Summary of Distribution Network Operators Business Plans 2023 - 2028

17/12/2021

On the 1st of December, the UK’s Electricity Distribution Network Operators (DNOs) submitted to Ofgem and then published their business plans for the next electricity distribution price control (known as RIIO-ED2). This will run over the five year period between 2023 and 2028. Ofgem has issued a call for evidence for any stakeholder views on these business plans, information and a structure for responses can be found here. The deadline for this consultation is 7th February 2022 and we urge you to respond to this. 

Below is a summary of some of the key proposals, within each of these business plans, that could impact the community energy sector.  

Community energy hasn’t yet been seen as a core area of work for DNO’s, so Ofgem has not yet issued specific guidance on how to operate in this area. And so, each DNO has taken a slightly different approach. 

Generally, each of the DNOs has included proposals on three aspects affecting the community energy sector. These are the creation of funds accessible by community energy groups, improving community engagement including increasing the number of staff or additional training and increased sharing of data. The details of each of these proposals differ between regions. 

Electricity North West 

Electricity North West has expanded upon their ‘Community and local energy strategy 2020-2023’ report within their ED2 business plan. This involves expanding and enhancing the ‘Powering our Communities fund’ to the value of £1.95m across the ED2 timeframe. The proposed increments to increase the value of the fund per annum are as follows: to increase the fund from £75,000 to £150k in 2023, double to £300k in 2024, double again to £600k in 2026. They state specifically that this fund will only continue to increase in value provided there continues to be an oversubscription in order to meet the growing demand. 

Other areas of interest within Electricity North West’s business plan are the:

  • Creation of a new £1m delayed payment scheme for connections of community-owned low carbon technology.  
  • Provision of free, dedicated support service to help guide community groups in the development of their projects, applications for funding and the connection of their projects to the network
  • Recruitment of 3 new energy planning engineers to share knowledge, experience and data in network planning for the benefit of local communities, particularly ensuring a whole system approach is embedded into the LAEPs. 
  • Publishing of information on all network constraints to encourage potential solutions from all parties including community energy groups. 

Northern Powergrid 

Northern Powergrid has announced that the value of the communities propositions within their business plan will be £1.6m per year, which is a £1.0m increase on the spending during the current price control period. This will include the delivery of tailored social impact programmes for 50% of all major investment schemes which can support bespoke communities needs, enabling them to gain from benefits above and beyond the investment programmes.

Other areas of interest within Northern Powergrid’s business plan are:

  • Over the course of RIIO-ED2, the team of community-based energy advisors will grow from 2 to 6 employees, who, amongst other things, will help to bring forward more community energy schemes. They will have the technical expertise to support groups looking to develop and deliver community energy schemes and the advisors will also be able to deliver important public safety messaging related to new low carbon technologies.
  • Investment of £2.4m to recruit 6 local area energy plan advisors who will work in collaboration with local authorities and the wider energy sector to provide useful input and feedback to local authorities on their plans, including investing in upskilling external partners and collaborate with community groups to deliver a decarbonised future.
  • Creation of Open Insights, a self-service analytics toolkit which, amongst other things, will allow local authorities to use network data to plan for decarbonisation and identify the most cost-effective routes to deliver their plans, which may include localised community energy schemes. 
  • Expansion of the ‘community energy engagement offering’ including tailored support for community groups. 
  • Hosting of four local energy planning forums per year. 

Scottish and Southern Electricity Networks

Scottish and Southern Electricity Networks, within their business plan, announced the doubling of their ‘Powering Communities to Net Zero’ fund to £2.5m, £500,000 per year. This fund will support low-carbon technology-accessibility initiatives for those in vulnerable situations, and community-led environmental and resilience schemes. The scheme will work with charities and local community groups to ensure inclusivity, collaborate to ensure those who need it most are reached and will focus on community infrastructure rather than on individuals.  

Other areas of interest within Scottish and Southern Electricity Network’s business plan are the:

  • Help to 50,000 households, equivalent to 114,000 customers, with fuel poverty including leveraging community partnerships to connect with hard-to-reach customers.
  • Provision of incentives and support, partnering with local partners, suppliers and consultancies to provide financial incentives for the installation of low carbon technologies that could participate in flexibility markets. 
  • Creation of an open data portal that can be used by local authorities, community groups to enable whole systems collaboration. The system will include tailored local information packages and guidance and interpretation of the data, scenario and output modelling, advisory support to assist groups to identify, scope and improve the design of Whole Systems opportunities, support with applications for funding for projects, and ongoing technical support. 
  • Provision of dedicated support to develop Local Area Energy Plans for local authorities and key groups, and set up an Information, Advisory and Whole Systems Liaison Service to support local authorities achieve their net zero ambitions.

SP Energy Networks 

SP Energy Networks placed emphasis on the importance of community energy throughout their business plan including a whole chapter and accompanying Annex dedicated to their community energy strategy. The plan acknowledges the essential role community energy organisations can play in achieving a just transition both as established bodies that are able to administer and facilitate local ownership of energy schemes and as a trusted intermediary for the individuals and communities they are established to assist.

The business plan includes making 100 commitments which include: developing a network that’s ready for Net Zero, being the trusted partner for customers, communities and stakeholders and ready the business for a digital and sustainable future. 

SP Energy Networks propose creating a £30 million Distribution Net Zero Fund to support low-carbon projects, aligned to national, regional and local ambitions. 25% of this will be ring-fenced and allocated to kick-start community-led schemes. 

Other areas of interest within SP Energy Networks’ business plan are:

  • Creating a community energy team that will deliver on the commitments within the community energy strategy and ensure that community organisations and community energy strategies are embedded into planning and delivery activities. 
  • Complimenting the technical advice and support commitment by proactively communicating information including information on technology opportunities, local energy schemes and network flexibility. 

You can read their Community Energy Strategy here.

UK Power Networks 

UK Power Networks, within their business plan, made references to their commitment to supporting communities to decarbonise throughout and included a whole chapter on the topic in which it states that “it will be a failure if, in RIIO-ED2, people are not able to connect low carbon technologies quickly and easily.”

To support these references, UK Power Networks will establish a social fund, ‘The UK Power Networks Foundation’, with contributions by both the shareholder and employees of up to £4m for the duration of RIIO-ED2. This fund has a broad remit from supporting customers during power cuts, to helping communities decarbonise. 

Other areas of interest within UK Power Networks’s business plan are the:

  • Establishment of a £9.3m dedicated local area planning team, 20 full-time employees, that will work with all regional planning authorities, plus community energy groups and other local stakeholders, to assess their energy plans and develop actionable decarbonisation plans. 
  • Commitment to working with trusted parties to engage with local communities to spread the understanding of the need to transition to decarbonised heat and transport. UK Power Networks will ensure there is the capacity for 242,000 off-gas grid homes to transition both transport and heat away from fossil fuels by the end of RIIO-ED2. 
  • Provision of targeted support to a total of 500,000 fuel poor customers over RIIO-ED2, invest £18m to support over 200,000 directly and 300,000 through partnership programmes, delivering £67m of benefits by 2028. Additionally, provide fuel poverty information to 800,000 customers each year, working with trusted partners.
  • Exploration of the potential to develop community-based carbon offsets linked to energy efficiency schemes that address fuel poverty and consider links to biodiversity net gain credits and natural capital carbon sinks. 

Western Power Distribution 

Western Power Distribution has launched a social initiative annual £1 million ‘Community Matters’ support fund, to support and add significant value to local communities and to achieve positive community outcomes in relation to vulnerability, environment and education. 

A further £540,000 of funding has been set aside to help to establish, particularly community energy schemes, that install solar PV on 45 schools every year in areas of high economic deprivation to reduce their carbon impact and lower their energy bills, enabling the redistribution of savings to spent elsewhere on education resources.

Other areas of interest within Western Power Distribution’s business plan are the:

  • Pledge to connect at least 30 community energy groups to the network each year for the duration of ED2. This will build on the more than 100 community energy schemes connected to the network during RIIO-ED1. 
  • Employment of four new Community Energy Engineers who will support community energy groups to realise their great ideas for innovation approaches to benefit communities, including by facilitating their access to available funding streams.
  • Continued development of a wide range of accessible community energy themed guides including the ‘Connecting Community Energy’ guide. These will be supported by 60 community energy open surgeries per year and a dedicated WPD community energy representative to assist with connection and flexibility offers.
  • Provision of digital workshops to empower communities to maximise the value from data to deliver net zero. Highly granular and relevant data will be presented effectively to support local area planning processes.
  • Establishment of a volunteering scheme encouraging staff to volunteer at local community projects and the allocation of 1,000 staff volunteering days every year during RIIO-ED2.