One in Five Energy Network Projects Backed by Consumers Show Little to No Proven Value

The UK’s gas and electricity networks are under scrutiny after failing to demonstrate the value of more than one-fifth of the innovation projects funded by consumers through the Network Innovation Allowances during the current 2021-2028 price control period, known as RIIO2. According to new research from Citizens Advice, ten out of the forty-five projects they reviewed failed to demonstrate the benefits they were intended to deliver.

The findings go further. The report points out that over sixty per cent of completed projects offered either vague or incomplete details about what comes next. This raises doubts about whether the work will ever translate into practical results or lasting improvements. Ofgem signs off on each company’s allowance as part of the wider price control process, yet these gaps leave significant questions about accountability.

Citizens Advice also examined the Strategic Innovation Fund, a scheme jointly managed by Ofgem and Innovate UK. Both the NIA and SIF were designed to support energy innovation, but their funding structures lean heavily on consumers. While network companies and their partners contribute only ten per cent of the costs, the remaining ninety per cent is drawn directly from people’s energy bills.

The scale of this reliance is striking. More than £ 727 million in funding across the current price control has come mainly from households and businesses. Citizens Advice argues that such significant spending demands greater clarity. They recommend that network companies use a consistent reporting format, which makes it easy to see whether projects have been implemented, developed, or closed, and why. They also suggest that timelines should be presented visually, allowing progress to be tracked at a glance.

It says: “As the primary contributors, consumers have a right to understand how funds are allocated and whether projects meet their goals…Transparent governance fosters accountability, ensures funds are used effectively, and delivers meaningful value and benefits to consumers.”

However, the analysis found that several NIA projects provided vague or unclear descriptions of the benefits they are delivering.

The report adds: “They often rely on generalised or intangible statements. These projects lacked context or explanation of how the proposed benefits would be achieved…As a result, it is difficult to assess the tangible value or impact these projects are expected to deliver.”

Overall, compared with SIF projects, the report says that NIA projects are “less transparent”, as the onus is on networks themselves to report results, with less external scrutiny of outputs.

“The higher transparency in SIF projects is largely due to their open, competitive funding process and the greater scrutiny they receive from Ofgem. In contrast, NIA projects are selected internally by network licensees, which can result in less external oversight and reduced transparency,” it adds.

To achieve consistency, the Energy Networks Association has been asked to establish clear categories, such as “completed” or “discontinued.” At the same time, Citizens Advice wants Ofgem to step up its oversight. Their recommendations include regular quality reviews, direct comparisons between outcomes and original goals, and a strict requirement that final project reports are submitted on time.