EVALUATION

AN INDEPENDENT EVALUATION OF THE LCNF
Projects which focus on the connection of distributed generation and flexible
demand have a high potential value and are the most likely to be readily
incorporated into current-day business practice.
The innovation schemes are designed to deliver value for money to generation and
demand customers by finding ‘smart’ solutions such as ANM and DSR.
The benefits of some of the projects fall to connecting customers, or to those providing
response services to national markets. However, some LCNF projects have, or will, lead
to a reduction in Distribution Use of System (DUoS) charges as a direct result in the
opportunity for DNOs to defer network reinforcement through, for example, enhanced
voltage control or improved management of fault level.
In general, the benefits associated with the connection of distributed generation and
flexible demand projects are significantly greater than those benefits where asset
replacement may be deferred. There are also potential benefits to GB as a whole, with
respect to the potential for the export of products and learning to other parts of the world
experiencing similar challenges.
There is insufficient high-level overview and co-ordination of individual
projects to ensure alignment with the overall direction of the industry.
A large number of innovation initiatives have been undertaken across a range of technical
and commercial areas under the LCNF, and this can be used to provide some measure of
success. However, whilst each DNO has a high-level strategy for innovation within its
Business Plans, there does not appear to be any overarching plan to ensure the direction
of future innovation funding aligns with, and supports, the overall GB energy strategy. For
example, doing this would allow proper consideration of the need for a residential demand
side response strategy – taking account of the smart meter roll-out timescales and the
early learning from the LCNF projects.
Whilst the quality and methods of dissemination of information for individual Tier 2
projects is high, it has been observed that the Tier 1 projects do not receive such a high
priority in this respect. There is a lack of overall programme monitoring to ensure the
learning in each technology area is readily available 79 .
The LCNF has led, directly, to an unprecedented level of DNO engagement
with customers.
Over 100 third parties and stakeholders have been involved with LCNF projects.
Generally there was found to be effective collaboration and engagement between the
DNOs, third parties undertaking the projects and stakeholders. However it was noted that
this was not always the case – with some respondents to our questionnaire suggesting
that there is opportunity for improvement to achieve best practice. Some barriers to
project partner involvement were identified associated with the reputational and/or
79
This is similar to the conclusions reached in the EU Research Funding ‘Framework
Programme 7’post evaluation findings.
PÖYRY MANAGEMENT CONSULTING
October 2016
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