Electricity Networks in the UK operate as ‘regulated monopolies’ as it is recognised that it is not in the customer’s best interests to have multiple networks in any given area. In the absence of price competition, regulation is used as the key mechanism to review and shape the activities of network operators to protect the interests of their customers. OFGEM regulation sets maximum revenue levels and introduces various incentives and mechanisms designed to encourage effective, efficient and innovative operations.
This one-day course will introduce you to the regulatory process and demonstrate how you can use its mechanisms and incentives to deliver improved performance, better regulatory outcomes and increased profitability for your company within the set framework.
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Background to the Power Industry
- Overview of the privatisation process
- Power value chain
- Interaction between parties
- What is economic regulation?
- Why is it used?
- What behaviours can it drive?
- The role of Ofgem
RPI–X – The History of Networks’ Regulation
- Introduction to price controls
- RPI–X – the formula
- Regulated asset value
- Differences between regulatory
- Introduction of incentives
Interruptions Incentive Scheme (IIS)
- Case study looking using the IIS as an example of how regulation has evolved
Incentives, Innovation and Outputs – The new face of Network Regulation
- DPCR5 – initial moves
- RIIO framework
- Lessons from ET1 and GD1
Shaping projects to meet Regulatory Drivers
- Using a case study to demonstrate how shaping a project to target particular regulatory drivers can deliver enhanced value to a network company and its stakeholders
Questions and close
Programme may be subject to amendment
- Get a thorough understanding of how UK DNOs are regulated
- Understand your company’s regulatory obligations
- Learn how to shape your projects to deliver better regulatory outcomes
- Understand your company’s business model and how it makes money
- Understand how to align your activities with your employer’s strategic objectives
- Deliver higher profit margins within the revenue limits set by OFGEM