Quantifying and demonstrating the benefits of SSEN’s innovation portfolio to Ofgem
All DNOs were invited by Ofgem to demonstrate the benefits associated with the innovation projects they had carried out under the Low Carbon Network Fund Tier 1. A discretionary award was available if the DNO could demonstrate that the projects had helped achieve financial and carbon savings and released additional capacity on the network.
EA Technology was commissioned by SSEN to independently review the benefits associated with the innovation portfolio. Using our leading techno-economic modelling tools and techniques, including the Transform Model, we were required to evaluate the performance of SSEN’s innovations and demonstrate how the application of these methods would save on future network expenditure when compared to conventional approaches, or indeed other innovations trialled by different DNOs.
EA Technology reviewed the various innovations pioneered by SSEN and constructed models of these approaches. We then analysed the future network expenditure required across Great Britain as customer loads change in future (through increased electrification of transport, for example). By quantifying the likely investment required to service this demand in the future, we developed a base case of necessary expenditure.
We then incorporated the innovations pioneered by SSEN through their portfolio into our modelling and repeated the analysis. By calculating the difference in expenditure from the base case, we could determine the amount of expenditure avoided though the use of these innovations. Further analysis revealed the extent to which capacity was released on the network through deployment of the innovative approaches.
Our analysis showed that SSEN’s innovation portfolio, which invested £4m in trialling these techniques, released a net benefit across Great Britain of £327m.
The findings from our analysis were presented to SSEN and formed part of the submission to Ofgem for the Discretionary Award, which would be judged by Ofgem’s independent Expert Panel.
Furthermore, EA Technology accompanied SSEN to the Expert Panel presentation and interview to discuss the methodology used and the benefits associated with the innovation portfolio.
The Expert Panel stated in their report that they regarded SSEN’s portfolio as “comprehensive and well-constructed” and that they found EA Technology’s work to calculate the benefits to be “extremely helpful”.
As a result, of the Expert Panel’s recommendation, Ofgem awarded SSEN a Discretionary Award of £2m; the largest amount awarded to any DNO for its innovation portfolio.
Andrew Roper, Director of Engineering and Investment at SSEN said: “Having an independent and robust assessment of our innovation portfolio from EA Technology was a valuable part of our submission. It allowed us to demonstrate to Ofgem the benefits to SSEN’s customers, and also to the wider industry and customers across the country. Once of the Ofgem innovation criteria is to show collaboration and sharing of knowledge; the joint presentation with Mark Sprawson of EA Technology clearly demonstrated this.”