An Executive team of an Utilities Company analyzing economic trends with the City of London through the window as background
Report
Utilities

From Asset Health to Capital Confidence

An asset score won't defend your next pound of capital
Britain is asking its energy networks to do two things at once: build tomorrow’s grid and keep yesterday’s running. Both draw on the same engineers, the same outage windows, the same supply chain and, in the end, the same customer bill. And the regulator has made its position plain. A high criticality score, on its own, no longer justifies replacing an asset.

That changes the question network leaders have to answer. It is no longer “which asset is riskiest?” It is “can we explain, and reconstruct, why this portfolio is the best response to our risks, obligations and constraints?” That is capital confidence: a traceable line from imperfect evidence to interventions that hold up under operational, financial and regulatory scrutiny. Technology widens the evidence and the options. Accountable leaders still make the call.

At a glance

Four signals behind the report, and one question every board should be able to answer: why does the last pound in your portfolio beat the first intervention you left unfunded?

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£23.1bn invested. Now prove the value

That is what DNOs expect to invest in RIIO-ED2. Ofgem’s message is blunt: spending is not the outcome. Customers must see delivery against agreed outputs.

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A portfolio you can’t deliver is just a spreadsheet

Most DNO groups reported 22–36% NARM delivery at Year 2, against a 40% straight-line pace. All still expect to hit target, so delivery confidence is now on the agenda.

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£28bn, and a regulator that reads the reasoning

RIIO-3 opens with £28bn, after £4.5bn trimmed from company proposals. In gas, Ofgem cut workloads where criticality alone was used to replace healthy assets.

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2032: a fixed deadline in a moving system

Tier 1 iron mains must go by 2032, while NESO’s spatial plan redraws future flows. Today’s top priority can be overtaken by tomorrow’s network.

What leaders should do

Don’t start with a platform. Start with one decision that genuinely matters: a live portfolio choice with competing interventions and real regulatory consequences. In the first 30 days, map the evidence, the decision rights and the constraints. By day 60, reconstruct one past decision and find out whether anyone can actually trace how it was made. By day 90, put three portfolios side by side under the same capital and delivery limits, record where engineers overrode the model and why, and turn the exercise into a template you can reuse. What you walk away with is not another dashboard. It is a decision record you can stand behind.

More capital. A regulator that wants to see the reasoning. No room for decisions nobody can explain. Download From Asset Health to Capital Confidence for the evidence, three operating scenarios, five design principles and a 90-day agenda to make your next investment case defensible.
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