Why not navigate RIIO-T2 in a safe pair of hands?

Ofgem’s RIIO rollout is focused on providing real ‘value for money’ investments in the electricity network considering the impact on both society and our environment. How will network operators meet the challenge of its second phase: RIIO-T2?

Network operators challenged to make smart investment in future energy landscape

The UK’s electricity network operators are facing perhaps their greatest challenge to date as they navigate guidelines set by Ofgem in its RIIO regime. Mark Tiernan, Director of Substations, takes us through the objectives and implications of RIIO and its two regulatory phases: RIIO-T1 and RIIO-T2.

Driven by a requirement for fair pricing for energy consumers and the government’s decarbonisation targets, we look at the approach network operators should take and how Siemens can support them.

The RIIO Framework

Revenue = Incentives + Innovation + Outputs, or RIIO, is Ofgem’s performance-based challenge to the UK’s energy network operators to ensure energy consumers get network investment at a fair price. The Ofgem RIIO framework is split into two periods: RIIO-T1, a 8-year phase that runs from 2013 to 2021, and RIIO-T2 which takes up the next 5-year period from 2021 to 2026.

As electricity network operators gear up for the next regulatory period under RIIO-T2, we look at the challenges they face in providing value to the energy consumer, while they continue to deliver reliability across their networks.  

RIIO-2: increasing the challenges for network operators

RIIO-T2 builds upon the value drivers of RIIO-T1 and adds the incentive to deliver an improved electricity landscape by 2026 with better sustainability outcomes across the environment and wider society.

 

With decarbonisation as a driver, flexible energy networks are evolving with renewable sources playing an increasing role, coupled with energy storage technologies, and interconnectors. However, what is equally important is, our approach construction/operation to minimise our carbon footprint and deliver assets which are truly sustainable across multiple dimensions such as environment, supply chain, Skill development, along with making a positive impact in the communities in which we work. 

 

The question is: how to deliver this and keep costs to the consumer down?

The answer is: work with an expert partner

Siemens’ in-house expertise is proven. We have reliably demonstrated to our customers over the years that we’re able to find the most cost-effective solution in terms of their CapEx and OpEx. We’re now expanding our skills to solve the challenges of RIIO-T2 by designing ways - we’re constantly evolving our business to meet their needs. The combination of Siemens expertise and extensive portfolio of products enables a tailored customer solution from system study inception through to site installation and commissioning.

A case in point

When National Grid engaged Siemens to replace its AIS substation at Whitegate, with a new GIS substation it had a strong belief that the site would need to be extended.

 

Not so. By thinking creatively and designing the location of the new substation between two existing transformers within the substation fence line, our engineering team eliminated the need for extensive civil works beyond the site boundary which significantly reduced the overhead line and cabling requirements, saving National Grid over 25% of the projected cost.

The substation building was also much smaller and located closer to existing infrastructure which brought additional savings from the reuse of ancillary services. The programme was reduced, the outage schedule was simpler giving an increased security of supply.

 

As National Grid was keen to re-use some existing materials from another project, we incorporated this Third party equipment into our design and provided a seamless interface to Siemens’ GIS equipment outside the building. Our design engineers took the route of invention and developed an adaptor that would enable a successful connection between both sets of equipment. This adaptor has been type-registered and can now be used on other similar projects.

 

As an example of how Siemens can support network operators in navigating the challenges of RIIO-2, this project is exemplary. It reused equipment; it counteracted potential damage to the environment; it saved on investment; it involved innovation, creativity, and flexibility.

Adaptability and flexibility are the way forward

We are more dynamic in the way we work with our customers. We believe the future will be in the collaboration of a pool of contractors who share ideas to meet customer needs and deliver projects with flexibility and value for money. Utilisation BIM and 3D/4D/5D/6D modelling will allow optimisation and sequencing to come up with best way to use resource and materials.

 

The increase in renewable energy has introduced new challenges to network operators and Siemens products, including FACTS capability, (Flexible AC Transmissions Systems), ensures Siemens has the diverse product portfolio to address these challenges ensuring a more stable network for the consumer.

 

There is no one answer for how to meet the challenges of RIIO-2. We believe the technology we use, the efficacy of how we use our resources, how we plan and design our work and use our in-house expertise will support our customers to help them provide a more efficient, sustainable and cost-effective electricity network.

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