Conclusions and next steps Appendix A: This section details these challenges and NGN s approach to managing them. In particular NGN wished to drive a rapid improvement in efficiency and performance, and identified a need to bring external commercial pressures to bear on as much of the business as possible.
In addition to these uncertainty mechanisms, there are also a number of smaller mechanisms proposed for each sector for example, a logging-up mechanism for bio-gas related expenditure in the gas distribution price controls.
Outputs focused at the heart of our plan is the commitment to the efficient delivery of specified outputs in RIIO-GD1; Stakeholder led outputs, levels of expenditure and the impact upon customer bills reflect the views expressed by our stakeholders; Strong incentives for efficient delivery the plan is based upon industry leading levels of efficiency and significant continuing productivity and service improvements; Requirement for innovation the plan includes a strategy for innovation to address the key challenges in RIIO-GD1 and into the future; and The need for change in the energy industry has been embraced by the Government and the extent of the challenge from climate change is widely accepted.
Important the design delivers VFM and facilitates investment in generation. Price control proposals Qualitative assessment against RIIO principles Adjusts the revenue a company is allowed to collect from customers according to changes in a specified price index e.
Its key interfaces are with day-today operations through the system control function, which acts as a primary source of network performance data, and with Programme Investment, where it provides analysis of asset data to drive optimal investment decision-making. We argue this brings inefficiency to energy markets in Britain, as suppliers and other network users, adopt strategies to manage this risk.
Section 4 Innovation strategy Innovation allows a company to adapt the way in which it delivers its services, reacting to a changing environment to ensure it continues to deliver optimal performance. Stakeholders and other representatives were also consulted within this research Performance Commitments PCs and Outcome Delivery Incentives ODIs — evidencing that customer and stakeholders actively participated and co-created to shape and influence their development within business plans.
We are responsible for the safe, continual delivery of natural gas to users, transporting the fuel over long distances, through towns and cities, into the homes and businesses of 2. Ofgem has outlined a commitment to managing charging volatility in the forthcoming price control periods.
Our expenditure plans, are explained in detail in this Section. Changes to RPI indexation approach will have relatively small impact on uncertainty of network charges.
Gas transmissions Revenue drivers for incremental capacity NWO revenues are adjusted according to the requirements for incremental entry and exit capacity. We therefore value stability and predictability we also believe that customers would prefer a world of stability and predictability As price controls will be set for eight years, Ofgem propose to include provisions that allow companies allowed revenue and therefore the charges they levy on users of the network to adjust during the price control period in response to changes in operating conditions RIIO tools and principles for managing uncertainty RIIO has a range of regulatory tools to help deal with uncertainty over the eight year price control.
Gas distribution proposals Repex policy Reopener would change charges within the price control. While there are benefits arising from Ofgem s proposals, we argue the proposals will create charging volatility for consumers RIIO handbook principles A number of elements of the RIIO framework help to deal with uncertainty, including tailored uncertainty mechanisms, risk sharing through incentives, the potential disapplication of the price control, and a defined mid-period review of network companies output requirements.
This plan is based upon a core assumption that gas and the gas distribution networks have a significant role to play in the transition to a low carbon economy and a potentially significant role in the energy mix of the future. We have continued to set frontier levels of performance and provide the standard by which other GDNs should be assessed.
NGN has a strong track record of delivering its commitments since This business plan is built directly upon the industry leading performance detailed above and delivers additional and continual improvement across RIIO-GD1. Potentially changing usage pattern of energy.
As the price control will be set ahead of when investment and operations take place that is, the regulatory framework is ex ante in design there will always be uncertainty about the reasonableness of the forecasts.
Cost of debt indexation NWOs revenue allowance will be adjusted mechanistically each year. Ofgem are proposing to apply mechanisms for managing uncertainty that will allow the network companies allowed revenue and therefore network charges to change within the price control period.
Remain aware of changing customer and stakeholder requirements. Given the level of uncertainty that exists on all these issues, there appears to be significant value in retaining the option for a high gas future both in the transition to a low carbon economy and also as part of the longer term energy mix.
Retailers therefore enter into contractual relationships and hedging strategies to manage risk. Ofgem s consumer factsheet monitors the different components and how regulatory policy might affect household energy bills.
The economic outlook presents a gloomy picture in the short and medium term. During periods of peak demand our network is transporting up to four times as much energy as the electricity networks in our region.
One of the key issues Ofgem is consulting on is the framework for dealing with uncertainty in the price controls.
Ofgem is proposing to apply mechanisms for managing uncertainty that will allow the network companies allowed revenue and therefore network charges to change within the price control period. Consequently, the capabilities of the gas distribution networks must be retained if the benefits identified above are to be delivered.
Maintain reliability of network. CEPA has been asked by Centrica to review Ofgem s proposals and to consider the options for providing more predictable network charges over the forthcoming energy network price controls. Achieving the expectations of our owners.
The RIIO approach is to consider what is controllable by the network company and so an ex ante revenue allowance and incentive can be set to promote the management of risk and what is not controllable either because the network company is unable to opt out of the activity, or the network operator cannot predict with certainty the expenditure over the next eight years.
This function takes the overall scope of work from Asset Risk Management and delivers investment as efficiently as possible. Outputs form the cornerstone of the RIIO price control framework. We have committed to delivering 51 outputs across 6 categories in RIIO.
The table below summarises our performance against these outputs, split between those that must be achieved each year, and those that are to be achieved over the eight year RIIO-GD1 period. Ofgem RIGs Data Tables. Text size: A A A. home > RIIO. Home RIIO ED1 Revised Business Plan. Main Business Plan Documents and Annexes.
RIIO-ED1 Commitment Report. All Asset Management Documents. Volume Justification. EPN Justification Documents. LPN Justification Documents. submitted business plans which Ofgem considered were sufficiently robust were awarded ‘fast track’ status.
As a result, thoseDNOs’ business plans were subject to less scrutiny and revision by Ofgem and their determinations were announced earlier than for other DNOs.
Regulatory challenges in the transition to a low-carbon energy system Dr Jeff Hardy Senior Manager, Sustainable Development thesanfranista.com-GD1 thesanfranista.comain future of gas. 4 Ofgem –Company business plans to be justified e.g.
benefits of. WPD RIIO-ED1 Draft Business Plan for stakeholder consultation Page 2 Foreword by Robert Symons, CEO, Western Power Distribution (WPD) Our business is a simple one. MISSION POSSIBLE: SUCCESSFULLY IMPLEMENTING TOTEX As many infrastructure owners face uncertainty about what the Totex challenge means for them, we explore what can be done to successfully.Riio gd1 business plans