Ofgem opens consultation on how network owners must evidence wider procurement value, closing 5 January 2027

Ofgem published draft guidance on 13 October 2026 setting out how regulated network owners and developers must demonstrate that procurement decisions deliver wider long-term benefits^[1]. The consultation closes 5 January 2027, with responses directed to the regulator's Major Projects team at Transmission.Acceleration@ofgem.gov.uk^[1].

What the guidance covers

The draft guidance addresses a specific and recurring tension in regulated network procurement: a buyer may prefer a supplier or contract structure that costs more, takes longer, or carries greater delivery risk - but argues the choice is justified by benefits that sit outside the immediate transaction^[1].

The guidance applies where wider long-term benefits are used to justify associated impacts on costs, delivery timescales, delivery confidence or risk^[1]. It is not intended to replace existing regulatory frameworks. Instead, it is designed to sit alongside and complement the arrangements under which Ofgem already assesses whether proposed costs represent efficient value for consumers^[1].

Who must engage

Ofgem has targeted the consultation at three groups^[1]:

• Electricity network owners
• Interconnector developers
• Offshore hybrid asset developers

The scope reflects the assets where procurement decisions are largest, most complex, and most likely to involve trade-offs between near-term cost and longer-term system or industrial benefits - HVDC cables, substations, and the equipment underpinning the Accelerated Strategic Transmission Investment (ASTI) programme.

The supply chain backdrop

The consultation lands against a backdrop of sustained regulatory pressure on network companies to think beyond unit cost when buying equipment. In March 2026, Ofgem published a call for evidence on growing GB's electricity network supply chains, stating that the scale of investment into GB's electricity networks must deliver jobs and opportunities within Great Britain's industrial heartlands^[1]. That document explored domestic manufacturing capability, demand visibility, and procurement practices - and explicitly welcomed views on what adjustments might encourage greater local content in the supply chain.

The new procurement guidance is a logical next step: if network owners are going to argue that buying from a domestic or strategically preferred supplier is worth a cost or schedule premium, Ofgem now wants to know exactly how they will prove it.

The regulator has been building this framework in stages. Its Advanced Procurement Mechanism, finalised in March 2025, gave transmission owners early access to supply chain capacity by allowing equipment purchases years before projects are fully consented. The wider-value guidance addresses the complementary question: once a procurement decision is made, what evidence standard applies when the chosen option is not the cheapest?

What to watch

The 264 KB consultation document is the key read for procurement and regulatory affairs teams at National Grid Electricity Transmission, SP Transmission, SHE Transmission, and the growing cohort of OFTO and interconnector developers. The evidentiary standard Ofgem settles on will shape how network companies structure supplier selection processes and document decisions under RIIO-ET3 - the price control running from 1 April 2026 to 31 March 2031 - and beyond. Responses are due by 5 January 2027.