EVALUATION

AN INDEPENDENT EVALUATION OF THE LCNF
assumption that the innovation benefit is limited to the DNO’s own network (unless a
second DNO has already indicated it will take forward a project as a ‘fast follower’ 53 ) – i.e.
this does not include benefits accruing to DNOs other than the project lead DNO.
The potential increase in benefits associated with innovation being adopted by other
DNOs – i.e. those beyond the ‘host’ DNO – is considered further in terms of ‘scaling
benefit’ in Section 5.3.3.
Our quantitative assessment of the LCNF benefits include both current benefits and future
benefits. This segregation of benefits has been designed to enable us to better
understand whether LCNF-driven innovative initiatives are making their way into the DNO
business as usual activity. Based on this assessment, Figure 22 shows that the current
benefits (i.e. those to 31 March 2016) are estimated to be £96m – which is equivalent to
approximately one third of the total funding.
Future benefits are estimated to be between £1.7bn and £2.3bn.
Figure 22 – Estimated benefits
3,000
2,500
Range of estimated Future
Benefits
2,000
Current Benefits
£ million
1,500
1,000
500
0
Benefits
Source: GB DNOs and Pöyry / Ricardo analysis
5.3.3 Scaled results
The estimated benefits presented in Section 5.3.2 are based on the assumption that the
innovation from LCNF projects is only taken forward into business as usual by the ‘host’
DNO – i.e. on the network of the DNO who trialled the project. However, one of the key
aims of LCNF (as set out in Section 4) is the knowledge dissemination and associated
learnings between the GB DNOs. This learning ought to enable a DNO to take forward
53
At least one DNO identified in its questionnaire response that it is in the process of rolling out
projects which have been developed by another DNO.
PÖYRY MANAGEMENT CONSULTING
October 2016
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