What are the differences between IDNOs and DNOs?
Understanding the differences between Independent Distribution Network Operators (IDNOs) and Distribution Network Operators (DNOs).
IDNOs offer developers and business owners an alternative route to connect to the electricity grid with the added advantage of an Asset Adoption Value payment.
Find out more in the short video below.
You can also download our PDF explaining the differences between IDNOs and DNOs.
IDNO and related terms - FAQ
IDNOs vs DNOs: what is the difference?
Distribution network operators (DNOs) are companies licensed to distribute electricity in specific areas of Great Britain by the Office of Gas and Electricity Markets (Ofgem).
The DNOs distribute electricity from the transmission grid to homes and businesses in fourteen geographical areas throughout Great Britain. The Utilities Act 2000 prevents DNOs from supplying electricity; this is done by separate electricity supply companies, chosen by the consumer, who makes use of the distribution network.
In order to increase competition in the electricity distribution market, and to keep bills low for the consumer, Ofgem now licences Independent Distribution Network Operators (IDNOs). IDNOs develop, operate and maintain local electricity distribution networks anywhere in Great Britain.
Independent Distribution Network Operators (IDNOs) connect to the local distribution network or to the transmission network to supply new housing and commercial developments with electricity. IDNOs are responsible for managing and operating the networks they develop, including all future maintenance and fault repairs.
IDNOs have the same obligations and performance standards as DNOs. Ofgem regulates the amounts that IDNOs can charge their customers for using their networks via a ‘Relative Price Control’. This requires IDNO charges to be capped for all customers at a level broadly consistent with the equivalent DNO charge.
The licence conditions for IDNOs mean that customers who are connected to an IDNO network will be entitled to the same level of service and guaranteed performance standards than those applicable to DNOs. Customers connected to an IDNO network can choose any of the available suppliers to provide their electricity.
What’s an ICP?
An Independent Connection Provider (ICP) is an accredited company that carries out works on behalf of clients on the electricity network. Networks that are built or operated by ICPs will be adopted by either a Distribution Network Operator, or by an Independent Distribution Network Operator (IDNO).
An ICP can carry out Contestable Works on behalf of a DNO or IDNO, or on behalf of a client. Examples of Contestable Works include:
- Installation of cables (High Voltage and Low Voltage)
- Substation installation
- Cable Jointing
- Network Connections
Commercial customers can choose to employ an accredited contractor (ICP or IDNO) to carry out 'contestable' elements of the works.
Are Vattenfall’s networks built to the same standards as DNO networks?
Yes. Vattenfall guarantees that the networks we build meet the standards of the regional DNO. We have been designing, building and operating electrical networks for more than 100 years.
Are IDNO networks safe?
Yes. The Ofgem licensing and DNO standards demand that IDNO networks are designed and built to meet the highest standards of quality and safety. The networks we build are inspected and approved by the regional DNO under what is known as ‘Design Approval’. There are already several thousands of IDNO networks operating in the UK.
What do the terms Contestable and Non Contestable works mean?
Most of the work required for a new electrical supply project is known as “contestable work” that can be undertaken by an independent company, not just the DNO in the area.
In some instances the DNO has to complete some of the works on their equipment to enable a new development to be connected which they restrict solely to their own operators or chosen contractors, as well as the final connection. This work is known as “non-contestable works”. Read more about contestable vs non-contestable works.
What happens in an emergency or loss of supply?
Part of the IDNOs licence obligations are to ensure a 24/7 emergency response, like a DNO. When an IDNO is informed of an emergency a response procedure will be actioned to ensure the network is made safe and any supply fault is isolated and rectified as quickly as possible.
Who maintains an IDNO network?
In line with the license obligations, an IDNO is responsible for the maintenance of their network.
Does it cost more for domestic consumers if they are connected to an IDNO network?
No. IDNOs have a licence obligation to not charge more than if a domestic customer was connected to the DNO directly. Ofgem regulates the amounts that IDNOs can charge for using their networks via a ‘Relative Price Control’. This requires IDNO charges to be capped for all customers at a level broadly consistent with the DNO equivalent charge.
Does it affect my choice of electricity supplier if I am connected to an IDNO network?
No, the choice of supplier is not affected.
Can DNOs offer capital installation cost discounts (Asset Value) for new developments?
No. To create and promote competition in the connections market Ofgem allow IDNOs to use future revenues from their networks to help subsidise the initial costs of new network projects. This “capital installation costs discount” or “Asset Adoption Value” can be very attractive to a company that is looking to develop a new electrical network and is used to help reduce the total capital cost of designing and building the power network. DNOs cannot discount in this way.
What’s a POC?
POC is the “Point Of Connection” where a new supply network is connected to the existing electricity network in the area.
Why does the IDNO need to know the POC before they can provide a price?
We need to know where the new network will connect to the existing mains network so that we can provide a design and price for the offsite works as well as the onsite network installation. This is known as contestable works. The final connection to the existing electricity network is non-contestable.
What benefits does Vattenfall offer in comparison to using a DNO?
Working with Vattenfall provides clients with a secure partner with a long term view on asset ownership.
Vattenfall IDNO is a leading IDNO company owned by the Swedish company Vattenfall AB, one of Europe’s biggest retailers of electricity and one of the largest producers of electricity.
Vattenfall IDNO provide strong commercial offerings as an energy sector pioneer with broad capability across the energy market.
By choosing Vattenfall IDNO, you are partnering with an experienced, agile UK team with the financial backing and stability of a major European energy company.