National Grid seeks £4.5bn above RIIO-T3 baseline in Ofgem re-opener

The proposals, filed through Ofgem's re-opener process, sit on top of the RIIO-T3 agreement that established National Grid's baseline transmission funding for the current regulatory period. Re-openers allow network operators to claim additional capital when system demands materially exceed the assumptions baked into the original price control settlement. At £4.5 billion, this is a significant addition to an already large programme.

The 25 submissions span transmission reinforcements, new connections for low-carbon generation, heavy industrial demand growth, and resilience works. The underlying driver is connection pressure: renewables developers, large industrial users, and data centre operators are all queuing for grid access, and insufficient network capacity has become one of the more visible bottlenecks to Britain's clean energy build-out. National Grid frames the package as part of its broader £70 billion, five-year network investment plan across its UK and US operations.

What this means for UK commercial energy buyers

Transmission investment does not sit in the commodity price. It flows through network charges, principally Transmission Network Use of System (TNUoS) charges, which are socialised across demand customers and reviewed annually by Ofgem. If the regulator approves a material share of these proposals, upward pressure on TNUoS is the likely consequence for the 2026-27 and subsequent charge years. Buyers on fully fixed contracts are insulated for the duration of their term; those on flexible or pass-through arrangements will see adjustments as charge years reset.

UK baseload day-ahead power over the last 12 months provides the wholesale backdrop against which these non-commodity network costs will be layered.

Key points to hold in view:

• TNUoS demand charges, currently the largest single network cost component for many industrial and commercial sites
• The RIIO-T3 baseline, against which Ofgem will measure the incremental necessity of each re-opener
• The 25 individual proposals, covering generation connections, industrial demand, and resilience works
• Ofgem's consultation process, which will precede any funding decision and may run across multiple review windows
• Contract renewal timing relative to the next TNUoS tariff announcement, typically published by National Grid ESO in draft form ahead of each April charging year

For context, TNUoS demand charges have already risen sharply over recent years as network investment has accelerated. The direction of travel under RIIO-T3, even before these re-openers, pointed to further increases. A successful £4.5 billion claim would add to that trajectory, though the cost is spread across all transmission-connected demand, so the per-site impact depends on consumption volume, triad exposure, and voltage level.

Ofgem will now review each submission, run stakeholder consultation, and issue determinations. Watch for the regulator's minded-to decisions on individual proposals, and for any National Grid ESO indication of how approved spend feeds into forward TNUoS modelling. Buyers with renewals falling in late 2025 or 2026 should ensure their advisers are pricing non-commodity cost trajectories with this pipeline in view.