Part-funded reinforcement trial

We said we would run a part-funded reinforcement trial, communicate the outcomes and consider how we can make this a business-as-usual activity.

“RWE Innogy welcomes all measures to improve the competitiveness of the connections market. We endorse the proposals and are very interested in the part-funded connection trial outcomes. This seems like an excellent initiative to deliver the benefits of competition on cost to customers.” 
Fruzsina Kemenes, Innogy

In January 2011, Ofgem informed DNOs that it planned to consult on the possibility of extending the scope of competition in the electricity connections market to include part-funded connections. A national working group was established on this topic and Northern Powergrid has played an active role within the group, assisting Ofgem in issuing the consultation on ‘Competition for Part-Funded Connections Work’ in June 2011.

Following stakeholder feedback, Ofgem subsequently issued a ‘guidance and summary of responses’ and the working group was tasked with developing detailed proposals for a mechanism by which price control revenue could be made available to ICPs constructing part-funded connection assets. Again, Northern Powergrid played an important role in shaping this.

As a result of the progress made in the working group, in our 2015/16 ICE work plan we said we would develop and run a trial of part-funded reinforcement with an ICP. If successfully piloted and implemented as a business as usual practice, this would allow ICPs to quote for and carry out the reinforcement work on our network required to deliver a new connection and enable them to offer a wider turnkey package to their customers.

As this work took longer than first anticipated, we carried the action over into our 2016/17 work plan. We originally contacted all ICPs operating in our licensed areas, a total of 32 separate companies, inviting interested parties to a briefing session to explain the features of the part-funded reinforcement trial. We have since worked with a small number of ICPs to identify suitable schemes to try and conduct the trial and develop all the technical and commercial principles and processes required to make this a business as usual practice.

Unfortunately, during the last year, we have been unable, together with ICPs, to carry out the trial. Although we have not been able to test part-funded reinforcement works, we have completed the development of all of the technical and commercial principles and processes required to make this a business-as-usual practice. We remain ready and open for business to conduct the trial if any ICPs express an interest in a specific connections project.

As all the arrangements are in place we do not propose to carry this action forward for a third year into our 2017/18 ICE work plan, however, we will continue to engage and monitor the appetite of ICPs to carry out this work and act when appropriate.