RESILIENCE PLANNING AND ADAPTIVE REGULATION

1. Meaning and Regulatory Purpose

Resilience planning in electricity law concerns the ability of the power system to anticipate, withstand, respond to and recover from disruptive events such as severe weather, cyberattacks, equipment failure, fuel shortages, demand shocks and cascading outages. Adaptive regulation complements this by allowing regulatory frameworks to evolve as risks, technologies and system conditions change.

In Great Britain, resilience is increasingly integrated into network regulation, emergency planning and price controls. The Energy Act 2023 expressly supports increased resilience and reliability of UK energy systems, while the government's electricity risk-preparedness framework establishes arrangements for preventing, preparing for and managing electricity crises.

2. Resilience Planning Obligations

Electricity network companies must plan beyond ordinary day-to-day reliability. Resilience planning includes asset replacement, redundancy, vegetation management, flood protection, cyber security, restoration capabilities, emergency communications and contingency arrangements.

The Electricity Supply Emergency Code, updated in April 2026, provides arrangements for situations involving civil emergencies or threatened electricity-supply emergencies. It sets out actions that electricity companies should plan to undertake where exceptional measures become necessary to preserve or restore supply.

System restoration obligations are also embedded in electricity industry codes. Ofgem-approved modifications implementing the Electricity System Restoration Standard establish resilience requirements for generators, transmission owners, distribution operators and restoration service providers, including Distribution Zone Restoration Plans.

3. Adaptive Regulation Through RIIO

Ofgem's RIIO framework—Revenue = Incentives + Innovation + Outputs— is an important example of adaptive regulation. It was designed to regulate networks under significant uncertainty while encouraging investment, innovation and efficient delivery of a low-carbon energy system. Ofgem described the framework from its inception as capable of being adapted as experience and circumstances develop.

Under RIIO-ED2, electricity distribution companies have been required to improve resilience and their response to extreme-weather events. Ofgem specifically emphasised flexible and adaptive regulation as a mechanism for enabling necessary network investment without imposing unnecessary costs on consumers.

From April 2026, RIIO-ET3, part of RIIO-3, governs electricity transmission price controls for 2026–2031. Its associated guidance permits mechanisms such as re-openers, reporting requirements and project-specific adjustments, allowing regulatory decisions to respond to changing investment needs rather than being completely fixed at the beginning of a five-year control period.

Case/Appeal: Northern Powergrid (Northeast) plc and Northern Powergrid (Yorkshire) plc v GEMA – RIIO-ED2 Appeal (CMA, 2023)

Facts: Northern Powergrid challenged Ofgem's modifications to its electricity-distribution licences following the RIIO-ED2 price-control determination. It argued, among other matters, that Ofgem had incorrectly allocated expenditure allowances and thereby underfunded its network businesses.

Legal Issue: Whether GEMA's methodology for determining network expenditure and incentive allowances was wrong under the statutory appeal framework.

Judgment: The Competition and Markets Authority upheld the appeal on the first ground concerning misallocation of allowances and required GEMA to reconsider and redetermine that part of its decision. The second ground concerning a business-plan incentive reward was dismissed.

Legal Principle/Ratio: Regulators may use sophisticated and forward-looking price-control methodologies to address future network risks, but their calculations must be supported by rational evidence and remain open to statutory review.

Significance: The appeal illustrates adaptive regulation in practice: resilience investment must be periodically recalibrated as assumptions concerning network costs, electrification and future demand change.

Case: R (British Gas Trading Ltd) v GEMA [2019] EWHC 3048 (Admin)

Facts: British Gas challenged Ofgem's methodology for implementing the statutory default-tariff cap, particularly assumptions affecting wholesale-cost allowances.

Legal Issue: Whether GEMA had lawfully consulted on material assumptions forming part of its regulatory methodology.

Judgment: The High Court held that British Gas's criticisms were well founded and granted declaratory relief because a material assumption had not been fairly exposed during consultation.

Legal Principle/Ratio: Even where regulators must respond rapidly to changing market circumstances, adaptive regulation remains constrained by procedural fairness, statutory duties and adequate consultation.

Significance: Flexibility cannot become arbitrary regulatory discretion.

4. Overall Significance

Resilience planning and adaptive regulation operate together. Resilience requires long-term preparation for uncertain shocks, while adaptive regulation provides mechanisms to revise incentives, expenditure allowances, technical standards and licence obligations when risks change. Current UK policy therefore combines forward planning, emergency preparedness, restoration standards, reporting obligations, flexible price controls and regulatory review. This approach seeks to ensure that an increasingly electrified and renewable-dependent power system remains both resilient and capable of adapting to technological, climatic and security-related uncertainty.