Energy Systems Catapult welcomes the opportunity to respond to Ofgem’s consultation on the sector specific methodologies for the RIIO-3 price controls of electricity transmission networks, and of gas distribution and transmission networks.

The Catapult was set up to accelerate energy innovation towards Net Zero, and in doing so enable that UK businesses and consumers to capture the opportunities of clean growth. The Catapult is an independent, not-for-profit centre of excellence that bridges the gap between industry, Government, academia, and research. We take a whole systems view of the energy sector, including in policy design and implementation, helping us to identify and address innovation priorities and market barriers, to decarbonise the energy system at the lowest cost.

Key points:

• Decisions in RIIO-3 must take a whole systems perspective – accounting for interactions not only between electricity and gas, but also between regulated energy networks and other parts of the system such as markets.
• With that in mind, innovation funding under RIIO-3 should be opened up to projects led by energy networks that are regulated by Ofgem outside the RIIO framework, such as heat networks and CO2 networks.
• We support Ofgem’s proposal to introduce a ‘Strategic Innovation Fund Accelerator’, which we see as helping SMEs bring forward high-quality innovations that are more likely to be adopted as ‘business as usual’ by the network companies.
• We encourage Ofgem to go further than it has proposed regarding the modernisation of reporting by the network companies, by treating such data as “presumed open”.