Sustainable Commercial Model For Networks

Completed

Other Power and Storage Technologies(Electricity transmission and distribution)
Other Cross-Cutting Technologies or Research(Environmental, social and economic impacts)

Applied Research and Development

ENGINEERING AND TECHNOLOGY (Electrical and Electronic Engineering)

Not Cross-cutting
Sociological economical and environmental impact of energy (Other sociological economical and environmental impact of energy)

Project Contact
Scottish Hydro Electric Power Distribution plc (SHEPD)

Network Innovation Allowance

Ofgem

01 June 2013

01 April 2015

22 months

£499,000

Power

Scotland

Network Innovation Allowance

Project Contact, Scottish Hydro Electric Power Distribution plc (SHEPD)

The key objectives of the project are outlined below. Provide a method and software model for quantifying the contribution of Transmission projects to the wider Scottish and UK economy from direct, indirect and induced expenditure on network projects (demonstrated with a specific case study). Provide a method and software model for quantifying the social and environmental impact value to stakeholders from the construction of Transmission projects, by providing an effective commercial approach to stakeholder engagements at early stages with transparent case study of examples. Provide a method and software model for quantifying the incremental social, environmental and economic impacts of optioneering so that more information can be provided to stakeholders to support commercial decisions and their rationale (demonstrated with a specific case study). The success of the project can be measured by the financial quantification of the selected methodologies in the SCM by April 2015.

The lack of a clear and consistent commercial approach to quantify and analyse the social and environmental impacts of network developments alongside the economic costs and benefits and illustrate their quantification in a transparent way has led to overreliance on subjective interpretation by TOs and external bodies including planning authorities and potential objectors. This, in turn, has led to significant delays in projects while these impacts are debated, resulting in an increased cost to deliver infrastructure projects, borne by network customers. An example of this would be the Beauly Denny line which was delayed for 3 years while a Public Inquiry was held over the potential impacts of the transmission line on the Scottish Highlands. An estimated cost of £81m was agreed with Ofgem to mitigate the 73 planning consent conditions identified during the Public Inquiry; a cost to electricity consumers which could potentially be reduced in future projects from a refined assessment of the social and environmental impacts. SHE Transmission has internally funded an initial investigation in this area, including research to define the most material areas of social, economic and environmental impact from the construction of existing Transmission Developments. We have also established an advisory board of internal staff (SSE Group Finance Director, Director of Transmission, Sustainability Accountant), external academics (Prof Jan Bebbington, Prof David Collison, Dr Tim Cockerill and Prof Michael Grubb) and professional bodies (Scottish Environmental Protection Agency (SEPA), Institute of Chartered Accountants Scotland (ICAS), Institute of Chartered Accountants England and Wales (ICAEW), Accounting for Sustainability (A4S)) to ensure early stakeholder engagement. Based on this initial investigation and research, SHE Transmission intends to use NIA funding to progress the recommendations from initial investigation and research to: Develop techniques for quantifying the incremental costs and benefits to the environment, society and the wider economy of Transmission developments; Based on these techniques, develop and implement an analytical framework in order to provide a holistic understanding of the costs and benefits to the environment, society and the economy of Transmission developments - known as the "Sustainable Commercial Model" (SCM); and Trial the SCM in a network environment to illustrate potential application and merits to the GB networks. It is intended that the Sustainable Commercial Model will provide a consistent measure of the incremental environmental, social and wider economic impacts on network customers, to allow for more informed and consistent: Network Planning decisions; and Debate on how to analyse and communicate transmission project costs and benefit impacts. The SCM will use data from SHE Transmission’s share of the Beauly Denny line as a case study.Note : Project Documents may be available via the ENA Smarter Networks Portal using the Website link above

14/12/18