EVALUATION

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AN INDEPENDENT <strong>EVALUATION</strong> OF THE LCNF non-routine operation permits (NROs) and improved access to internal electrical and mechanical competency could be made. This respondent also brought up another point made earlier – the financial risk that project partners have to take on when it comes to projects – saying that they take on a financial risk beyond the budget of the innovation project. Finally, one respondent listed the barriers as; a tight criteria preventing a variety of parties leading projects, the difficulty for an NGO to get involved due to the difference between DNOs and NGOs, and the DNO having to develop skills it did not possess previously in order to bring non DNO project partners up to speed and provide the support required. C.1.8 Parts Of The LCNF Which Have Worked and Not Worked Well (Q1.8) Questions: In your view, which parts of the LCNF have worked well and which haven’t? What would you change in retrospect and why? C.1.8.1 Summary of Responses The responses to this part of the questionnaire were extremely varied, with a large mix of views and suggestions. About one third of the respondents felt that overall the LCNF worked well. Three respondents gave no response to this question, with one stating as a panel member they feed comments on this directly to Ofgem, and another feeling they did not have enough experience to answer. C.1.8.2 LCNF Successful Aspects One respondent feels that the LCNF, especially tier two, has successfully filled the gap between low TRL and high TRL projects. The same respondent thinks that the engagement enabled for customers and partners is unequalled by anything else, stakeholder engagement has been key for many of the projects. This respondent believes the fund has resulted in solutions that have delivered value for money to consumers, and ensured low carbon generation can be connected to the grid. They say that RIIO-ED1 business plans included £641m worth of savings to customers as a result of innovation. One response felt the most successful aspects of the fund were the competition in selecting the best projects, and DNOs being required to share learning and customerfunded IPR – thus developing a knowledge base and allowing projects to build on previous learning. Another success of the LCNF mentioned is the culture change within the DNOs – it has shifted to have more focus on customer benefits and brought a competitive element that was previously there. C.1.8.3 LCNF Less Successful Aspects The lack of reliability of trials that include people (as opposed to testing technology) was mentioned by one respondent. They felt that you cannot be confident that results are repeatable for trials of this nature as those involved are likely to be more enthusiastic than the general population, and the focus is likely to give an unsustainable level of engagement. PÖYRY MANAGEMENT CONSULTING October 2016 713_Poyry_Report_Evaluation_of_the_LCNF_FINAL_Oct_2016_v700.docx 174
AN INDEPENDENT <strong>EVALUATION</strong> OF THE LCNF One respondent felt that Ofgem’s demands regarding DNOs investment savings are too high as their final figure for investment savings by DNOs in the RIIO ED1 is, in general, greater than the figure the DNOs have committed to in their business plans. They need to ensure the incentive to reach the figure is enough for the network operators to allocate resources. One respondent felt that the reward structure didn’t seem to encourage enough companies to come forward. They also felt that the consultant involvement in the competition process was onerous, but the process was okay when that involvement decreased. One aspect pointed out by a respondent as a weak point was the ability to convey the importance and benefits of the fund to potential participants and customer base, they believe this needs looked into and network companies should be encouraged to promote the benefits of projects to stakeholders. The same respondent felt another difficulty is recruiting customers to get involved – suggesting that a more integrated approach could be developed such as shared customer recruitment platforms. Intellectual property was brought up again by two respondents; the former feels it is not right for DNOs to hold the IP, believing it would be better for the consumers if a party that could bets exploit it held the IP. This respondent also thinks the competitive aspect of awarding projects may be discouraging some collaboration of the DNO’s part. The latter believed changes to these rules could generate more ideas and more savings for the consumer. C.1.8.4 LCNF Suggested Changes Business as Usual One respondent thought that Ofgem, in light of the lack of BAU solutions implemented, need to ensure the projects fit into the future plans of the network operators thus ensuring the consumers get value for money. Another respondent also points out the limited “business as usual” rollouts that have been seen, wondering what can be done to get operational stakeholders to buy in. Another respondent feels that other incentives will be required for the UK to implement LCNF funded projects into business as usual. Finally, one respondent makes the point that it should not be overlooked how challenging embedding technology as business as usual is. It includes dissemination, training, standards, operational and asset management policies, retaining accreditation, procurement policies as well as risk management. Other Suggestions One respondent would like to see the LCNF develop and take technology from research to delivery along the TRL spectrum. It was suggested by a respondent that the idea guidelines are no longer so open; going forward the integration of proven innovative technology may be effective. This respondent also feels that there should be cross energy market vectors i.e. electricity, heat, combustible gases, as it is clear that to have successful low carbon network strategy there needs to be collaboration between various vectors. PÖYRY MANAGEMENT CONSULTING October 2016 713_Poyry_Report_Evaluation_of_the_LCNF_FINAL_Oct_2016_v700.docx 175
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EVALUATION

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