In GB, Dan has advised a number of clients on market design and regulation issues. Dan has also worked extensively for National Grid on issues including managing the impact of interconnector ramping in the future, the design and implementation of a Network Development Plan, and the evolution of network security standards to facilitate wind integration.
The findings enclosed in this report may contain predictions based on current data and historical trends. Any such sp transmission riio-t1 business plan are subject to inherent risks and uncertainties.
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Ofgem is developing its approach amid lessons from RIIO-1, including suggestions that network companies have been earning unjustified high returns, as well as broader changes to the energy sector that are challenging previous regulatory axioms.
Customers and other stakeholders reasonably expect that network companies would only earn additional returns if they deliver exceptional performance. Evidence to date suggests that RIIO-1 has succeeded at incentivising network companies to better deliver outputs for customers.
Our analysis shows that high returns are, in part, a result of network companies improving their efficiency and their performance against output targets. Those are positives that reflect the ways in which the RIIO framework is working effectively.
Given the breadth and complexity of the framework, it is perhaps not surprising that there will be room to improve how the framework is implemented in future price controls by learning from RIIO We identified issues around the way the RIIO-1 price controls were implemented, and the risk-reward balance of those price controls, that have also made material contributions to the level of added returns for network companies.
Ofgem would need to address these issues in future price controls to provide customers with confidence that the charges they pay for network services reflects efficient costs.
So we framed our recommendations in terms of: Given the limited number of years available to inform our assessment, the views presented in this report represent a provisional view of the successes and failures of RIIO-1 price controls.
Likewise, considerations of the cost of capital and financeability are also out of scope. We expect both Ofgem and the network companies to be in a better position to apply the principles of the RIIO framework in future price controls. In conducting our review, we have relied primarily on data collected by Ofgem from the network companies.
We also surveyed the network companies for examples of how they responded to the introduction of the RIIO framework. CEPA has not independently verified the data provided by Ofgem nor the statements made by the network companies. The majority of network companies are forecast to underspend their totex allowances for RIIO These underspends do not appear to have come at the expense of delivering the required outputs, as network companies have generally improved their performance against output targets.
This points to improved efficiency on the part of the network companies. But we have also identified the following issues that suggest the framework can be improved: Application of the principles and objectives of the RIIO framework: We identified the following implementation issues that resulted in added returns for network companies in RIIO The conditions under which Ofgem might claw back any related underspend were not well defined.
Ofgem might not have been able to credibly set different allowances at the time, but it also did not build in mechanisms that would allow it to revisit allowances in light of new information during RIIO-GD1.
Additionally, GDNs may have been double-rewarded as activities funded under repex may have led to improved performance against the shrinkage and environmental emissions incentives.
As a result, a number of electricity distribution network companies DNOs were outperforming their targets from the start of the new price control period, resulting in returns that are not proportionate to the performance improvement.
|Electricity companies||The model sets out the agreed spend allowances for all eight years of RIIO, now with actual data up to March|
|CEPA Review of RIIO Framework and RIIO-1 Performance - Ofgem||None needed Possible need for new water resource. Water resources — deficit forecasts] d Water supply infrastructure funding and delivery 3.|
|Electricity - Construction||Furthermore, additional consented generation planned to be connected to the network over the coming years will lead to an unsustainable situation resulting in increased constraint payments.|
|Transmission Business Plan - SP Energy Networks||Transcription 1 To generators, shippers, suppliers, network companies, consumers and their representatives, the sustainable development community, investors and other interested parties Promoting choice and value for all gas and electricity customers Our ref:|
|For people who disagree with Scottish Power Energy Networks' Strategic Reinforcement Project||Low carbon electricity's share of generation increased from Are there any government policies, targets or incentives in place to encourage the use of renewable or low carbon energy?|
The RIIO-1 price controls expose network companies to some risks that are likely to be outside their control.
So far in RIIO-1 these risks have turned out favourable to network companies, resulting in added returns that are not due to improved performance. Delays or cancellation of the generation projects resulted in underspends and additional returns for the TOs.subject to RIIO price controls (RIIO-T1, which applies to transmission companies, and GD1, which applies to gas distribution, both implemented in ) Assess key elements of new framework drawing on Ofgems’ own approach to assessing companies’.
In transmission, the Scottish TOs may decide to compete for fast-tracking whilst NGET may consider itself too big to be comparable to the other TOs so may not entirely reveal its efficient costs in its initial business plan. He also advised on their RIIO-T1 business plan and return on equity submissions.
Dan has advised both big six players and government on the design of and participation in the GB capacity market. Dan regularly advises clients in France.
Responsible for the development of the UK Strategic Business Plan for National Grid, comprising both electricity transmission and gas transmission and ashio-midori.com: Workstream Lead, Legal .
Regularly formulate responses to regulatory and industry consultations and represent SP Transmission on various industry panels. Development of Commercial Policy in response to changing regulatory environment and to balance different stakeholder needs.
• Scenario Analysis to derive well justified business plan of worth £bn per year • Unit cost analysis for lead assets to support regulatory submission • Review of transmission procedure processes and perform gap analysisTitle: Senior Business Analyst at SQS .