Revenue = Incentives + Innovation + Outputs (RIIO) Price Control: Annual Reporting and Volume Driver Updates

RIIO is Ofgem's framework for setting the revenues that network companies — the monopoly owners of electricity wires and gas pipes — are allowed to recover from consumers. Each price control runs for five years. RIIO-ED2 covers electricity distribution (2023–2028) and RIIO-T2/GD2 cover transmission and gas distribution (2021–2026).

Two routine mechanisms keep the price controls functioning between major reviews. Regulatory Instructions and Guidance (RIGs) define exactly what data network companies must report to Ofgem each year — the templates, definitions, and methodologies. Volume drivers automatically adjust allowed revenue when actual demand exceeds or falls below forecast, so companies are funded for the connections and reinforcement work they actually face.

This is annual housekeeping. Each year Ofgem updates the RIGs to reflect new reporting requirements, correct errors, and align definitions with evolving policy. The volume driver consultation addresses whether the triggers for additional load-related expenditure in ED2 need recalibrating — relevant because electricity distribution networks are seeing connection volumes that differ significantly from the forecasts set in 2022.

All five are statutory consultations, meaning Ofgem must publish them and invite responses before making changes. None proposes structural reform. The practical impact is on network company regulatory teams who must prepare annual submissions using these templates.

Volume driver update


• Changes to RIIO-ED2 Load Related Expenditure volume drivers — Reviews whether the automatic funding triggers for demand-driven network reinforcement need adjusting mid-period. Relevant to the pace of electrification (heat pumps, EV chargers) hitting local networks.

RIGs modifications (Year 5 — final year of RIIO-T2/GD2)


• RIGs RIIO-2 Year 5 for electricity transmission — Updates reporting templates for National Grid Electricity Transmission and other transmission owners entering the final year of T2.

• RIGs RIIO-2 Year 5 for gas distribution — Updates reporting templates for the gas distribution networks (Cadent, SGN, NGN, WWU) in their final T2 year.

• RIGs RIIO-2 Year 5 for gas transmission — Updates reporting templates for National Gas Transmission's final T2 year.

RIGs modifications (Year 3 — mid-period for RIIO-ED2)


• RIGs RIIO-2 Year 3 for electricity distribution — Updates reporting templates for the electricity distribution network operators mid-way through ED2.