B2.4.2 RPI-X@20 Review and RIIO
This will not be in the exam. It is included as wider information.
In March 2008 the RPI-X@20 review was announced. This was a two year project to review the workings of the current approach to regulating Great Britain’s energy networks and develop future policy recommendations. The recommendations of the review were be reported to the Ofgem Authority at the end of 2010.
The approach over the last 20 years has been to increase capacity, investment and the reliability of the network. However, the development of technologies to tackle climate change may impact upon the transmission and distribution network requirements.
The purpose of the review is to examine:
- The aims and objectives of the review, and the rationale for conducting it.
- The way in which it is intended to carry out the review.
- The key issues and questions that need to be addressed by the review.
Ofgem have published the results, which are available here if they are of interest to you:
http://www.ofgem.gov.uk/Networks/rpix20/Pages/RPIX20.aspx
As a result of the RPI-X@20 Review, a new regulatory framework, known as the RIIO model will be implemented.
RIIO stands for revenue = incentives + innovation + outputs.
The RIIO model has been designed to promote smarter gas and electricity networks for a low carbon future.
The RIIO model will first be applied in the transmission (RIIO-T1) and gas distribution (RIIO-GD2) price control reviews was implemented in April 2013.