Transmission Regulation: Ofgem Decisions and Early Competition Consultation (December 2024)

This batch covers the regulatory plumbing of Great Britain's gas and electricity transmission networks. Four decisions resolve specific applications or claims under existing price control frameworks — mostly National Gas Transmission (NGT) matters under the RIIO-GT2 (Revenue using Incentives to deliver Innovation and Outputs, Gas Transmission 2) price control. The fifth item is a consultation on introducing competitive tendering for onshore electricity transmission — a structural reform that has been in development since 2021.

These documents landed within a three-day window but are not connected to each other. They reflect the normal pace of Ofgem's regulatory casework rather than a coordinated policy push. The gas transmission decisions close out applications that had been working through Ofgem's assessment process for months. The early competition consultation moves forward a long-running workstream on whether new onshore transmission infrastructure should be built by incumbents or opened to competitive tenders.

Decisions — Gas Transmission (National Gas Transmission)


• Asset health Re-opener Applications (January and June 2023) — Ofgem's determination on NGT's requests to unlock additional funding within RIIO-GT2 for asset health work. Re-openers allow network companies to access money not included in their baseline allowance when conditions change.

• Direction for the SOPRPt value for NGT 2023-2024 — Sets the System Operator Performance Regime Price term, a technical parameter within the gas system operator's incentive framework that affects how NGT is rewarded or penalised for operational performance.

• Exit capacity substitution and baseline revision at Millbrook Power Station — Decision on NGT's proposal to adjust exit capacity rights at a specific gas-fired power station, reflecting changes in how the gas network serves individual connection points.

Decisions — Offshore Electricity Transmission


• Diamond Transmission Partners Hornsea One Limited — exceptional event claim — Ruling on whether the Offshore Transmission Owner (OFTO) for the Hornsea One wind farm can recover costs from an event outside normal operations. OFTOs hold 25-year licences and their revenue is set at tender; exceptional event claims are the mechanism for costs that fall outside that settlement.

Consultations — Onshore Electricity Transmission


• Onshore electricity transmission early competition: first project — Consultation on identifying the first onshore transmission project to be delivered through competitive tendering rather than automatic assignment to the incumbent Transmission Owner. This is the practical test case for a model Ofgem has been designing since the early 2020s. If it works, it could reshape how major grid reinforcement is procured.