Independent Challenge and Verification of DSO Strategy
17 February 2023
Independent challenge and verification of DSO Strategy
As UK Distribution Network Operator (DNO) prepared their business plan for the next regulatory price control (RIIO-ED2 covering 2023 to 2028) it was essential trust be obtained from consumers, network users and wider stakeholders through accurate, well-justified and regulatory compliant plans.
Preparation for delivery of the Distribution System Operator (DSO) role for RIIO-ED2 focussed on three main areas:
- Business Plan Development that focuses on strategy, methodologies, incentive design and our delivery plan for meeting and exceeding the baseline expectations that are required for ED2.
- Technical Development that focuses on architectures and discrete systems / projects for delivering the required functions and activities for DSO.
- Cost Assurance of the development of DSO costs and the DSO memo table
EA Technology was engaged to provide assurance of the Business Plan development activities in the DSO area along with assurance of the associated DSO costs.
EA Technology has extensive knowledge of the power sector and the challenges associated with the ongoing development of DSOs. This, alongside our experience of working with networks on the development of business plans and assurance across the industry, ensured an efficient and consistent project delivery.
To provide independent challenge to the DSO Strategy, EA Technology undertook the following activities:
- Testing and documentation of alignment with Ofgem RIIO-ED2 publications relating to DSO delivery.
- Independent challenge of the DSO plan.
- Baseline red-amber-green (RAG) assessment.
- Testing the DSO plan and associated costs for accuracy, ambition, and efficiency.
- Assurance of the DSO memo table and associated costs.This includes the DNO’s cost estimates and benchmarking against other DNOs.
EA Technology carried out an independent review of the DSO business plan narrative and DSO Strategy Annex against the baseline expectations set by Ofgem. This review was carried out on an iterative basis covering the draft submission documents and the final DSO Strategy against the updated Business Plan Guidance published by Ofgem in September 2021.
A set of categorised recommendations were provided to the DNO and following updates to the DSO Strategy these were confirmed to be completed. EA Technology provided an assurance report to which has then been included in the final submission of the ED2 business plan.
As power sector experts, with industry DSO experience, EA Technology was well placed to audit strategic plans and processes against the required benchmark standards. Utilising our Institute of Asset Management endorsed assessors who perform certification audits to ISO55000 ensured a rigorous and transparent methodology.
This project benefited from EA Technology’s:
- Knowledge of distribution network regulation in the UK and overseas
- Extensive power sector experience
- Assurance and compliance methodologies
- Experienced and consistent team
- Value focus to ensure efficient delivery
‟It is essential that as the way we generate and consume energy changes our distribution networks adapt to consider new and innovative business models. This project was a great example of bringing experience from across different industries and regions to ensure the delivery of ambitious business plan.”
Head of Net Zero Transition & Project Manager