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Projects: Projects for Investigator
Reference Number NIA_NGET0153
Title Life Cycle Costing and Value Optimisation (ICase Award)
Status Completed
Energy Categories Other Power and Storage Technologies(Electricity transmission and distribution) 100%;
Research Types Applied Research and Development 100%
Science and Technology Fields SOCIAL SCIENCES (Economics and Econometrics) 50%;
ENGINEERING AND TECHNOLOGY (Electrical and Electronic Engineering) 50%;
UKERC Cross Cutting Characterisation Not Cross-cutting 100%
Principal Investigator Project Contact
No email address given
National Grid Electricity Transmission
Award Type Network Innovation Allowance
Funding Source Ofgem
Start Date 01 October 2014
End Date 01 April 2018
Duration 42 months
Total Grant Value £148,000
Industrial Sectors Power
Region London
Programme Network Innovation Allowance
Investigators Principal Investigator Project Contact , National Grid Electricity Transmission (100.000%)
Web Site http://www.smarternetworks.org/project/NIA_NGET0153
Objectives The objective of this project include: -Developing an approach which supports Whole Life Value methodology (WLV) including financial Life Cycle Costing incorporating CAPEX and OPEX spend across single asset replacement decisions or multiple assets in complex projects (schemes). Investigate whether a whole life value decision making process can provide valuable insight into financial options. Consistently incorporate consideration of risks. Enable the financial assessment across the Life Cycle of changes to Policies and Technical Specifications. Include carbon accounting and costing into the decision making process The success criteria for the project include: -Report on the state-of-the-art tools and techniques and challenges with a particular emphasis on quantitative and qualitative approaches. Report detailing National Grid’s activities in the context of leaders in the field A two-year plan of defined techniques to be evaluated for use in the WLVF and assets to be evaluated at pilot and exemplar levels to demonstrate proof of concept. PhD Confirmation Report Initial evaluation of qualitative techniques and their use in the NG framework. Structured approach for integrating quantitative and qualitative techniques in decision-making WLVF. Final literature review to demonstrate the outcome, results and findings from the project with proposals and recommendations to take forward.
Abstract National Grid is currently being challenged by the existing RIIO T1 arrangements to interrogate investment programmes and identify opportunities which require much more detailed and enhanced tools capable of assessing financial and non-financial data, including carbon and sustainability measures, stakeholder and customer satisfaction and risk appetite. Key challenges that this project will aim to overcome include; Devise a best practice guide to support National Grid develop strategies to measure and reduce carbon. Provide improved decision making methods which will help National Grid achieve value optimised investment decision making. Ensure that National Grid is incorporating intangibles like customer relations in its whole life value assessments. The cost of carbon becomes a very important consideration in the future life cycle costing decision making of assets as is the interaction of assets being located on our network due to environmental, risk and criticality measures. Being able to subtly understand cost implications over the long term will be very beneficial to the decisions making process of National Grid and contribute to our approach to RIIO T2. Research This project will create a consistent approach to determine whole life value and life cycle costing and provide a benchmarking opportunity to establish how National Grid applies these techniques and methodologies. This will be achieved by evaluating and reviewing appropriate techniques currently used within National Grid to identify opportunities to enhance our knowledge and contribute to improving the way National Grid makes whole life value decisions. The project will consist of the following six stages: -Work Package 1Review the literature on Life Cycle Assessment (LCA). Environmental Impact Assessment (EIA), Cost Benefit Analysis (CBA) and Through Life Costing (TLC) across sectors for long-life assets. Work Package 2Review of the existing Whole Life Value Framework (WLVF) and application of the LCA, EIA, CBA, TLC in the energy sector and more specifically National Grid. Work Package 3Define a methodology and approach to be used and identify exemplar asset(s) for use in the PhD. Proposed Life Cycle Cost and Value Optimisation - using quantitative and qualitative techniques. Work Package 4Undertake a pilot study using proposed techniques to assess available data, limitations and approaches and enhancements / feedback through stakeholder engagement. Work Package 5Evaluate the proposed approach for a subset of high-value assets and complete the PhD.Note : Project Documents may be available via the ENA Smarter Networks Portal using the Website link above
Publications (none)
Final Report (none)
Added to Database 10/09/18