A question of timing. ED3 business plan development and delivery of Regional Energy Strategic Plans (RESPs)

Ofgem has set out the purpose of RESPs to inform the investment plans put forward by electricity network companies (the DNOs) for the next price control (RIIO-ED3). Ofgem anticipates that RESPs will be responsible for developing a regional whole system strategic plan that is coherent with national and local net zero ambitions and energy security priorities, and that supports achieving the most cost-effective decarbonisation outcomes derived and informing, the individual plans of local actors [1].  

If they are to fulfil this purpose effectively, RESPs must be available in good time to have a meaningful chance of influencing business planning processes. The alignment of timelines will be first tested in the run-up to RIIO-ED3 submissions, meaning that DNOs will be the first organisations asked to build on RESPs (Ofgem envisages that RESPs will ‘inform’ DNO network development plans). Ofgem is currently targeting mid/late 2025 for the implementation of the RESP framework and anticipates the first RESPs will be available by early 2026. Critically, as all DNOs need to engage in the development with more than one RESP (RESP areas are not aligned to DNO network footprints), what matters is the pace at which the slowest RESP moves forward.  

It is too early to say whether these timelines are realistic, however, we can consider several scenarios to test how the implementation of the RESP framework may deliver value for network planning ahead of RIIO-ED3: 

Scenario 1: All RESPs deliver in Q1 2026 – this would be helpful and would leave the DNOs in a better place than their transmission and gas counterparts as there would be clarity on planning assumptions – critical planning inputs for the RIIO-3 transmission and gas distribution business plans have only become available over summer 2024).  

Scenario 2: All RESPs deliver in Q2 2026 – this should still provide sufficient notice for DNOs to be able to meaningfully reflect RESP outputs in their RIIO-ED3 business plans. We expect leading DNOs will have prepared themselves through participation and effective engagement in RESP working groups and by drawing insights throughout the development process of ‘their’ RESPs. 

Scenario 3: One or more RESPs deliver in Q3 2026 – likely to be too late for meaningful inclusion in DNO business planning process. However, DNOs should be in a position to identify and communicate possible divergences between their business plans and those set out by the delayed RESPs. 

Scenario 4: One or more RESPs deliver in Q4 2026 – the train has already left the station! Late delivery of RESPs would mean they are effectively redundant for ED3 business plan submissions as DNOs will not be able to reflect these in their investment plans. 

Irrespective of the RESP delivery date scenario, we think the most important issue for a DNO is that it has ALL RESPs which interact with its network footprint available at the same time. If some plans are published, and others are delayed, it will be very difficult for a DNO to justify network investments to Ofgem. Similarly, it will be challenging for Ofgem to be even-handed in its assessment and scrutiny of investment plans across DNOs if some are putting forward business plans based on incomplete information. 

[1] Regional Energy Strategic Plan policy framework consultation (ofgem.gov.uk)