs.

The timing is driven by the ED3 methodology calendar. The framework decision is already published; the sector-specific methodology consultation is open in parallel. Ofgem needs to settle the scope of what DNOs are funded to do before it can set the allowed-revenue methodology, because every obligation placed on a DNO is an obligation that has to be costed, added to allowed expenditure, and recovered through Distribution Use of System charges. The prompt is the electrification ramp: heat pump and EV uptake is the single largest source of new load on the distribution network over the ED3 period and beyond, and Ofgem is deciding whether the network company should be a builder of capacity that responds to that load, or a shaper of where, when and whether that load appears. That is not a technical question. It is a question about how much of the energy transition runs through a regulated monopoly's spending allowance.

Options on the table

The consultation page itself only names the spine of the choice (a status quo "wires" role versus an "Expanded Role" that Ofgem might pilot). The substantive options sit in the 721KB consultation PDF, which is not in the extracted text. What follows is the structure Ofgem's framing implies; the specific sub-variants and their boundaries need to be read from the PDF before a response is drafted.

Passive wires company (status quo)

The DNO connects and reinforces the network in response to demand. A customer or their installer decides to put in a heat pump or an EV charger; the DNO's job is to make sure the network can carry the load, through connections processes and network reinforcement funded in the price control. The DNO does not market, advise on, target or procure low carbon technology. Energy efficiency and technology adoption are someone else's job, whether that is suppliers, installers, government schemes, or the customer. This is the cheapest role for the DUoS payer in the narrow sense, because the DNO is funded only for wires and the connections that load requires. The risk Ofgem is implicitly raising is that uncoordinated, unmanaged uptake produces lumpier and more expensive reinforcement than a steered rollout would, so "cheapest role" and "cheapest outcome" are not necessarily the same thing. That is precisely the argument an Expanded Role would lean on.

Enabling or facilitation role

A middle option: the DNO does not procure technology but actively reduces the frictions around it. This typically means better network visibility and data (where there is headroom, where reinforcement is coming), faster and cheaper connections for low carbon technology, flexibility procurement so that managed EV and heat pump load defers reinforcement, and signposting customers and installers to network constraints and opportunities. The DNO shapes the conditions for uptake but does not own the uptake target. Winners: customers and installers who get clearer signals and faster connections, and DUoS payers if flexibility genuinely defers capital. Losers: nobody obvious, which is why this is the comfortable institutional answer. The economic question to press is whether "facilitation" is doing real work or is a label for spending that should sit with the parties who actually benefit from the connection.

Expanded Role (active programme manager, pilot-led)

The DNO takes a direct hand in driving low carbon technology and energy efficiency uptake: targeting specific areas (often network-constrained or fuel-poor), running or funding advice and outreach, and in the strongest variants procuring or part-funding energy efficiency and technology measures directly. Ofgem is not proposing to switch this on wholesale; the explicit purpose of the consultation is to decide whether to pursue "a subsequent consultation on the details of future pilots of an Expanded Role." So the live decision is narrower than it looks: not "should DNOs run electrification" but "should Ofgem spend the next phase designing pilots that test it." That framing matters, because pilots have a way of becoming the baseline. Winners: the parties delivering the programmes, and potentially constrained-area or fuel-poor households who would not otherwise act. Losers: the general DUoS payer, because the cost of an Expanded Role goes into the DNO's allowed expenditure and therefore into the regulated asset value and the charge base, recovered from every distribution-connected consumer regardless of whether they benefit from the programme. This is the option to scrutinise hardest, and the one the consultation's structure is steering toward.

The thing to watch across all three is the framing test flagged in the analysis: does the PDF ask *whether* DNOs should have a role, or does it presume a role and ask only *how big*? A call for input that has already decided to consult on pilots has, in practice, answered the "whether" question. The honest response engages with the threshold question even though Ofgem has half-closed it.

Questions being asked

The consultation page states that questions are embedded throughout the PDF ("We have asked for your feedback in each of the questions throughout"), and none are reproduced in the extracted text. The numbered questions cannot be listed verbatim without the document. Based on the consultation's stated purpose, the questions will cluster around the following themes; the actual numbered questions must be lifted from the PDF before drafting.

The threshold question

Whether DNOs should have any expanded role in low carbon technology and energy efficiency at all, beyond connecting and reinforcing. (This is the question the rest of the document is built to move past. Answer it directly rather than accepting the move.)

Scope and boundaries of an Expanded Role

What specific activities an Expanded Role would and would not include, where the line sits between facilitation and direct delivery, and how a DNO role would interact with suppliers, installers, government schemes and any future market-wide energy efficiency obligation. (This is really asking respondents to help draw a boundary that protects against scope creep, or to argue there should be no boundary because the role should be broad.)

Pilots

Whether Ofgem should proceed to a further consultation on designing Expanded Role pilots, what those pilots should test, how success would be measured, and over what timescale. (The operative decision in the whole document. A "yes, pilot it" answer is a vote to keep the option alive into ED3 methodology and likely into the control itself.)

Funding and cost recovery

How an Expanded Role would be funded within the ED3 price control, how costs would be controlled, and how Ofgem would prevent gold-plating or RAV inflation. (This is where the DUoS-payer interest lives. Press for explicit cost attribution: who benefits, who pays, and why those should not be the same parties.)

Consumer outcomes and distribution

How an Expanded Role would affect different consumers, particularly whether it should target fuel-poor or constrained areas, and how benefits and costs are distributed across the consumer base. (Asking whether the role is justified on equity grounds, which is a different and weaker basis than network-cost-efficiency grounds; both should be tested separately.)

Coordination and accountability

How a DNO role would be coordinated with DESNZ policy, government delivery schemes and other actors, and where accountability would sit if a DNO is funded to drive uptake but uptake depends on parties it does not control. (A real risk question: a monopoly funded for an outcome it cannot deliver alone is a recipe for cost recovery without performance.)

How to respond

Deadline: 2 April 2026. The consultation opened 3 March 2026, so this is a four-week window, short for a methodology-shaping document, which itself is worth noting in any response.

Method: Email your response to Jack Wilkinson-Dix at DNOLCTPolicy@ofgem.gov.uk. Ofgem asks respondents to address each of the embedded questions as fully as possible.

Publication: Non-confidential responses will be published on Ofgem's website. Flag anything commercially sensitive explicitly.

Before drafting: Pull the consultation PDF ("DNOs' future role in supporting low carbon technologies and energy efficiency consultation", 721KB) from the Ofgem page. The numbered questions, the precise variants of the Expanded Role, and the framing of the threshold question all sit in that document and are not recoverable from the web page text. The single most useful thing a response can do is test whether Ofgem's "whether or how" is genuine or already resolved in favour of "how", and insist that any Expanded Role cost be attributed to the parties who benefit rather than socialised across the DUoS base.