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<p>Electricity distribution networks are regulated by the independent energy regulator,
Ofgem, and, by law, network regulation must be carried out independently of Government.
Under the existing regulatory framework, distribution network operators are allowed
to increase capacity on their networks to accommodate expected growth in demand from
domestic electricity consumption.</p><p> </p><p>Energy networks require significant
investment in order to ensure that Great Britain has a secure, dynamic energy system
that is fit for the challenges of the future. BEIS estimates that between 2010 and
2017 £35bn has been invested to upgrade, reinforce and extend the electricity networks
(both transmission and distribution) and a further £14bn may need to be invested between
by 2020. Ofgem's RIIO 2 price control will set out the pathway for investment in our
energy networks through the mid-2020s.</p><p> </p><p>Government expects network companies
and regulators to act in the best interests of consumers including in relation to
more active system management as per the Government and Ofgem’s <em>Smart Systems
and Flexibility Plan</em>. We are already seeing distribution network operators manage
their systems more actively, and make more innovative use of data and smart technologies.
For example, all six DNOs in Great Britain have now committed to open all significant
network reinforcement to competition with flexibility services.</p>
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