EVALUATION

AN INDEPENDENT EVALUATION OF THE LCNF
C.1.1.3 Other Points
One respondent thought that the fund has changed the core business of DNOs but only to
include high TRL innovation with low TRL innovation being overlooked as it will not
provide any benefit in the regulatory period.
Another respondent believed it was important to mention that the work carried out under
the IFI contributed to the success of the LCNF, the past learning and development was
valuable for the LCNF.
Finally, two respondents highlighted that innovation is still driven by funding under RIIO
(NIC and NIA).
RIIO-ED1 was mentioned by a further respondent – stating that as a result of the LCNF
DNOs could accept lower Totex allowances in RIIO-ED1 that incorporated some
efficiencies, and therefore represent good value in the period 2015-2023, and thus a
medium-term return on investment made by customers in 2010-2015.
C.1.2
LCNF Meeting its Objectives Regarding Low Carbon (Q1.2)
Questions:
Do you believe that the LCNF has met its objective of helping the DNOs move
towards a low carbon business whilst maintaining security of supply and delivering
value for money to customers? What justification do you have for your response?
C.1.2.1 Summary of Responses
The responses to this part of the questionnaire were mixed – with some respondents
believing the objective was met, some believing it was not and others believing the
objective was only partially met.
One respondent did not answer this question.
C.1.2.2 Positive Responses
Seven respondents felt that the objective was met.
One respondent in this group noted that the DNOs have connected large quantities of
distributed and renewable generation, while also achieving good performance regarding
CI and CML targets.
Two respondents felt the LCNF focussed on projects that aided a low carbon future. One
of these respondents continued on to say, as a panel member, they have always taken
value for money and security of supply into account and can’t think of any instance where
security of supply was threatened.
The other respondent in this group went on to say that DNOs have committed to
investment savings that during RIIO ED1 alone easily exceed the total consumer
contributions to the LCN Fund. They also commented on the quality of supply
performance – saying that it continues to improve, though this is also partly due to non
LCNF funded innovation. This respondent believes the competitive nature of Tier 2
ensured that submitted projects were well thought out with clear business cases, also
driven by the DNOs wanting to have a strong reputation from being a frequent winner of
bids.
PÖYRY MANAGEMENT CONSULTING
October 2016
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