EVALUATION

AN INDEPENDENT EVALUATION OF THE LCNF
• NPG has increased the number of external interactions that inform and guide its
activities. They now routinely seek-out opportunities to collaborate with other DNOs
on areas of strategic interest and are actively engaged with water and gas distribution
projects through the Northern Joint Utilities Innovation Group. NPG has also
established an agreement with Newcastle University to support its Future Energy
Systems Hub.
• SPEN operational business has changed due to the adoption and implementation of
innovation, for example Rezap and the BIDOYNG device from Kelvatec which have
changed LV fault location methods. The design teams are adapting to the rollout of
flexible connection offers made possible through the LCNF funding mechanism.
• ENWL has also undergone operational business changes for example the
introduction of a managed connections process within the main business came about
directly as a result of its Capacity to Customers project and has resulted in significant
changes to the way in which generation customers are quoted and ultimately
connected. ENWL has observed that this has led to a more mature relationship with
generation customers requiring the connection customer liaison teams to work closely
with customers to better understand their connection requirements. ENWL is now
moving the principles into demand connections and are proactively engaging with a
number of existing customers with a view to entering into demand side response
contracts to assist with the network reinforcement challenge.
An illustration of how innovation is currently viewed and has been taken to the core of the
DNO business comes from the recent (Spring 2016) UKPN Head of Innovation Job
advertisement:
Reporting to the Director of Safety, Strategy & Business the Head of Innovation
has overall accountability to ensure that UK Power Networks is identifying,
prioritising and implementing best practice solutions.
Championing innovation and building support across the organisation.
Working with own team and colleagues across the business to encourage and
facilitate innovative products, services and processes.
Responsible for providing appropriate leadership, resources and expertise to
ensure that innovation really happens and UK Power Networks is regarded as both
the thought leader and the best at driving value from innovation.
Our view is that this suggests that UKPN intends innovation to be considered across the
whole business, not just within the Future Network Group.
3.3 Research and Development spend
The total DNO spend on research and development (R&D) has inevitably increased
following the introduction of the LCNF. Information on R&D expenditure has been
provided by five DNOs and is illustrated in Figure 7. This shows that the spend funded by
other mechanisms, mainly the Innovation Funding Initiative (IFI), has remained relatively
constant over the LCNF period and from Figure 8 – which includes the years prior to the
introduction of LCNF – the total expenditure can be seen to be relatively stable for the two
DNOs who provide this history.
PÖYRY MANAGEMENT CONSULTING
October 2016
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