We are a natural monopoly and are therefore regulated by the energy regulator, Ofgem. Our regulatory framework is known as RIIO, and under this framework, Ofgem tells us what we can charge our customers for using our network for the next regulatory period. The current regulatory period is known as RIIO-T1 (Transmission 1) and runs from 2013-2021.
Ofgem expects us to efficiently deliver outputs for the revenues they allow us, and our current outputs were set by a stakeholder consultation process at the start of RIIO-T1. A summary of our performance against these outputs can be found below.
During the first half of RIIO-T1, we had allowances of £6.2 billion to deliver our outputs, including £2.1 billion connecting customers to the transmission system. We have delivered these outputs and saved £1.3 billion in the process, by working more efficiently, more productively and using our asset management expertise to deliver projects. We share these savings with consumers, meaning that over £600 million will not be passed on to household consumers’ bills.
You can find our Transmission performance for the fifth year under RIIO-T1 by following this link. We produce this report annually so that we
can explain how we have performed to our customers, stakeholders and end consumers. Under the RIIO-T1 contract our performance is assessed against five main outputs: reliability and availability; environment; customer satisfaction; customer connections; and, most importantly, safety. We hope that you find it useful and we welcome your feedback on how we can improve our report in the future.
Safety: providing a safe energy network
We were all reminded of the importance of safety following a tragic incident in 2016 in which one of our employees lost his life. There are always things to do to improve in this area and we keep working hard to do so. Our overall safety performance remains strong, keeping our staff, contractors and the public safe whilst running a high voltage network. Our Injury Frequency Rate (the number of injuries per 100,000 hours worked) has remained low throughout the period.
Reliability: delivering long-term reliability, minimising the number and duration of interruptions
*1 megawatt hour (MWh) is roughly equivalent to the amount of energy used by 200 UK homes in a year.
Throughout RIIO-T1, we have maintained incredibly high levels of reliability from our network, meaning that with only a few exceptions, electricity is available whenever people need it. We are on target to meet our Network Output Measures for T1, which measure whether we are maintaining reliability by managing risk associated with our network.
Environmental impact: playing our role in achieving broader environmental objectives
Our overall business carbon footprint has fallen since the beginning of the RIIO-T1 period. This is mainly as a result of a reduction in emissions from line losses (which are calculated by multiplying the energy lost by the average grid carbon intensity). The carbon intensity of our network has fallen due to increased renewable generation, which has helped reduce the emissions from line losses.
Within our overall carbon footprint, we are measured against the amount of sulphur hexafluoride (SF6) that leaks from our assets. This is a gas with excellent insulating properties, but which is much more damaging to the environment than CO2. Our leakage levels have been less than our target for each year of RIIO-T1.
Customer and Stakeholder Satisfaction: maintaining high levels of customer satisfaction and stakeholder engagement
We are measured through annual satisfaction surveys and via a stakeholder engagement incentive. Our satisfaction scores have exceeded Ofgem’s targets for each year of RIIO-T1 and our stakeholder engagement score has increased every year.
Customer Connections: connecting customers quickly and efficiently
We have worked hard with our customers to improve our connections process, and have reduced the time it takes to offer the customer a connection agreement from the 90 days required by our licence, to 60 days on average during the past 12 months (and just a week in some of the more straightforward cases). We are forecasting to connect around 11 gigawatts of new generation during RIIO-T1.
You can find more details on our performance in our annual stakeholder report.