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.

IDNO meaning:

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. The equivalence in service level between DNO/IDNO is evident in these licence conditions. Customers connected to an IDNO network can choose any of the available suppliers to provide their electricity.