National Grid has issued a statement following Ofgem’s publication of its Final Determination for the RIIO-T3 framework, which will apply to the company’s Electricity Transmission business from April 2026 to March 2031. The determination includes a real allowed cost of equity of 6.12 % at 60 % gearing.
The company welcomed Ofgem’s recognition of the scale of investment required across the transmission sector to maintain high levels of reliability while preparing the network to carry nearly twice as much power as today. National Grid said it will now examine the full details of the determination to understand how Ofgem has addressed the issues raised in its response to the draft proposals.
This review will focus on whether the package provides a framework that is practical to operate and capable of attracting investment. Key considerations include incentives that reward strong performance with a competitive overall return, and cost mechanisms that allow transmission owners to recover efficient expenditure while progressing essential projects at the pace expected by stakeholders.
Ofgem is expected to publish proposed licence modifications for consultation shortly. National Grid said these documents will be central to assessing the incentive structure and the wider workability of the framework. The company will continue to engage with Ofgem during this period ahead of the final licence decision scheduled for February.
Once the proposed licence changes are published, stakeholders will have 20 working days to review them. National Grid anticipates announcing its formal response in early March 2026.
Source: National Grid
