The UK’s electricity distribution networks are entering one of the most significant periods of change in their history. As electrification accelerates, renewable generation expands and demand for grid capacity increases, Distribution Network Operators (DNOs) have an opportunity to modernise infrastructure, unlock new capacity and build more resilient networks for the future.
Ofgem’s Electricity Distribution Price Control framework (ED3) is designed to support the investment and innovation needed to deliver that transformation. It also signals a clear shift towards more strategic, proactive and long-term approaches to network planning and infrastructure delivery.
For utilities, ED3 is far more than a regulatory milestone. It represents a fundamental shift towards smarter networks, stronger resilience and a faster transition to net zero.
What is ED3?
ED3 (Electricity Distribution Price Control 3) is Ofgem’s framework for regulating the UK’s electricity distribution networks from April 2028 to March 2033. The framework establishes how DNOs will be funded and the performance expectations they must meet while delivering reliable, affordable and sustainable electricity services.
The ED3 framework has been developed against a backdrop of significant change, including increasing electricity demand, the growth of distributed energy resources and the UK’s transition to a low-carbon economy. Ofgem’s objective is to ensure local electricity networks are prepared for these developments without placing unnecessary costs on consumers.
Why ED3 matters
The UK’s electricity distribution networks were not originally designed to support the scale of electrification now anticipated over the coming decades. Millions of electric vehicles, heat pumps and other low-carbon technologies are expected to connect to local networks, placing increasing demands on infrastructure and capacity.
ED3 aims to ensure network operators can respond proactively to these challenges by supporting investment that prepares networks for future demand, rather than relying solely on historical consumption patterns.
By encouraging earlier, more strategic investment in network capacity and flexibility, ED3 is intended to deliver a range of wider benefits for consumers, communities and the economy. These include:
- Faster customer connections by reducing delays for new housing developments, businesses, electric vehicle charging infrastructure and renewable energy projects seeking access to the network.
- Reduced grid constraints through anticipatory investment that helps alleviate capacity bottlenecks before they become barriers to growth and electrification.
- Greater investor confidence by providing a clearer regulatory framework that supports long-term infrastructure planning and investment decisions.
- Improved resilience against climate-related disruptions through stronger requirements around asset management, climate adaptation, cybersecurity and operational continuity.
- Support for economic growth and housing development by ensuring local electricity networks can accommodate increasing demand and enable future development plans.
In practical terms, this means utilities will need to think beyond traditional asset replacement programmes and adopt a longer-term, more strategic approach to network planning, capacity delivery and resilience. Those that can demonstrate how their investments will support future demand, customer outcomes and wider economic priorities will be better positioned to align with Ofgem’s expectations and secure support for their ED3 business plans.
“One of the biggest misconceptions about ED3 is that it’s primarily an infrastructure investment story. In reality, the real challenge is delivery. Utilities must balance network growth, resilience, sustainability and operational performance simultaneously. The organisations that succeed will be those that can connect strategy with execution, bringing together network planning, design, deployment, engineering expertise and asset management to deliver measurable outcomes.” Jonathan Sheils, Global Account Director, TXO
Why ED3 matters now
Although the ED3 price control period does not begin until April 2028, preparations are already well underway. Following the publication of Ofgem’s ED3 Business Plan Guidance in May 2026, DNOs are developing their regulatory submissions and translating strategic objectives into detailed investment plans.
The publication of Ofgem’s Sector Specific Methodology Decision (SSMD) provides greater clarity on how DNOs should plan for future electricity demand and outlines the framework against which ED3 business plans will be evaluated ahead of submission in December 2026.
Crucially, it means utilities need to make important decisions around network investment, resilience, digitalisation, asset management and sustainability strategies that will influence network development for years to come.
The four key themes of ED3
1. Proactive network investment
One of the most significant features of ED3 is Ofgem’s support for anticipatory investment.
Historically, network upgrades have often been triggered by demonstrated customer demand. Under ED3, DNOs will be encouraged to invest ahead of need where there is sufficient evidence that future electricity demand will require additional capacity.
The aim is to:
- Reduce connection delays
- Accelerate economic growth
- Support electrification
- Enable renewable energy deployment
- Avoid network bottlenecks
This represents a substantial change in thinking and reflects the urgency of the UK’s energy transition.
2. Smarter networks through digitalisation
Digital technologies will play a vital role in enabling more efficient and flexible electricity networks.
Ofgem’s ED3 framework places significant emphasis on smarter networks, while the ED3 Business Plan Guidance includes dedicated requirements covering data and digitalisation, innovation and Distribution System Operator (DSO) strategies.
Utilities are expected to make greater use of:
- Network monitoring
- Data analytics
- Automation
- Digital asset management
- Intelligent grid technologies
These capabilities will help operators improve visibility, optimise network performance and make better-informed investment decisions.
3. Greater network resilience
As electricity becomes increasingly central to daily life, network resilience is moving higher up the regulatory agenda.
ED3 places strong emphasis on resilience, with Ofgem expecting DNOs to demonstrate robust approaches to climate adaptation, reliability, asset risk management, cybersecurity and operational continuity.
The Business Plan Guidance includes specific requirements relating to:
- Climate Resilience Strategies
- Reliability Strategies
- Asset Risk and Resilience
- Cyber Resilience Business Plans
- IT and Telecommunications Strategies
These requirements reflect the growing importance of maintaining reliable electricity services in an increasingly complex operating environment.
4. Supporting net zero
The ED3 framework is closely aligned with the UK’s decarbonisation objectives and its commitment to achieve net zero greenhouse gas emissions by 2050.
Distribution networks are expected to play a central role in connecting renewable generation, supporting low-carbon technologies and enabling the wider electrification of transport, heating and industry.
Ofgem has made clear that local distribution networks must be ready to facilitate these changes while continuing to provide secure and affordable energy services.
What will utilities need to include in their ED3 business plans?
Ofgem’s ED3 Business Plan Guidance provides a clear indication of the areas DNOs will need to address, including:
- Long-term network planning
- Network asset management
- Climate and operational resilience
- Data and digitalisation
- Environmental and sustainability commitments
Beyond setting out investment requirements, business plans must demonstrate how network operators will deliver value for consumers, improve resilience and support future energy needs.
What should utilities be doing now?
With final business plans due in December 2026, utilities should be reviewing whether current strategies align with the priorities emerging from both the ED3 Framework Decision and the Business Plan Guidance.
Key activities include:
- Gap analysis against ED3 requirements
- Prioritising investment cases
- Improving data maturity and asset visibility
- Strengthening stakeholder engagement
- Building evidence for consumer value
- Developing delivery and resource plans
- Building strategic partnerships to strengthen supply chain resilience, maximise asset value and support ED3 objectives
As ED3 planning progresses, the focus will increasingly shift from strategy development to delivery readiness. Utilities should be assessing whether they have the asset visibility, supply chain resilience, data capabilities and delivery partnerships required to translate business plan commitments into measurable outcomes.
“No utility can deliver the ambitions of ED3 in isolation. The scale of network transformation required means operators will need access to specialist expertise, resilient supply chains and trusted delivery partners. The organisations that build the strongest ecosystems around their networks will be best placed to respond to changing demand, accelerate deployment and deliver long-term value.”Jonathan Sheils, Global Account Director, TXO
Preparing electricity networks for the ED3 era
TXO is a trusted partner to utilities navigating the demands of ED3, providing the expertise, services and solutions needed to build smarter, more resilient and sustainable networks. Through technology lifecycle management, supply chain resilience, asset recovery and circular economy solutions, we enable operators to maximise asset value, strengthen network performance and deliver against the sustainability and resilience objectives at the heart of ED3.