Additional NIA RIIO-ED2 funding: licence modifications

Additional NIA RIIO-ED2 funding: licence modifications | Ofgem Please enable JavaScript in your web browser to get the best experience. BETA This site is currently in BETA. Help us improve by giving us your feedback . Close alert: Additional NIA RIIO-ED2 funding: licence modifications Publication type: Consultation Publication date: 4 December 2025 Last updated: 29 January 2026 Closed date: 6 January 2026 Status: Closed (with decision) Topic: Electricity distribution, Innovation Show all updates Print this page Related links RIIO-ED2 Final Determinations Consultation on additional Networks Innovation Allowance funding Share the page Share on Facebook Share on Twitter Share on LinkedIn We are consulting on proposed licence changes to facilitate the award of additional Network Innovation Allowance funding to Distribution Network Operators for the final two years of RIIO-ED2. Details of outcome We received four responses all in support of our proposed modifications to Special Condition 5.2 of the Electricity Distribution Licence. As a result, we will be implementing these proposed changes, which will come into effect on 27 March 2026. Distribution Network Operators (DNOs) will, therefore, have access to Network Innovation Allowance (NIA) funds awarded for the final two years of RIIO-ED2 as decided upon in our October 2025 decision. Read the full outcome Decision: additional NIA RIIO-ED2 funding licence modifications [PDF, 126.31KB] Decision notice: proposed licence modifications to the special licence conditions of electricity distribution licence holders for additional NIA RIIO-ED2 funding [PDF, 154.76KB] Consultation responses: additional NIA RIIO-ED2 funding licence modifications [ZIP, 1.17MB] Original consultation Consultation description We launched a consultation in March 2025 regarding our proposal to provide additional funding through the Network Innovation Allowance (NIA) for the final two years of RIIO-ED2. In August we decided to carry out a detailed assessment of companies’ justifications for receiving further allowance before providing additional NIA funding to Distribution Network Operators. This assessment informed our October decision on the amounts of additional NIA funding each DNO would receive. As amendments to Special Condition 5.2 of the Electricity Distribution Licence will be needed to facilitate these additional allowances, this statutory consultation has been launched in time for proposed modifications to take place by 31 March 2026. It will run for 32 days and will take effect 56 days after our final decision. Who should respond We welcome responses from: Distribution Network Operators anyone with an interest in innovation funding in the energy sector Note: the amended licence special condition documents attached below are not fully accessible. If you require an alternative format, please contact networks.innovation@ofgem.gov.uk . Consultation documents Additional NIA RIIO-ED2 Funding Licence Modifications [PDF, 160.25KB] Annex A: Additional NIA RIIO-ED2 Funding Notice of proposed licence modifications to the special licence conditions of electricity distribution licence holders [PDF, 102.23KB] Annex-B: Eastern Power Networks plc Special Conditions proposed tracked changes [PDF, 1.80MB] Annex C: Electricity North West Ltd Special Conditions proposed tracked changes [PDF, 1.77MB] Annex D: London Power Networks plc Special Conditions proposed tracked changes [PDF, 1.74MB] Annex E: National Grid Electricity Distribution (East Midlands) plc Special Conditions proposed tracked changes [PDF, 1.75MB] Annex F: National Grid Electricity Distribution (South Wales) plc Special Conditions proposed tracked changes [PDF, 1.75MB] Annex G: National Grid Electricity Distribution (South West) plc Special Conditions proposed tracked changes [PDF, 1.75MB] Annex H: National Grid Electricity Distribution (West Midlands) plc Special Conditions proposed tracked changes [PDF, 1.74MB] Annex I: Northern Powergrid (Northeast) plc Special Conditions proposed tracked changes [PDF, 1.73MB] Annex J: Northern Powergrid (Yorkshire) plc Special Conditions proposed tracked changes [PDF, 1.73MB] Annex K: Scottish Hydro Electric Power Distribution plc Special Conditions proposed tracked changes [PDF, 1.79MB] Annex L: South Eastern Power Networks plc Special Conditions proposed tracked changes [PDF, 1.78MB] Annex M: Southern Electric Power Distribution plc Special Conditions proposed tracked changes [PDF, 1.72MB] Annex N: SP Distribution plc Special Conditions proposed tracked changes [PDF, 1.73MB] Annex O: SP Manweb plc Special Conditions proposed tracked changes [PDF, 1.72MB] Print this page Related links RIIO-ED2 Final Determinations Consultation on additional Networks Innovation Allowance funding Share the page Share on Facebook Share on Twitter Share on LinkedIn All updates 29 January 2026 added decision document, decision notice and consultation responses. Close