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Reference Number NIA_CAD0078
Title FI-0017 - Exit Strategy Mechanism
Status Completed
Energy Categories HYDROGEN and FUEL CELLS(Hydrogen, Other infrastructure and systems R&D) 100%;
Research Types Applied Research and Development 100%
Science and Technology Fields SOCIAL SCIENCES (Business and Management Studies) 100%
UKERC Cross Cutting Characterisation Not Cross-cutting 100%
Principal Investigator Project Contact
No email address given
Cadent Central
Award Type Network Innovation Allowance
Funding Source Ofgem
Start Date 01 April 2022
End Date 30 September 2022
Duration ENA months
Total Grant Value £150,000
Industrial Sectors Energy
Region West Midlands
Programme Network Innovation Allowance
 
Investigators Principal Investigator Project Contact , Cadent Central (99.997%)
  Other Investigator Project Contact , Wales and West Utilities (0.001%)
Project Contact , Northern Gas Network (NGN) North East (0.001%)
Project Contact , SGN - Southern England (0.001%)
  Industrial Collaborator Project Contact , Wales and West Utilities (0.000%)
Project Contact , Northern Gas Networks (0.000%)
Project Contact , Cadent Gas (0.000%)
Project Contact , SGN (0.000%)
Web Site https://smarter.energynetworks.org/projects/NIA_CAD0078
Objectives This project will rely on several methods to identify the preferred approach for the exit strategy mechanism for the initial dialogue with consumers on the trial location in 2022 and how this can be further built on in the coming years as the project develops and the energy policy landscape invariably moves forwards to. The project will use the following methods: SWOT analysis: The initial phase will involve looking at all the relative strength and weaknesses of all known exit strategy mechanisms. An agreed framework for assessing the various exit strategies will be agreed to and then an assessment will be undertaken.Consumer Groups: Will be at the centre of the project. It is important that consumer groups are able to feedback on their thoughts with regards to the various exit strategy scenarios so that adjustments can be made as necessary to reflect consumer insights. Stakeholder engagement: Stakeholder engagement will happen throughout the project to ensure that all the facts are considered, and any key information is included within the analysis. Stakeholders engaged will be from both from the public and the private sector. This will be supported by the ENA through their existing gas stakeholder groups. Economic and Technical analysis: There will need to be a strong element on technical and commercial analysis to support the methodologies described above. Experts in these areas are going to be contracted into the project and will work alongside the GDNOs ensuring that the information being inputted into this analysis is correct and Measurement Quality and Data Quality will be supported by hiring professional organisations in to support the GDNOs on the project. Much of the work will be based on consumer perception so it is important that are representative population is used to reflect all possible views that could emerge.  This project is undertaken in 4 phases, which are: Phase 1: This first phase will involve looking at all the possible scenarios for exit plan. These should be taken directly from the GDNs inputs into the BEIS/Ofgem proforma and any further exit strategy scenarios as identified by the team. Once all possible scenarios have been identified, a Strengths, Weakness, Opportunities and Threat (SWOT) analysis should take place alongside consumer groups to identify the preferred scenarios and to discard the scenarios that do not work, with clear reasoning given as to why they are being discarded. When undertaking the SWOT analysis there should be an agreed criterion that the different options are being selected against to ensure a consistent approach is used. This selection criteria should be shared ahead of the SWOT analysis and consumer groups taking place with the GDNs, ENA and key stakeholder groups.  Phase 2: Once the SWOT analysis and consumer group feedback has been completed in Phase 1, Phase 2 involves taking 2 (or possibly 3 if necessary) of the preferred scenarios, scored against a clear selection criterion, and working these up in further detail. It is likely that weighting factors are added to the selection criteria, this will ensure that an objective way of down selecting scenarios is presented. This filter is likely to be a desk top based and done by the immediate project team to ensure that it can occur in a timely manner.  Once 2 (or 3) exit mechanism options have been selected and the different considerations compiled against each one a final preferred scenario should be selected. This againshould be selected from a pre agreed criterion that is agreed on by the GDNs, the ENA and any other stakeholders whose input is deemed important. If a single scenario cannot be selected, for whatever reason, then the reason for this needs to be made clear and well understood by all GDNs. The single scenario will be selected via a workshop with other GDNs and relevant stakeholders all inputting into the decision.  Phase 3: In phase 3, thorough analysis will take place on the preferred exit strategy and this can also be shared with BEIS/OFGEM for their feedback and hopefully eventual agreement. Once BEIS and Ofgem are content it will also be worth holding small consumer group research to ensure that the people who are representative of the people we are engaging with in the trial are exposed to the exit scenario to get their opinions. Phase 4: It is important that at pertinent stages within the Hydrogen Village projects that the exit strategy is reassessed as further technical, economic and consumer feedback information improves. As part of the project it will need to be identified when a final decision will need to be made and presented to Ofgem/BEIS for funding.  The objectives of the project are as follows:- Develop an exit strategy mechanism for initial consumer engagement - Develop a clearer understanding of all the potential exits strategy mechanisms- Identify what exit strategy mechanism could potentially be used in the future and identify what co-dependencies need to be resolved to enable these exit strategies to materialise- Can a detailed understanding of consumer positions and how this is reflected in exit strategies- Understand who and when exit strategy needs to be reviewed and when a final decision needs to be made and articulated to stakeholders and consumers
Abstract This project will look at the co-dependencies and consumer attitudes of the exit strategy mechanism from the Hydrogen Village project at the end of the trial period. It is unlikely that a finalised position can be reached in 2022 on what the preferred exit strategy should be but a clear steer to enable engagement within the hydrogen village community should be identified and then a process agreed for reviewing this position in-light of further developments should be detailed. 
Publications (none)
Final Report (none)
Added to Database 14/10/22