How IDNOs Can Lower Your Upfront Electricity Connection Costs

In any project, cash flow matters. Every pound committed upfront is money that can’t be used elsewhere – whether that’s progressing the build, funding marketing, or securing the next site.

When it comes to electricity networks, the size of your upfront cost can have a major impact on how quickly, and profitably, you can deliver.

That’s where Independent Distribution Network Operators (IDNOs) have the ability to offer a clear commercial advantage rather than the traditional Distribution Network Operators (DNOs). Both are licensed by Ofgem, both meet the same safety and technical standards, but their business models work very differently – and that difference can put money back in your pocket.

The DNO Approach: You Pay for It All Upfront

If you connect through a DNO, you’ll almost always pay the full capital cost of building your new electricity network upfront. Once it’s built, the DNO adopts and operates it – but there’s no payment back to you for the asset you’ve just funded.

It’s straightforward, but it means tying up significant capital that could be used more productively elsewhere in your project or business.

The IDNO Difference: Asset Value Payments

An IDNO’s commercial model is built around investing in the networks they adopt. This is where the concept of asset value comes in.

When a DNO or IDNO adopts a network, they earn ongoing income from DUoS charges (Distribution Use of System charges). These are fees paid by electricity suppliers for using the DNO or IDNO’s network, which are then passed on to customers through their electricity bills.

Because this creates a long-term revenue stream, unlike the DNO, the IDNO can offer you an asset value payment when they take ownership of your network.

In practice, it works like this:

• An Independent Connection Provider (ICP) designs and builds the network to the IDNO’s regulated standards.
• Once complete, the IDNO adopts the network and takes on responsibility for operating and maintaining it.
• In return, the IDNO pays you an agreed asset value – reflecting the future DUoS income the network will generate.

In short: Asset value = the future income the IDNO expects to earn from DUoS charges, paid to you upfront to reduce your connection costs.

And unlike some other IDNOs, ENC – the BUUK group’s licensed IDNO – does not use clawback clauses. What we agree to pay as an asset value is fixed, certain, and never at risk of being withdrawn. That gives clients additional financial security and peace of mind

Why It Matters for Your Project

An asset value payment can:

• Reduce your upfront capital expenditure
• Improve cash flow and free up budget for other priorities
• Shorten the gap between projects by releasing funds sooner
• Make budget planning easier when construction costs are rising elsewhere

And because IDNOs operate in a competitive market, they’re motivated to offer the most attractive overall package – not just on the asset value, but also on service, programme, and engineering flexibility.

Safe, Regulated, and Built to Last

This isn’t a financial shortcut at the expense of safety or reliability. IDNOs are regulated by Ofgem to the same technical standards as DNOs, and their networks connect into the same national grid.

The difference is purely commercial: you get the same safe, reliable infrastructure, but with the added advantage of a payment that reduces your capital outlay.

If Your IDNO is Also an ICP

An IDNO’s role is to own and operate the network once it’s built – the design and build is usually done by an ICP.

Power On is part of the BUUK Infrastructure Group, which combines both roles in one group.

That means we can:

• Design and build your network in-house as the ICP
• Have it adopted, owned, and operated by our in-group licensed IDNO
• Deliver a fully integrated, end-to-end service from the first design through to decades of operation

This joined-up approach means fewer handovers, less risk of delays or changes, and complete accountability throughout the life of your network.

On top of that, we offer advantages a DNO cannot match: coordinated delivery of multiple utilities (electricity, heat, water, fibre, and wastewater), and a dedicated project team – sales contacts, project managers, senior designers, and tendering engineers -focused on your scheme from start to finish.