Review of Great Britain Innovation Projects
19 January 2022
In Great Britain (GB), the regulator Ofgem requires electricity network operators to submit innovation strategies ahead of their RIIO price control periods. In these, each network sets out the challenges it predicts it will face over the coming price control, how it intends to use innovation to address these, and how that innovation will provide value for money for consumers.
EA Technology has recently undertaken a review of GB network operators’ innovation strategies for RIIO-1 and RIIO-2. This was for a distribution network operator interested in applying learning from innovation projects across GB distribution network operators (DNOs) and transmission owners (TOs) to resolve some of their specific network challenges.
Themes in the Innovation Priorities
The review of innovation strategies focussed on identifying high-level priorities for innovation. This was not straightforward as there are no set criteria for what makes an aspect of a network operator’s innovation strategy a ‘priority’ different terminology used in different network operators’ strategies.
37 priorities were identified in total across networks’ RIIO-ED1, RIIO-ED2, RIIO-T1, and RIIO-T2 strategies. To attain a broader view and extract more actionable insights these priorities were, after examination and comparison, grouped into 8 broad themes.
- Network Monitoring and Data.
- Connections, Network Capacity, Distributed Energy Resources (DER) and Low Carbon Technologies (LCTs).
- Customer Participation and Demand-side Response (DSR).
- Customer Satisfaction and Bills Reduction.
- Whole System Integration.
- Business Operations.
- Asset and Fault Management.
- Society, Environment and Net Zero.
Following this overall analysis, further work was undertaken to bring out the volume and content of the GB network operators’ priorities for RIIO-1 and RIIO-2 and compare them, to show the changes taking place: Which themes are changing prominence and what emphasis shifts there are within themes in RIIO-2 because of learnings from RIIO-1.
For the Network Monitoring and Data theme, the number of priorities is increasing from RIIO-1 to RIIO-2 for both DNOs and TOs and the emphasis within the priorities is shifting from collection of data to use of data. This shows the progression of previous innovation into business-as-usual processes. It is also notable that for this theme there is alignment across DNOs and TOs in terms of their priorities.
More priorities are placed by DNOs on the Connections, Network Capacity, DER and LCTs theme in RIIO-ED2 than RIIO-ED1. In terms of innovation DNOs are also shifting from seeking to release network capacity to use this released network capacity for new connections, again showing the progression of previous innovation into business-as-usual process. For TOs there is a reduced number of priorities, as may be expected due to DER and LCTs having less direct impact on transmission than distribution networks and so being less relevant.
Fewer priorities are placed by DNOs on the Customer Satisfaction and Bills Reduction theme in RIIO-ED2 than RIIO-ED1. Instead of priorities having more generic wording and thus aligning with this broad theme, DNOs are being more specific about how customers will be kept satisfied or how customer bills will be reduced through innovation, for example through LCT connection (under the Connections, Network Capacity, DER and LCTs theme) and participation in services (under Customer Participation and DSR).
For the Whole System Integration theme, the number of priorities increases between RIIO-1 and RIIO-2 for both DNOs and TOs, albeit starting from a lower RIIO-1 number of priorities than the other themes. This shows Whole System Integration to be a more emergent theme. Furthermore, the content of the priorities is aligned across DNOs and TOs, referring to both transmission-distribution and cross-vector integration.
EA Technology provided our client with a thorough review of the innovation activities and learning that has taken place across GB and how these could be leveraged to overcome their specific network challenges. This was possible due to EA Technology’s unique position of strong electricity network knowledge, understanding of the challenges facing electricity networks as a result of the energy industry decarbonisation and successful delivery and deployment of a range of innovation projects.
If you would like to find out more regarding this project or the work we are doing to support our clients make informed decisions to accelerate their own decarbonisation speak with David Mills, Head of Net Zero Transition.