National Grid plc · LSE:NG.
National Grid — National Grid Electricity Transmission — Investor Presentation (July 2018)
88 slides from National Grid's investor presentation, Jul 17, 2018
Slide 1: National Grid Electricity Transmission Innovation Workshop
National Grid Electricity Transmission Innovation Workshop
Slide 2: Welcome
nationalgrid Welcome
Slide 3: Housekeeping
Housekeeping nationalgrid
Slide 4: Agenda
Agenda Welcome and introduction With no boundaries, what do you think can be achieved? Break How does innovation work in RIIO-1? What has and hasn’t worked well? What are the focus areas suggested by Ofgem? What do you think we should focus on? Lunch How should we interact with our stakeholders? How
Slide 5: Safety Moment
nationalgrid Safety Moment
Slide 6: Introduction to National Grid
Introduction to National Grid John Wilson
Slide 7: National Grid: what we do
National Grid: what we do ▪ We are England & Wales Electricity Transmission (ET) ▪ We own, build and maintain the network ▪ We are also the GB Electricity System Operator (ESO) ▪ We balance the system and ensure that voltage and frequency are kept within acceptable limits ▪ Today’s workshop is about
Slide 8: Electricity Transmission
Electricity Transmission ▪ Our network operates at 400,000, 275,000 and ▪ What we don’t do: 132,000 volts ▪Generate electricity in the UK ▪ 45 power stations, 12 Distribution networks and ▪Own or operate UK electricity Distribution 3 interconnectors are connected to our networks network, along with
Slide 9: Household bill impact: electricity
Household bill impact: electricity *2016/17 figures
Slide 10: How we're building our business plans with you
How we’re building our business plans with you John Wilson
Slide 11: RIIO: the basics
RIIO: the basics
Slide 12: Current RIIO-T1 outputs
Current RIIO-T1 outputs Safety Reliability The environment Customer connections Customer satisfaction
Slide 13: Ofgem's key themes for the RIIO-2 consultation
Ofgem’s key themes for the RIIO-2 consultation Ensuring fair returns Responding to changes in how networks are used Giving consumers/stakeholders a stronger voice Driving innovation and efficiency Simplifying the price control
Slide 14: We have listened…
We have listened…. Consumer priorities… I want an affordable energy I want to use energy as and I want a sustainable energy bill when I want system …are delivered through our stakeholder priorities… I want you to provide a I want you to make it I want you to enable the reliable network, so that easy
Slide 15: Our Stakeholder-led approach
Our Stakeholder-led approach
Slide 16: Engagement topics
Engagement topics Other Topics ▪ Environment (28th June 2018) + Online Consultation ▪ Innovation (17th July 2018) ▪ Future of networks: Online Consultation w/c 23rd July for a minimum of three weeks. ▪ Security and resilience: online (July-August) ▪ Reliability: workshop, mid September ▪ Communities
Slide 17: Today's approach
Today’s approach ▪ The principle is that we talk for a bit, then you talk for a lot (and we listen) ▪ We won’t assume we know everything you’re interested in (car park) ▪ There’ll be chances to tell us if there’s something else you’d like to talk about ▪ And please leave your feedback at the end
Slide 18: Collecting your feedback
Collecting your feedback Julie Cook
Slide 19: First a quick test…
First a quick test… ▪ What was your main mode of transport this morning? 1. Train 2. Car 3. Motorbike 4. Bus 5. On foot 6. Bicycle 7. Plane 8. Something else 9. None of your business!
Slide 20: What was your main mode of transport this morning?
What was your main mode of transport this morning? 1. Train 10 2. Car 26 3. Motorbike 0 4. Bus 0 5. On foot 1 6. Bicycle 0 7. Plane 2 8. Something else 0 9. None of your business! 0
Slide 21: And to help us analyse your answers…
And to help us analyse your answers… ▪ Which of the following best describes you / your organisation regarding your role here today? 1. Customer, i.e. your organisation pays National Grid directly 2. Consumer interest organisation 3. Regulator or government (central or local) 4. Energy network owner
Slide 22: Which best describes you / your organisation?
Which of the following best describes you / your organisation regarding your role here today? 1. Customer, i.e. your organisation pays National Grid directly 1 2. Consumer interest organisation 0 3. Regulator or government (central or local) 0 4. Energy network owner or operator 3 5. University, thi
Slide 23: Knowledge of Electricity Transmission innovation
Knowledge of Electricity Transmission innovation ▪ On a scale of 1 to 5, where 1 is know nothing and 5 is know a great deal, how much would you say you know about National Grid’s electricity transmission innovation? 1. Know nothing 2. 3. 4. 5. Know a great deal
Slide 24: Knowledge of innovation poll results
On a scale of 1 to 5, where 1 is know nothing and 5 is know a great deal, how much would you say you know about National Grid’s electricity transmission innovation? 13 10 9 5 2 Know nothing 2 3 4 Know a great (1) deal (5)
Slide 25: Our impact on you
Our impact on you ▪ On a scale of 1 to 5, where 1 is not impacted at all and 5 is impacted a great deal, how impacted are you (or those you represent) by the topic of Innovation? 1. Not impacted at all 2. 3. 4. 5. Impacted a great deal
Slide 26: Impact of innovation poll results
On a scale of 1 to 5, where 1 is not impacted at all and 5 is impacted a great deal, how impacted are you (or those you represent) by the topic of Innovation? 19 14 5 0 1 Not impacted 2 3 4 Impacted a at all great deal (1) (5)
Slide 27: Future Energy Landscape
Future Energy Landscape Ursula Bryan
Slide 28: The components of the energy landscape are changing
The components of the energy landscape are changing
Slide 29: Our Energy Landscape
Our Energy Landscape The energy sector is undergoing a significant transition Political, economic, societal and technological trends impact the way in which we produce and consume energy SECURITY
Slide 30: Innovation drives change in behaviours
Innovation drives change in behaviours
Slide 31: What should our innovation ambition be?
What should our innovation ambition be?
Slide 32: Discussion questions
Discussion questions ▪ What do you think we should be focussing our innovation on in the future? ▪ What should be our top 3 focus areas? ▪ Think long term, beyond RIIO-2 (2026) ▪ No limitations ▪ How will consumers benefit? ▪ And how we should be doing this?
Slide 33: Feedback
nationalgrid Feedback _ _
Slide 34: Voting
nationalgrid Voting
Slide 35: Question 1
Question 1 ▪ Should utilities be incentivised to innovate on projects that potentially deliver value... 1. Within the current regulatory period 2. In future regulatory periods 3. Both of the above
Slide 36: Incentives to innovate poll results
Should utilities be incentivised to innovate on projects that potentially deliver value... 1. Within the current regulatory period 3 2. In future regulatory periods 4 3. Both of the above 31
Slide 37: Question 2
Question 2 ▪ Do you believe network utilities are investing sufficient resource in innovation activities? 1. Yes 2. No 3. Don’t know
Slide 38: Investment in innovation poll results
Do you believe network utilities are investing sufficient resource in innovation activities? 1. Yes 2 2. No 22 3. Don’t know 14
Slide 39: Question 3
Question 3 In a truly competitive market for transmission, what do you think a network company should prioritise? 1. Delivering value to their existing customer base 2. Delivering short-term value to their shareholders 3. Developing new products and services for existing customers 4. Growing their c
Slide 40: And second priority…
And second priority… In a truly competitive market for transmission, what do you think a network company should prioritise? 1. Delivering value to their existing customer base 2. Delivering short-term value to their shareholders 3. Developing new products and services for existing customers 4. Growi
Slide 41: And third priority…
And third priority… In a truly competitive market for transmission, what do you think a network company should prioritise? 1. Delivering value to their existing customer base 2. Delivering short-term value to their shareholders 3. Developing new products and services for existing customers 4. Growin
Slide 42: And fourth priority…
And fourth priority… In a truly competitive market for transmission, what do you think a network company should prioritise? 1. Delivering value to their existing customer base 2. Delivering short-term value to their shareholders 3. Developing new products and services for existing customers 4. Growi
Slide 43: And fifth priority…
And fifth priority… In a truly competitive market for transmission, what do you think a network company should prioritise? 1. Delivering value to their existing customer base 2. Delivering short-term value to their shareholders 3. Developing new products and services for existing customers 4. Growin
Slide 44: And sixth priority…
And sixth priority… In a truly competitive market for transmission, what do you think a network company should prioritise? 1. Delivering value to their existing customer base 2. Delivering short-term value to their shareholders 3. Developing new products and services for existing customers 4. Growin
Slide 45: Voting Result
Voting Result In a truly competitive market for transmission, what do you think a network company should prioritise? 1. Delivering value to their existing customer base 2. Delivering short-term value to their shareholders 3. Developing new products and services for existing customers 4. Growing thei
Slide 46: Break
nationalgrid Break
Slide 47: Results
Results In a truly competitive market for transmission, what do you think a network company should prioritise? 1. Delivering value to their existing customer base 2. Developing new products and services for existing customers 3. Meeting government targets 4. Delivering long-term value to their share
Slide 48: Voting
nationalgrid Voting
Slide 49: Which of these topic areas would you prioritise?
Which of these topic areas would you prioritise? Whole System – be open to more third party involvement & incentives, 1. consumer involvement. Better smart meters, future scenarios 2. Dynamic and Flexible – speed of innovation, internal policy 3. Balance of risk – incentive for others not just NGET
Slide 50: Innovation in T1
Innovation in T1 • Current framework • How much does it cost consumers? • How much does it benefit consumers? • Innovation results
Slide 51: We have 3 innovation mechanisms in T1
We have 3 innovation mechanisms in T1 Potential for Direct Potential to deliver Network Impact on the Network benefits to the customer Innovation Allowance Potential to § New equipment (including software) develop learning Network or Innovation § Novel application existing RIIO | T1 Competition equi
Slide 52: Network Innovation Allowance
Network Innovation Allowance What ▪ Nearly £1bn benefits delivered ▪ Use it or lose Life extension of a went range of protection £57m ▪ Management of IP well… relays ▪ Uncertainty after 2021 Factors affecting life expectancy of SGTs £76m ▪ Capability for academic What not support Online PD and CM £2
Slide 53: Network Innovation Competition
Network Innovation Competition What ▪ Increased upfront ▪ Competitive process went collaboration between partners ▪ Implementation well… ▪ New, ambitious projects ▪ Governance process ▪ Competitive environment What not so well…
Slide 54: Innovation Rollout Mechanism
Innovation Rollout Mechanism What ▪ Unsure (Used once by SPEN) ▪ Only two re-openers went ▪ Uncertainty over barriers to well… adoption What not so well…
Slide 55: Introducing the RIIO-2 Framework Consultation
Introducing the RIIO-2 Framework Consultation John Wilson
Slide 56: The Framework Consultation has 7 key innovation focus areas for RIIO-2
The Framework Consultation has 7 key innovation focus areas for RIIO-2 It may now be appropriate to re-focus support towards larger-scale, ‘whole-system’ orientated projects. 1 2 3 Companies will Stronger incentives Rewards good share more risk in place performance The balance of risk should be more
Slide 57: It is important to show RIIO-1 worked and we have RIIO-2 plans
It is important to show RIIO-1 worked and we have RIIO-2 plans to improve 4 6 5 Enabling increased third party engagement Demonstrate long-term value to consumers Drive the transition to BAU using the incentives ▪ System Operability framework ▪ Whole System ▪ Setting allowances for some activities o
Slide 58: Greater co-ordination with external funding streams
There is a drive to get greater co-ordination with external funding streams 7 Innovation Schemes (£4.8bn) £0.6 £1.2 £2.5 Low Carbon Innovation Research £0.5 BEIS Energy Innovation Programme UK Reseach & Innovation Industrial Strategy Challenge Fund
Slide 59: Summary of 7 key Focus Areas
Summary of 7 key Focus Areas 1. Network companies taking a greater share of the risk 2. Stronger incentives to innovate 3. Greater reward for innovation performance 4. Focus on long-term value for customers (system operability, decarbonisation, digitisation) 5. Enable greater third party involvement
Slide 60: Discussion
nationalgrid Discussion
Slide 61: Discussion questions
Discussion questions ▪ Discuss what are your initial thoughts on these priority areas? ▪ Do you agree with these? ▪ Is there anything else you believe is missing and needs to be considered? ▪ How would you rate these priorities and why?
Slide 62: Feedback
nationalgrid Feedback _
Slide 63: Lunch
nationalgrid Lunch
Slide 64: Voting
nationalgrid Voting
Slide 65: Question 5
Question 5 ▪ What do you think should be the priority areas of focus for RIIO-2? 1. Network companies taking a greater share of the risk 2. Stronger incentives to innovate 3. Greater reward for innovation performance 4. Focus on long-term value for customers (system operability, decarbonisation, dig
Slide 66: and second priority
and second priority ▪ What do you think should be the priority areas of focus for RIIO-2? 1. Network companies taking a greater share of the risk 2. Stronger incentives to innovate 3. Greater reward for innovation performance 4. Focus on long-term value for customers (system operability, decarbonisa
Slide 67: and third priority
and third priority ▪ What do you think should be the priority areas of focus for RIIO-2? 1. Network companies taking a greater share of the risk 2. Stronger incentives to innovate 3. Greater reward for innovation performance 4. Focus on long-term value for customers (system operability, decarbonisat
Slide 68: and fourth priority
and fourth priority ▪ What do you think should be the priority areas of focus for RIIO-2? 1. Network companies taking a greater share of the risk 2. Stronger incentives to innovate 3. Greater reward for innovation performance 4. Focus on long-term value for customers (system operability, decarbonisa
Slide 69: and fifth priority
and fifth priority ▪ What do you think should be the priority areas of focus for RIIO-2? 1. Network companies taking a greater share of the risk 2. Stronger incentives to innovate 3. Greater reward for innovation performance 4. Focus on long-term value for customers (system operability, decarbonisat
Slide 70: and sixth priority
and sixth priority ▪ What do you think should be the priority areas of focus for RIIO-2? 1. Network companies taking a greater share of the risk 2. Stronger incentives to innovate 3. Greater reward for innovation performance 4. Focus on long-term value for customers (system operability, decarbonisat
Slide 71: and finally seventh priority
and finally seventh priority ▪ What do you think should be the priority areas of focus for RIIO-2? 1. Network companies taking a greater share of the risk 2. Stronger incentives to innovate 3. Greater reward for innovation performance 4. Focus on long-term value for customers (system operability, de
Slide 72: and finally seventh priority
and finally seventh priority ▪ What do you think should be the priority areas of focus for RIIO-2? 1. Network companies taking a greater share of the risk 2. Stronger incentives to innovate 3. Greater reward for innovation performance Focus on long-term value for customers (system operability, 4. de
Slide 73: RIIO-2 priority areas of focus
▪ What do you think should be the priority areas of focus for RIIO-2? 1. Network companies taking a greater share of the risk 2. Stronger incentives to innovate 3. Greater reward for innovation performance Focus on long-term value for customers (system operability, 4. decarbonisation, digitisation)
Slide 74: Delivering the future energy system in the UK
Delivering the future energy system in the UK
Slide 75: Interactions
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Slide 76: The Innovation Landscape
The Innovation Landscape QUESTIONS Where does your organisation sit? What do you want from us? (funding, support, involvement) How do you think the various organisations, including us, should interact? What areas should we be innovating in and at what TRL level?
Slide 77: Voting Results
nationalgrid Voting Results _ _
Slide 78: Results
Results What do you think should be the priority areas of focus for RIIO-2? Focus on long-term value for customers (system operability, 1. decarbonisation, digitisation) 2. Drive the transition to business as usual 3. Stronger incentives to innovate 4. Greater reward for innovation performance 5. Ne
Slide 79: How should we continue to engage?
How should we continue to engage? ▪ Innovation is a key topic area ▪ We want to make sure we interact with you in the best possible way, to ensure that our plans deliver what you want Table discussion ▪ Please have a short discussion on your tables about how best to continue this engagement (channel
Slide 80: Close
nationalgrid Close
Slide 81: The final vote...
nationalgrid The final vote... _ _
Slide 82: Knowledge of innovation
Knowledge of innovation ▪ On a scale of 1 to 5, where 1 is know nothing and 5 is know a great deal, how much would you say you know about National Grid’s electricity transmission innovation? 1. Know nothing 2. 3. 4. 5. Know a great deal
Slide 83: Knowledge of innovation poll results
On a scale of 1 to 5, where 1 is know nothing and 5 is know a great deal, how much would you say you know about National Grid’s electricity transmission innovation? 13 10 6 1 2 Know nothing 2 3 4 Know a great (1) deal (5)
Slide 84: Our impact on you
Our impact on you ▪ On a scale of 1 to 5, where 1 is not impacted at all and 5 is impacted a great deal, how impacted are you (or those you represent) by the topic of Innovation? 1. Not impacted at all 2. 3. 4. 5. Impacted a great deal
Slide 85: Impact of innovation poll results
On a scale of 1 to 5, where 1 is not impacted at all and 5 is impacted a great deal, how impacted are you (or those you represent) by the topic of Innovation? 21 5 5 0 0 Not impacted 2 3 4 Impacted a at all great deal (1) (5)
Slide 86: What happens next
What happens next ▪ Our commitment ▪ We’ll process everything you’ve told us today ▪ We’ll summarise today’s event and send it to you ▪ We’ll use your comments to plan our future engagement activities ▪ We will present your comments to our stakeholder group ▪ We’ll keep you informed
Slide 87: To find out more:
To find out more: ▪ Join us at the Low Carbon Networks & Innovation Conference (LCNI) 16 & 17 October, Telford ▪ Follow us on LinkedIn Innovation at National Grid ▪ Visit our websites using the QR Codes: Deeside NGET Innovation website Ofgem consultation website ▪ Innovation .box.ETO.innovationteam@
Slide 88: Thank you
Thank you (and please leave your feedback!)
National Grid Electricity Transmission — Investor Presentation (July 2018) on 6ix