Our business plan
What is RIIO?
Every business needs a business plan, and we’re no exception.
The difference with National Grid ESO is that we’re a regulated business so what we are going to deliver is agreed in partnership with our regulator, Ofgem, as well as the wider energy industry.
Our business plans, also known as RIIO business plans, are long-term plans that detail the investments we’ll make, how we’ll innovate for the future and the performance outcomes upon which we’ll be measured.
This ensures that we are undertaking the right activities and projects to meet our ambitions and achieve our Mission, ultimately delivering the best value for consumers in a transparent and accountable way.
Why is it called RIIO?
RIIO is a performance-based framework created by Ofgem to determine what energy companies can charge for their services and what companies must deliver.
The need for Ofgem to be involved is down to the fact that monopoly businesses, such as the ESO, have no natural competition (like supermarkets, for example, where they must keep prices low to prevent losing customers to a cheaper supermarket).
RIIO is short for Revenue = Incentives + Innovation + Outputs
It means that the amount the ESO can earn from operating the electricity system is fixed for a certain amount of time, known as a ‘price control period’. It may not seem like a big deal, but this helps keep the energy market stable.
Working within the RIIO framework means that we are required to operate the electricity system reliably, economically, safely and always with our customers and the consumer in mind