By Craig McTaggart, Head of Engineering – RIIO-T2
Since we submitted our RIIO-T2 Business Plan in December 2019, both the energy industry and wider landscape have clearly changed dramatically.
We’re of course working though the implications for our plans in both RIIO-T1 and RIIO-T2 but the safety of our customers, colleagues and our delivery and supply chain partners has been, and remains, our top priority.
The pandemic has delayed Ofgem’s open hearings that would have been a key opportunity for our stakeholders to challenge and hear more about our plans, so I wanted to take this opportunity to set out my thoughts and some of the points we had hoped to discuss in that forum in relation to maintaining a safe and reliable network.
How will we measure and report on our future plans for our business?
The majority of our transmission network was built in the 1950s and 1960s, so we’re at a pivotal stage its lifecycle as we look to play our crucial role in facilitating net zero.
There are clearly significant challenges ahead for the energy sector in making net zero a reality, but we’re clear that we must maintain exceptional levels of reliability whilst also minimising costs for current and future consumers in all of our planning and investment decisions. That’s why we’ve engaged constructively with Ofgem and fully support their proposals for more detailed reporting on our investment and maintenance activities.
Because of this increased focus, it can be difficult to compare our RIIO-T2 plans with the investment and maintenance activities we’ve carried out during the RIIO-T1 period as they have, in many cases, been reported on a different basis.
Helping to make things clear for our stakeholders
To help Ofgem and our stakeholders navigate these differences ,when we developed our RIIO-T2 business plan, that covers the delivery period 2021 – 2026, we also developed a comprehensive set of annexes with more information and analysis on key areas.
While I know there’s more detail than most people may want or need, to help make sure we were as open, honest and clear as possible we have published extensive details of our plans for our assets on our website, and published the like-for-like comparisons in in Annex 19 of our business plan (pages 9-13).
In these supplementary documents, we presented like-for-like comparisons of our investment plans in both the RIIO-T1 and RIIO-T2 periods. From this comparison, it’s clear there are different investment needs for the various types of network assets and equipment we have, but in the round, the level of activity we’re planning in the T2 period is comparable with what we’ve already delivered in RIIO-T1.
Delivering an efficient investment programme in 2021 - 2026
The cost to consumer is always at the heart of our investment and planning and we therefore go to great lengths to make sure all of our investments are as efficient as possible.
As part of developing our RIIO-T2 plans, we’ve undertaken a detailed design exercise to consider all the options for each project we’re planning, and have made sure that each project’s scope is well defined. All of this helps to make sure that the costs are minimised and wider benefits are well understood.
We also commissioned two independent consultants to test that we had completed robust optioneering and that the ‘unit’ costs of the selected project options were efficient relative to industry benchmarks. In short, we’re confident our business plan is efficient, well justified and minimises costs for consumers. If you’re interested in the details behind this you can find more details on page 34 of our RIIO-T2 Business Plan.
In a similar way to activity levels, the way costs are reported differs between RIIO-T1 and RIIO-T2 so we’ve provided a summary on a comparable basis on page 5 of the RIIO-T2 Business Plan. In there, it’s worth noting that our costs related to network reliability and resilience are higher than in RIIO-T1. However, this increase. This has been essential to maintain the world class levels of 99.9998% reliability that our network offers and to adapt to the ever-changing threats of climate change
Managing our assets and assessing risk
The application of monetised risk to the planning of lead asset interventions is another new aspect of RIIO-T2. This is a framework to allow the probability and consequences of the failure of each asset to be combined into a value of risk, enabling the comparison of risk between different types of asset.
We know that the methodologies and mathematical models used to help us plan are incredibly complex, so in Annex 19 of our plan we provided some easy-to-understand graphs of our intervention plans (on pages 4 to 8). These demonstrate that we have prioritised our interventions on the highest risk and poorest condition assets and in the appendix to the annex, we provide details of the health and risk measures of the individual assets. You can find more details of our network risk objective and a detailed breakdown of the asset risk data in Annex 3.
We’d like to hear your views on our plans. Details of how you can contact us are on our website.
I’m confident that our RIIO-T2 investment plans and activities are robust and well suited to meeting the challenges of a facilitating a net zero future as Britain strives to recover from the impact of COVID-19. I’m looking forward to the next steps in implementing these plans and encourage you to look out for further updates from my T2 colleagues, about other aspects of what we’re planning, over the coming weeks.
Craig
Craig McTaggart, Head of Engineering – RIIO-T2
Craig has 25 years’ experience in our Transmission business and is a Chartered Engineer. He specialised in protection and control, working in project design and delivery and subsequently was responsible for policy, acting as the company’s design authority. He was the lead in the SP Transmission and NGET joint venture for his area in the development of the Western Link, has represented the company in Cigré working groups and has led protection assessment for the Energy Networks Association. Most recently he was responsible for all transmission system development, the interface with National Grid System Operator, management of connections and strategic asset management.