01.12.2016 Views

EVALUATION

evaluation_of_the_lcnf_0

evaluation_of_the_lcnf_0

SHOW MORE
SHOW LESS

Create successful ePaper yourself

Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.

AN INDEPENDENT <strong>EVALUATION</strong> OF THE LCNF<br />

into normal business practices. We have also drawn on some of the findings of a recent<br />

academic study on the outcome of the LCNF projects 3 .<br />

Conclusions<br />

The key findings and conclusions associated with our evaluation of the LCNF are set out<br />

below. This considers performance against the LCNF objectives, integration into business<br />

as usual practices, and our independent view on the extent to which the LCNF has<br />

delivered value-for-money. Further detail on each of the concluding comments below can<br />

be found in Section 7 of this report:<br />

• the LCNF has succeeded in encouraging DNOs to innovate and has served to move<br />

the level of innovation within the DNOs from a ‘low’ base to a ‘moderate’ level;<br />

• LCNF has encouraged DNOs to include innovation as core business, with<br />

encouraging sign of transfer to business as usual – but this work is still progressing;<br />

• current benefits are estimated to be approximately one third of the total funding cost;<br />

• the potential future net-benefit from the LCNF projects is significant and is estimated<br />

to range from 4.5 to 6.5 times the cost of funding the scheme;<br />

• projects which focus on the connection of distributed generation (DG) and flexible<br />

demand have a high potential value and are the most likely to be readily incorporated<br />

into current-day business practice; and<br />

• there is insufficient high-level overview and co-ordination of individual projects to<br />

ensure alignment with the overall direction of the industry.<br />

Recommendations<br />

Our conclusions have led to the following recommendations. Further detail on each of the<br />

recommendations can be found in Section 7 of this report:<br />

• Ofgem should continue to fund DNO innovation to ensure the culture of innovation<br />

continues to develop within the network businesses. Consideration should be given<br />

as to how support for DNO innovation can best accommodate the future requirements<br />

of the whole, low carbon, energy system;<br />

• the DNOs should be required to jointly develop and publish an ‘innovation roadmap’.<br />

This should be developed in conjunction with the System Operator, the transmission<br />

companies, other parties such as Independent Distribution Network Operators and<br />

participants associated with other energy vectors such as gas, heat networks and<br />

transport. Research funding bodies such as EPSRC, DBEI, Innovate UK and other<br />

relevant industry initiatives should also be included to ensure funded innovation is<br />

optimised to deliver maximum benefit for customers;<br />

• there should be greater focus on the sharing of project knowledge and learning –<br />

particularly across and between the DNOs –in order to maximise the benefits and<br />

value of LCNF initiatives and innovation;<br />

3<br />

University of Strathclyde. ‘A Review and Synthesis of the Outcomes from Low Carbon<br />

Networks Fund Projects’, September 2016 (http://www.ukerc.ac.uk/publications/a-reviewand-synthesis-of-the-outcomes-from-low-carbon-networks-fund-projects.html).<br />

PÖYRY MANAGEMENT CONSULTING<br />

October 2016<br />

713_Poyry_Report_Evaluation_of_the_LCNF_FINAL_Oct_2016_v700.docx<br />

2

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!