UK utilities: Distribution review methodology decision appears supportive

研报英文原文证据摘录

UK utilities: Distribution review methodology decision appears supportive

Deutsche Bank

Research

Europe Industry Date

France 21 May 2026

Spain UK utilities

United Kingdom Breaking News

Utilities

Electricity

Distribution review methodology

decision appears supportive

James Brand, CFA

Sector-specific methodology decision for electricity distribution Research Analyst

Today Ofgem published its methodology for the upcoming electricity distribution +44-20-754-74705

price review. The main year of the review will be in 2027, with new prices from April

2028. It also published guidelines for business plans. The overall proposals seem Companies featured

supportive, although given the other energy network reviews were finalised only National Grid PLC (NG.L),GBP1,255.00 Buy

c.6 months ago no major surprises were expected. Our initial view on the key points SSE (SSE.L),GBP2,337.00 Buy

are as follows: Iberdrola (IBE.MC),EUR19.61 Hold

Engie (ENGIE.PA),EUR27.33 Buy

- Ofgem gave an early view on the allowed return on equity, with a range of 5.1-

Source: Deutsche Bank

7.05% real, and a midpoint of 6.1%. This is in line with the allowed return on equity

for gas distribution in the price control proposals six months ago, although may be

seen as encouraging as sometimes Ofgem 'aims up'.

- Ofgem gave an early view on the allowed return on capital, with a midpoint real

allowed return of 4.35% and semi nominal return of 5.68%. These allowances are

broadly in line with those for other energy networks six months ago.

- On financeability, Ofgem said it was minded not to change depreciation policy,

with asset lives for new assets having been previously lengthened from 20 years to

45 years. However, it said that adjustments to capitalisation rates may be allowed.