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RIIO-ED2 business plans: DNOs confirm billions to support ‘profound change’

Image: Getty.

Image: Getty.

Distribution network operators (DNO) have laid out their business plans ahead of the forthcoming RIIO-ED2 price period.

Electricity North West (ENW), Scottish and Southern Electricity Networks (SSEN) Distribution, SP Energy Networks (SPEN) and Western Power Distribution (WPD) have unveiled billions of pounds of investment for the 2023 to 2028 price control period to help deliver smarter, decarbonised networks.

The companies have released drafts of their Business Plans for the period today (1 July) to enable further consultation ahead of the submission of the final plan to Ofgem, set for 1 December.

ENW rolling out Street Smart technology

ENW is set to invest £2.022 billion over the five years of the RIIO-ED2 price control period, an increase of more than £60 million on its pledge in its previous draft.

This will include funding the roll out the DNO’s 'Street Smart' technology to 250,000 customers in disadvantaged neighbourhoods. The technology makes continuous, small adjustments to local network voltage to reduce electricity usage and bills.

Beyond this, ENW will work to remove constraints for renewables allowing greater connection throughout its network area. This will also help ease the connection of an increasing number of electric vehicle chargers (EVs), heat pumps and other low carbon technologies (LCTs) in its areas. The DNO will additionally work on unlooping many of its domestic customers to ease the connection of LCTs.

“Our challenge during that time is a huge one: achieving stretching net zero and environmental ambitions, while keeping bills low and making sure we don’t leave anybody behind so everyone can benefit,” said Peter Emery, chief executive of ENW.

“Yet it’s thanks to the feedback of thousands of people and organisations across the region, and a lot of work on innovation and efficiency, that we have been able to find a way of doing that while only increasing the average household bill by less than the price of one high street cup of coffee each year.”

ENW’s full RIIO-ED2 business plan can be read here.

SSEN: being a net zero enabler and not a constraint

Over the five year price period, SSEN is planning to invest £4.1 billion in its network. With EV ownership forecast to increase from 30,000 today to five million by 2050, and 2.5 million heat pumps expected to be installed during the same period, the DNO will focus on accelerating flexibility to enable a growing number of grid connections and increased demand.

It has outlined six goals as part of its business plan, including reducing the frequency and duration of unplanned power interruptions by 20%, creating a foundation for net zero by investing £1 billion in strategic resilience and achieving a customer satisfaction rating of 9.2 or more.

Additionally, SSEN will work to support 200,000 vulnerable customers, enable the connection of an additional 1.3 million EVs and 800,000 heat pumps and reduce its own carbon footprint by at least 35%.

Of the total £4.1 billion, £400 million will be allocated to digitalising systems while £2.2 billion will be invested in asset reliability and resilience. The DNO will work to proactively invest in flexible solutions to add an additional 2GW of capacity to its network.

The need to transform the energy system has “never been clearer” said Chris Burchell, managing director of SSEN Distribution, adding that networks must work to be enablers rather than constraints in the transition to net zero.

“There will inevitably be a degree of uncertainty in the years ahead as energy policy and targets continue to accelerate, therefore it is essential that Ofgem supports us by providing an agile regulatory framework that helps deliver a network where customers can switch to EVs and other net zero technologies with ease at a time they choose.

SSEN’s full RIIO-ED2 business plan can be read here.

SPEN increasing capacity to enable EVs and heat pumps

SPEN is set to deploy £3.2 billion in investment over the five year period, to enable greater connection of EVs, heat pumps and low carbon electricity generation. It expects over 670,000 EVs, 370,000 domestic heat pumps and 5GW of low carbon generation to be connected to its network between 2023 and 2028.

Key to the network operators’ plan is the digitalisation of many of its operations, as part of a redesign it expects will save customers up to £60 million.

The company will work to deliver 1,117MW of additional network capacity, allowing for additional connection of electrified solutions in line with the priorities expressed by 15,000 customers and stakeholders.

A combination of six interventions will be used to add or manage capacity; flexibility services, energy efficiency, smart network interventions, network reconfiguration, enhanced network asset rating and network reinforcement.

In order to reduce the number of power cuts and ensure reliability, network upgrades will included increased looped services cables and a focus on low voltage networks.

SPEN’s RIIO-ED2 business plan is its most ambitious ever, said CEO Frank Mitchell.

“It’s also, perhaps the most important plan we have ever produced, developed at a time of profound change. The challenge that will touch every part of our society is to halt the effects of climate change. To do this, we need to achieve Net Zero carbon emissions.”

SPEN’s full RIIO-ED2 business plan can be read here.

Flexibility key to transition, says WPD

Following a two year consultation period that saw the DNO engage with more than 19,000 stakeholders, WPD has produced a £6.2 billion RIIO-ED2 business plan.

This investment will focus on creating a smarter, more flexible net zero network that will enable 1.5 million EVs in the company’s region to be connected as well as 600,000 heat pumps. It includes 45 core commitments, with priority given to commitments to provide vulnerable customer support, deliver a safe and resilient electricity network, net zero, community energy and flexibility markets.

WPD states it will develop the network to enable LCTs to respond to changes in volume by making capacity available and through data sharing. By utilising a mix of flexible connection and modelling, the operator was able to connect more than 24.8GW of generation during the previous price period onto a grid designed for 14GW of demand.

With a growing number of distributed assets – for example 1,600 EV connections are expected every working day – a predominantly automated approach will be needed to ensure consistent and reliable service. Flexibility from such assets will be delivered through supplier tariff signals and aggregation offers.

To date, WPD has contracted up to 456.5MW of flexibility across 56 constraint locations through a series of auctions, the most recent of which saw it secure 16.7MW in May.

It expects growth in the use of “pseudo power plants” – where by smart energy management of whole housing estates are used to balance the grid – to help provide flexibility services. The smart meter rollout must continue a pace to help provide a view of low voltage networks, increasing WPD’s ability to monitor the network. Following on from this, it expects open data to “open the door for organisations” to play a role in decarbonising the energy sector.

“Customers have said they want us to support net zero initiatives across our region but also to look at how we can reduce our own environmental impact,” said Phil Swift, WPD’s chief executive. “We will achieve this through a range of measures, which includes follow a verified science based target of 1.5°C to limit the climate impact to of our activities, while changing the majority of our fleet to non-carbon equivalents such as electric vehicles, and achieving zero waste to landfill.”

WPD’s full RIIO-ED2 business plan can be read here.

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