Incentive-Based Regulation (RIIO Model)—Great Britain

Incentive-Based Regulation (RIIO Model)—Great Britain

Introduction to Great Britain's Incentive-Based Regulation for Transmission and Distribution in the Gas and Electricity Market

RELEASE DATE
30-Dec-2015
REGION
Asia Pacific
Research Code: 9AAE-00-33-00-00
SKU: EG00071-AP-MR_00566
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Description

The Office of Gas and Electricity Market (Ofgem) has implemented RIIO (setting Revenue using Incentives to deliver Innovations and Outputs) for the incentive-based regulation (IBR) covering the gas and electricity transmission and distribution network in Great Britain (England, Wales, and Scotland). The RIIO model puts the customer in the middle of the decision-making matrix. Targets are set on primary outputs covering customer satisfaction, safety, reliability, environmental connections, and social obligations. A second-level set of secondary outputs are subsequently incorporated in a detailed business plan to meet the primary output targets. The IBR period (price control period) is set for 8 years, which aligns with asset investment decisions better than the 5-year period. Wider industry participation is supported using innovation funds controlled by Ofgem.

Table of Contents

Executive Summary

Great Britain (GB) vs. the United Kingdom (UK)

Office of Gas and Electricity Markets

Standing of Ofgem in Europe

Recent News from Ofgem

Electricity Market Structure—Comparison

UK Generation Mix (2014)

Great Britain—Transmission Operators (TOs) and System Operator (SO)

Great Britain—Distribution Network Operators (DNOs)

RIIO Model

RIIO Highlights

RIIO Stages

Outputs and Price Control Methodology—Principle (Electricity)

Outputs and Price Control Methodology—Primary Output

Cost Benefit vs. Price Control Periods

Outputs and Price Control Methodology—Revenue

Outputs and Price Control Methodology—Revenue (continued)

Outputs and Price Control Methodology—Revenue (continued)

Outputs and Price Control Methodology—Revenue (continued)

Outputs and Price Control Methodology—Revenue (continued)

RIIO—Innovation Framework

NGET—RIIO Timeline

Network Performance—Electricity Transmission Under RIIO

News Roundup

Network Operator Viewpoint—Reference from SSE

National Grid Electricity Transmission (NGET)—Primary Deliverable

NGET—Output Total Cost Share

NGET—Reliability and Availability

NGET—Reliability and Availability (continued)

NGET—Reliability and Availability (continued)

NGET—Innovation

Legal Disclaimer

Retail (End Prices) for Households (2013)

The Frost & Sullivan Story

Value Proposition: Future of Your Company & Career

Global Perspective

Industry Convergence

360º Research Perspective

Implementation Excellence

Our Blue Ocean Strategy

Related Research
The Office of Gas and Electricity Market (Ofgem) has implemented RIIO (setting Revenue using Incentives to deliver Innovations and Outputs) for the incentive-based regulation (IBR) covering the gas and electricity transmission and distribution network in Great Britain (England, Wales, and Scotland). The RIIO model puts the customer in the middle of the decision-making matrix. Targets are set on primary outputs covering customer satisfaction, safety, reliability, environmental connections, and social obligations. A second-level set of secondary outputs are subsequently incorporated in a detailed business plan to meet the primary output targets. The IBR period (price control period) is set for 8 years, which aligns with asset investment decisions better than the 5-year period. Wider industry participation is supported using innovation funds controlled by Ofgem.
More Information
No Index No
Podcast No
Author Abhishek Kumar
Industries Energy
WIP Number 9AAE-00-33-00-00
Keyword 1 Office of Gas and Electricity (Ofgem)
Keyword 2 RIIO Model
Keyword 3 Incentive-Based Regulation (IBR)
Is Prebook No