Changes to RIIO-ED2 Load Related Expenditure volume drivers
Summary
Ofgem consults on changes to RIIO-ED2 Load Related Expenditure (LRE) volume drivers: upward revision of Low Voltage Services Volume Driver unit rates, higher LVSVD ex-ante allowance for all DNOs, revision to the Secondary Reinforcement Volume Driver cap for one DNO, and reporting metric changes.
Why it matters
Volume drivers are the formula by which DNO allowed revenue scales with actual load-related work delivered. Raising unit rates and ex-ante allowances moves money in DNOs' favour without expanding the headline price control. These are mid-period adjustments to the funding mechanism in response to higher-than-expected connection-related work. Watch whether the upward revision is calibrated to actual cost increases or sweeps in margin.
Areas affected
Related programmes
Memo
Changes to RIIO-ED2 Load Related Expenditure volume drivers | 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: Changes to RIIO-ED2 Load Related Expenditure volume drivers Publication type: Consultation Publication date: 27 February 2026 Closing date: 27 March 2026 Status: Open Topic: Electricity distribution, Energy network price controls Subtopic: Electricity distribution price control 2023 to 2028 (RIIO-ED2) Get emails about this page Print this page Share the page Share on Facebook Share on Twitter Share on LinkedIn We are consulting on proposed changes to the Load Related Expenditure (LRE) volume drivers. Consultation description The changes consist of: an upward revision to the Low Voltage Services Volume Driver (LVSVD) unit rates a higher LVSVD ex-ante allowance for all distribution network operators (DNOs) a revision to the Secondary Reinforcement Volume Driver (SRVD) cap for one DNO changes to the reporting metrics for the volume drivers The current price control model is known as RIIO (Revenue = Incentives + Innovation + Outputs). RIIO-2 is the second electricity and gas price control under the RIIO model. The RIIO-2 price control period runs from 1 April 2021 until 31 March 2026 for electricity transmission (ET), gas transmission (GT) and gas distribution (GD). The RIIO-2 price control period for the electricity distribution (ED) sector (RIIO-ED2) runs from 1 April 2023 to 31 March 2028. In November 2022 we published our RIIO-ED2 final determinations for the electricity distribution network operators. This set out the key elements of the price control from 1 April 2023 to 31 March 2028. This included an uncertainty mechanism, a Low Voltage Services Volume Driver (LVSVD) and Secondary Reinforcement Volume Driver (SRVD) for Load Related Expenditure (LRE), collectively referred to as the LRE Volume Drivers. These arrangements are given effect in the electricity distribution licence. Following a review of the first two years of operation, the consultation sets out proposed changes to the LRE Volume Drivers that we have identified as part of this work that would apply for years 4 and 5 of RIIO-ED2. Who should respond The consultation will be of interest in particular to distribution network operators. How to respond You can submit your response by Friday 27 March 2026 by emailing RIIOED2@ofgem.gov.uk Consultation documents RIIO-ED2 Load Related Expenditure volume drivers consultation [PDF, 917.36KB] CEPA Review of Unit Costs for LV Service Volume Drivers [PDF, 862.42KB] Get emails about this page Print this page Share the page Share on Facebook Share on Twitter Share on LinkedIn Close Notify me Would you like to be kept up to date with Changes to RIIO-ED2 Load Related Expenditure volume drivers ? subscribe to notifications: Email Submit Close