EVALUATION

AN INDEPENDENT EVALUATION OF THE LCNF
4.4.2.1 Have the DNOs been incentivised to include innovation as part of their core
business?
Questions:
Do you believe that the LCNF has met its objective in incentivising the DNOs to
include innovation as part of their core business?
To what extent do you believe that the LCNF projects would have occurred without
the LCNF?
Over 50% of respondents said that the LCNF as met its objective, with 32% holding the
view that it is ‘work-in-progress’ and 11% believing that the LCNF had not met its
objective. The remaining respondents did not know or did not answer the question.
Just over half (53%) of respondents thought that the projects would not have occurred
without the LCNF, with 22% saying LCNF had accelerated the innovations. 17% thought
that a small number of projects might have occurred without the LCNF.
Questionnaire responses to these questions include references to broader organisational
issues associated with making innovation part of the core DNO business – such as the
creation of the Future Networks Groups. Responses also included views on the range of
projects undertaken and opinions about what is likely to have happened without the
LCNF. A summary is given in Figure 13.
Some of the views and opinions we have gathered from the project partners and other
industry parties about the status of innovation within the DNOs before LCNF relate to
issues associated with fundamental business drivers (e.g. cost viability of a regulated
company, risk profile etc.). Despite the IFI and Registered Power Zone (RPZ) incentives
for small scale innovation, some respondents described the DNO attitude to innovation
prior to LCNF as tending to be somewhat negative. Some respondents felt that active
network management and demand-side response would not be possible without the
LCNF. On the other hand the respondents did note that disruptive technologies would
have necessitated some technical advances in the smart area anyway.
PÖYRY MANAGEMENT CONSULTING
October 2016
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