Our RIIO-2 Business Plan

Our draft RIIO-2 Business Plan 3 for the period April 2025 to March 2026 (BP3) marks a significant milestone, as it is our first business plan as NESO and the final plan for the RIIO-2 period. This business plan is intended to look and feel different to our previous business plans. We have been working closely with Ofgem, the energy regulator, on reforming our regulatory framework. The changes in this plan reflect that we have become an independent, public corporation at the centre of the energy system, taking a whole system view to create a world where everyone has access to reliable, clean and affordable energy.

It is our job to transform the whole energy system to meet these challenges and transition to a low-carbon future, embracing new technologies and cleaner generation sources, with the cost to the consumer always in mind.

Our business plan identifies eight performance objectives that ensure we deliver value for consumers and fulfil our purpose and vision. These objectives serve as guiding principles for our expanded roles and responsibilities as we move towards clean power by 2030 and aim for net zero emissions by 2050.

BP3 proposes our delivery focus for the period April 2025 to March 2026. It will not cover all that we do. We remain committed to delivering existing commitments from BP2 (those not completed or continuous activities) and our licence obligations.

We have engaged with our Independent Stakeholder Group (ISG) throughout the development of BP3. 

• Final Business Plan 3
• Annex A: BP3 Cost Narrative
• Annex B: Data, Digital and Technology
• Annex C: Enabling Functions
• Annex D: Stakeholder
• Consultation Responses

In early Spring 2022, we published our final second Business Plan (BP2) for the RIIO-2 period: ‘Accelerating the transition to a flexible, low carbon energy system’. BP2 sets out our goals for years three and four of RIIO-2 (2023-2025) as we respond to the rapidly changing external environment. The plan includes five new activities and 16 new sub-activities to accelerate the transition to net zero.

Our mission is to drive the transformation to a fully decarbonised electricity system by 2035, which is reliable, affordable and fair for all. We believe that the activities outlined in our plan support this mission and deliver value for customers and consumers, delivering net benefits of around £2.8 billion.

At the end of November 2022, Ofgem released their BP2 Draft Determinations giving their initial view of, and position on, our business plan.

As Ofgem published their BP2 Draft Determinations, they also launched an accompanying consultation, which we have responded to. You can find the Executive Summary, our full consultation response and the supplementary information annex, which we submitted alongside our response in the links below:

• View Ofgem’s Draft Determinations outcomes
• View our consultation response - cover letter
• View our consultation response – Executive Summary
• View our consultation response – full response
• View our supplementary information annex

As a result of Ofgem’s feedback, we have also updated our Delivery Schedule – the latest version can be found further down this page.

We have engaged with what was formerly the ERSG (our independent stakeholder group) throughout the development of our BP2. You can read their report on our final plan. 

RIIO-2 runs from April 2021 onwards and sets out price controls to determine the amount we can earn for the projects we deliver and the services we provide. It is the second price control under Ofgem's RIIO performance model. This price control makes sure that we are delivering for consumers. RIIO stands for Revenue = Incentives + Innovation + Outputs.

It is our first price control period as a legally separate entity and covers our plans for a five-year period - 2021 to 2026. It provides an exciting opportunity for us to demonstrate how we can be more transparent, agile and innovative to enable the transition to a sustainable energy future.

The five-year period is designed with two-year planning cycles, recognising that the energy sector is experiencing an unprecedented level of change and that our plans need to remain flexible and agile in the face of substantial uncertainty.