This month (April 2026), the UK electricity network entered a new regulatory phase known as RIIO‑3. While the framework itself might feel distant from day-to-day business operations, its effects will be felt far more widely. For organisations that rely on electricity or are looking to begin electrification, RIIO‑3 will shape what is possible, how quickly projects move and how much businesses pay to use the network.
What is RIIO‑3?
RIIO stands for Revenue, Incentives, Innovation and Outputs. It is the price control framework used by Ofgem to regulate the monopoly electricity and gas networks across Great Britain.
Under RIIO, Ofgem sets the amount of revenue network companies are allowed to recover over a fixed period. In return, those companies are expected to invest in infrastructure and support the transition to a low‑carbon energy system. Any overspend or underspend is split between networks and consumers through network charges on energy bills.
RIIO‑3 replaces the current RIIO‑2 framework and will run from April 2026 to March 2031 for electricity transmission. Over £24 billion of upfront investment has already been approved, with a wider pipeline expected to reach around £90 billion by 2031 across several major projects.
This investment will not be obvious, but it influences capacity availability, connection timelines and non‑commodity costs that affect electricity bills.
Why RIIO‑3 matters to businesses
Electricity demand is rising rapidly. Electrification of transport, heating and industrial processes is accelerating, while renewable generation continues to scale. The network needs reinforcement to cope, and RIIO‑3 is designed to fund that work more strategically.
That matters to businesses for four main reasons.
Grid capacity and availability
In many parts of the UK, a lack of available grid capacity has slowed or blocked commercial projects. New sites, large loads, on‑site generation and other plans have often faced lengthy delays.
RIIO‑3 investment is intended to strengthen the transmission system and reduce constraints, particularly in areas experiencing rising electricity demand. Over time, this should improve capacity availability and help projects continue efficiently.
For businesses with growth plans, network availability is becoming a commercial risk that needs to be assessed early.
Network charges and bill impacts
All network investment is recovered through transmission and distribution charges. These sit alongside wholesale costs and supplier charges within electricity bills, and they are increasingly significant. Learn more about non-commodity costs.
As RIIO‑3 investment is delivered, businesses may see how non‑energy costs evolve within their bills. This does not mean immediate or uniform increases, but it does mean that understanding the structure of charges is becoming just as important as negotiating headline unit rates.
Businesses that track energy costs at a surface level often miss this entirely.
Electrification projects
Many organisations are already exploring electrification across fleet vehicles, heating systems and industrial processes. These transitions depend on network and connection capacity.
RIIO‑3 plays an important enabling role here. The framework is designed to ensure the electricity system grows in step with demand. That creates opportunity, but only for businesses that factor infrastructure realities into their planning.
Connections and timelines
Grid connection delays have become one of the biggest barriers facing energy-intensive and expanding businesses. Under RIIO‑3, Ofgem is placing increasing pressure on network operators to improve connection processes and planning management.
This should lead to better information and more realistic delivery timelines, but businesses still need to engage early, understand the regulatory landscape and build contingency into project plans.
What is changing under RIIO‑3?
Several themes sit at the heart of the new framework.
The first is earlier and more proactive investment. RIIO 3 encourages network operators to invest in capacity earlier, rather than waiting for demand to reach breaking point. This approach is designed to relieve bottlenecks and shorten prolonged connection times.
The second is a stronger focus on flexibility. Networks are increasingly expected to balance supply and demand through flexibility services alongside physical infrastructure. Businesses that can shift consumption, respond to signals, or export power may find new commercial opportunities as flexibility grows.
The third key focus of RIIO 3 is improved support for renewable energy generation. Significant volumes of wind and solar continue to come online, and transmission infrastructure needs to develop in tandem to accommodate them. The framework aims to ensure this growth can be managed without undermining network reliability, which remains critical for businesses that depend on consistent power. For organisations considering on‑site generation or renewable projects, this is an area where informed planning and expert delivery make a meaningful difference. See how Procure Smart can support your renewable projects.
How Procure Smart helps businesses navigate RIIO‑3
Regulatory change does not need to be a complication. With the right support, it becomes another lever for smarter decision-making. Even for organisations without major projects, understanding how network costs sit within energy bills is becoming increasingly important. Procurement decisions, contract structures and consumption profiles all interact with network charging in ways that are easy to overlook.
At Procure Smart, we help businesses see the full picture behind their energy costs and future options. Our role is to educate first, simplify next and act quickly when the right opportunity presents itself. Whether you are managing risk today or planning projects for tomorrow, understanding frameworks like RIIO‑3 puts you in a stronger position.
If your business is planning growth, electrification or simply wants greater control over its energy strategy, we are here to help. Speak to Procure Smart for clear, practical guidance on what RIIO‑3 means for you and how to move forward with confidence.
