EVALUATION

AN INDEPENDENT EVALUATION OF THE LCNF
B.1.5.4 Reservations
One respondent, made an observation that partners sometimes are unaware of the
amount of work and commitment required for the projects, which really comes into play at
the end of the project when they are limited on time or interest. They feel if OFGEM gave
more information regarding the exact project requirements it could hopefully avoid this in
the future. They also think it should be made clearer what exactly the fund is i.e. an
adjustment to allowable revenue as opposed to a money pot.
Another respondent thought that the objective had only been partially met – but
collaboration has definitely improved as many DNO managers are in constant
communication with each other. Their concern is that the now experienced staff members
are not lost due to the usual routes, and if they are that it is ensured new staff members
are properly informed on the LCNF.
It was the view of one respondent that the collaboration is not as great as people like to
believe, but DNOs actually conduct themselves more like competitors.
Finally, another respondent believed that the collaborative aspects have been carried out
to varying degrees of success. They say this is down to the complexities of the LCNF
bidding process and the governance of the project, as this puts constraints on the way the
project partners operate. They think that this may not be the most efficient way to deliver
an innovation project.
B.1.6
Barriers that Affected the Outcome of the Project (Q1.6)
Questions:
Are you aware of any barriers that may have affected the outcome of the projects?
B.1.6.1 Summary of Responses
There were six respondents that stated that they knew of no barriers that may have
affected the outcome of the projects. The others commented on the barriers that affected
the projects they were involved in, with only two respondents not answering the question.
B.1.6.2 Customer Engagement
A fifth of the respondents highlighted customer engagement as a barrier, as it is not an
area DNOs have usually been active in, as this is usually mediated by retailers as pointed
out by a respondent. The issue was the difficulty in getting the participation of consumers.
One respondent pointed out that DNOs would often make naïve assumptions regarding
offers that would appeal to customers, often choosing the wrong ones.
B.1.6.3 Governance
Governance was another barrier mentioned by several respondents. One respondent
gave their views of the governance of Tier 2 projects – saying it was a definite barrier and
the focus on value for money for customers meant the projects became very risk averse
leading to concepts become less innovative. They say the Tier 2 bids from year 2
onwards are evidence of this. They say it was clear from the DNOs that they had
struggled during the change control process with Ofgem, meaning they were hesitant to
develop any projects with a less than high certain outcome. They continue on to say they
think this has created irreversible damage to the Tier 2 (now NIC) network innovation
programme.
PÖYRY MANAGEMENT CONSULTING
October 2016
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