As the UK energy sector undergoes rapid technological transformation, the tools and frameworks used by policymakers and regulators in the sector are also evolving.
Ofgem’s RIIO2 network price control reviews are under way, with a framework decision published at the end of July and sector-specific methodology consultations due to be published by December. In an article for Utility Week, Oxera energy expert Sahar Shamsi looks at the challenges that Ofgem faces in striking a balance between incentivising investment and ensuring long-term value for customers.
Sahar commented on Ofgem’s objective for RIIO2 to ensure that regulated networks deliver the ‘value for money services that both existing and future consumers want’. Affordability is a notable part of this objective, as is the development of flexible networks that adapt to the needs of consumers. Sahar went on to stress the importance that the evolution of the RIIO framework continues to facilitate the changes afoot throughout the UK energy sector.