EVALUATION

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AN INDEPENDENT <strong>EVALUATION</strong> OF THE LCNF • specific expertise in respect of an innovative idea may lie with one, or few companies and hence competition may be difficult to achieve; • the cost of the project is difficult to determine due to the uncertainty around it’s innovate nature; and • the uncertain energy landscape can make the creation of a robust business case challenging. Whilst there was no direct mandate for project partner contribution, the governance document states that accessing additional funding will be looked on favourably and cites project partners who have an interest in the results of the project as an example as a source of such funding. It was felt by some respondents that the way this was interpreted at the project scoping stage and the benefit to the partner was not always clear. The length of time a project partner may have to wait for payment milestones and to receive a share of the final successful delivery reward payment (which may be over 12 months), is difficult for small companies cash flow. With respect to IP about half the project partner respondents felt that IP rights were treated appropriately within the LCNF. The issues identified by one quarter of respondents were about the standard clauses requiring participants to give up too much IP and the difficulties with sharing whilst not giving away background IP. This is generally more of an issue for SMEs some of whom consider that the default terms in LCNF and NIC are potentially restricting and that addressing IP correctly to achieve the most appropriate exploitation of IP is time-consuming. A range of positive contributions from project partners have been identified at all stages of the projects – planning, delivery and roll out. It has been observed that there is a range in the level of engagement and practice with respect to partner management by DNOs and within DNOs and there is a need to consider and aspire to consistent best practice in this respect. PÖYRY MANAGEMENT CONSULTING October 2016 713_Poyry_Report_Evaluation_of_the_LCNF_FINAL_Oct_2016_v700.docx 64
AN INDEPENDENT <strong>EVALUATION</strong> OF THE LCNF Figure 18 – Project partner barriers and contribution: summary of questionnaire responses Range of parties • Academics, manufactures, SMEs, energy suppliers, non traditional vendors - e.g. transport sector, consultants, stakeholders Barriers • Requirement to demonstrate value for money • Requirement for project partner contribution – benefits to partners not always clear • High level of risk (reputational and financial) to partners • Appropriate treatment of IPR • Ability of DNOs to explain challenges to partners and other stakeholders • SMEs have limited funds for business development Project Planning • Initial innovation ideas • Design • Submission: authoring / reviewing / attending Ofgem meetings Project delivery • Contributing wider system knowledge / research • Support to DNO businesses • Solving challenges • Business case modelling / development • Data analysis / modelling / system support / tools & guides • Knowledge dissemination Roll-out • Landscape dependent • Important to prove methodology Partnering skills • Developed, but work in progress • All partners need to be on track to deliver • Partners can underestimate commitment required to fully deliver • Pressure of Successful Delivery Reward Criteria vs innovation • At times partners could be marginalised / not fully supported by DNO expertise • Development of good practice in innovation project management and delivery would be valuable • Guide for project partners would be useful – explanation of fund/ revenue • Open engagement / clear communication essential 4.4.3.3 Project success and suggested modifications The project partners and the general industry respondents commented on barriers to innovation and suggested a range of modifications in respect of governance of regulated innovation schemes and their place in the energy sector. Questions: Are you aware of any barriers that may have affected the outcome of the project? Barriers to project outcome were cited by 61% of respondents. Barriers to full innovation were noted throughout the project lifecycle associated with the initial governance constraints, the delivery constraints which are not ideal for innovation, and the existing PÖYRY MANAGEMENT CONSULTING October 2016 713_Poyry_Report_Evaluation_of_the_LCNF_FINAL_Oct_2016_v700.docx 65
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EVALUATION

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