Ofgem published the ED3 price control framework

Ofgem published the ED3 price control framework on 30 April 2025, according to the government's response to the National Infrastructure Commission's electricity distribution networks study¹. The framework covers the next electricity distribution price control period, ED3, which will run from 2028 to 2033¹. The government said it welcomed the approach Ofgem set out in the framework, describing it as supporting strategic network planning and investment ahead of need¹.

The government response, published on 7 July 2025, sets out its position on the NIC study "Electricity distribution networks: Creating capacity for the future", which was published on 21 Feb 2025 and contained 14 recommendations across seven themes including connections, price controls, skills and flexibility¹. The government said it agrees with all 14 recommendations, with a small number of caveats on implementation process¹. Many of the recommendations are for Ofgem or the National Energy System Operator to implement¹.

The response states that electricity demand is expected to at least double by 2050, driven by electrification of heating, transport and industrial processes¹. It also cites the NIC's finding that flexibility can reduce the amount of investment needed in the distribution network by around 15%¹. On price controls, the government said the process determines how much network companies can invest, sets an investible but not excessive rate of return, and embeds incentives for innovation¹.

"We welcome the approach Ofgem set out in its recently published ED3 Framework supporting strategic network planning and investment ahead of need, recognising the essential role of the distribution network in enabling net zero."

The response also refers to funding already allowed under the current ED2 price control, including £86m for Worst Served Customers and £149.64m¹. Ofgem is reviewing whether the Interruptions Incentive Scheme remains fit for purpose for ED3¹. The government said a full review of security of supply standards should be completed by the end of 2028, though it noted this may need a more flexible timescale than the NIC's recommended 2028 completion¹.

Why it matters for households

The distribution network is the lower-voltage part of the grid that carries electricity to homes. The framework sets the terms on which network companies will be funded to build and upgrade that network from 2028. The government's stated aim is that investment happens ahead of need rather than in response to it, so that households connecting technologies such as heat pumps and electric vehicle chargers are not held back by local network constraints¹. The response links network capacity to the government's clean power and growth goals, and to enabling new housing and industries¹.

The charges on household bills fund network investment, so the framework's decisions on allowed spending and rates of return feed through to consumer costs over time. The government said flexibility can reduce the investment needed in the distribution network by around 15%, with consequential benefits in reducing costs for electricity consumers¹. It also said expanding the distribution network is critical to building a secure energy system that can bring down bills for households and businesses for good¹. The response does not set out what the framework means for individual bill levels.

What happens next

The government response lists a sequence of steps for the transitional Regional Energy Strategic Plans and the ED3 process¹:

The government also committed to publish a Clean Flexibility Roadmap in 2025¹. The full review of security of supply standards should be completed by the end of 2028¹. The response states that the government will continue to work with Ofgem as it develops the ED3 price control, commencing in 2028, and through the Ofgem Review¹.

Sources1 cited

1. Electricity Distribution Networks Study: government response (accessible webpage) - GOV.UK, gov.uk