Clarity and direction is one thing, but not at the cost of innovation- EUA respond to RIIO-2

3rd May 2018


The Energy and Utilities Alliance (EUA) published its response to the RIIO-2 Framework Consultation, following a two-day industry workshop which gathered views from across the supply chain.

EUA supports the proposals laid out by Ofgem to strengthen the role of stakeholders in the RIIO process. However, EUA is concerned that the proposed move away from direct innovation funding will reverse the good work being done

Mike Foster, Chief Executive of the Energy and Utilities Alliance, said:

“The idea of consumer boards, responsible for scrutinising business plans, provides an opportunity for the public to become more aware of the work the networks are undertaking. This scrutiny and transparency can only benefit the industry, as will the move to a 5 year review period, which will provide certainty, and the ability to plan for the long term. EUA welcome this clarity, but it cannot be at the cost of innovation.

Before RIIO, the innovation spend was at a minimum, – any reduction, or scrappage of such funds, would be ill-advised, and hamper our ability to meet the fast-approaching carbon budgets. Ofgem must encourage the networks to invest in innovative projects.


EUA members have told us that the removal of the innovation stimulus or a focus purely on future decarbonisation projects would put a large number of skilled jobs at risk. These companies are predominantly SME’s. The funding offers a route to develop products, secure jobs and maintain these businesses.”


He added:


“This consultation and the subsequent next phase of RIIO provides Ofgem with a chance to determine the future of the network, and we call on them to remember that the gas network is key to the UK’s future energy mix; a vital tool in tackling the energy trilemma.”


You can read the consultation response in full here.