EVALUATION

AN INDEPENDENT EVALUATION OF THE LCNF
savings for customers as a result of it. The respondent’s final point was that the success
of their innovation projects has led them to consider investing additional investor funds
into innovation projects.
Following on from that, one respondent stated that in the RIIO ED1 price control Ofgem
identified £963m of savings that could be realised by the DNOs through Smart Grid
savings and innovation. They feel for this to be achieved the DNOs will need to utilise
LCNF learnings and make use of innovation funding mechanisms in RIIO price controls.
Benefits
As mentioned above, one of the respondents did not agree with the quantification of the
benefits according to the questionnaire. This respondent provided two examples of their
own projects where the learning could prove to be significant between 2020 and 2050,
even if having not provided any quantitative benefits to date.
Their first example of this is the CLNR project in which they implemented a large number
of heat pumps and monitored their electrical characteristics and ability to peak shift. They
found that though the heat pumps reduced customer peak load by 2.5kW; there were real
barriers such as the requirement to retrofit pumps and the associated thermal store into
domestic properties – installations would be expensive, require insulation, require physical
space and cause disruption. So though the project could not go ahead they believe the
learning from it helped shape the GB renewable heat strategy. They continued on saying
the learning is also being used to aid the Smart Systems and Heat project Energy
Systems Catapult is carrying out.
The My Electric Avenue project was mentioned in that although it has not provided
quantitative benefits to date the project tested technology that could control charging
times on the network, and that this technology could not be implemented without input
from the motor industry, which is occurring in a follow-on project.
Business as usual
One of the respondents mentioned their Constraint Managed Zones project as an
example of a business as usual initiative as result of the LCNF – it is a culmination of
learning from various LCNF projects they undertook.
Another respondent is of the view that the learning resulted from projects requires further
real life testing before it is put into business as usual – they see the primary aim of a DNO
as servicing their customers so rigorous testing is required to ensure the technology used
in trials is as effective in real life.
A.3.1.3 Continuing Progress
One of the respondents stressed the importance of the support for innovation continuing
to ensure the progress the industry has made is maintained and that the benefits from
ongoing projects are delivered. They also know that the DNOs have a responsibility to
ensure the projects are transitioned to business as usual as quickly as is possible.
The respondent believes that with the upcoming challenges in the industry including the
increasing use of low carbon technologies, the network operators will need to be able to
innovate in order to adapt. In their experience their best solutions, CMZ and ANM, have
been an amalgamation of learning from across their innovation projects – so they think
being able to maintain a wide range of projects is important.
PÖYRY MANAGEMENT CONSULTING
October 2016
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