Our consultancy team has a detailed understanding of existing power and gas networks and their future direction, ranging from network company business models to generation and demand connection arrangements and corresponding ongoing network charges. We are able to utilise this expertise to support:
- Incumbent network companies with business planning, future-proofing and innovation, including flexibility procurement
- Independent and private network companies with market entry, growth and regulatory challenges
- Generation operators connected to and developers seeking connection to the networks, helping them to understand the impact of network costs and benefits on their cost and revenue stacks
- Demand users, helping them to understand their current and likely future network costs
- Suppliers in developing tariff offerings for their customers
Case study
Independent Transmission Operator support
Independent Distribution Network Operator | 2022
A licenced Independent Distribution Network Operator was seeking to understand the legislative, regulatory, code and charging arrangements that could be applicable to a hypothetical independent transmission owner (ITO). The client already designed, owned and operated distribution networks in the UK but was interested in providing similar service at the transmission network level.
We supported them by first providing a summary and red flag review of the key relevant elements of the System Operator – Transmission Owner Code (STC) and Connection and Use of System Code (CUSC). We also provided a review of the Standard Licence Conditions (SLCs) of the Transmission Licence, including suggestions for raising revisions as part of the client’s application. Finally, we outlined the provisions for new potential customers and an explanation of the charging methodology.
Our support allowed the client to understand the regulatory requirements and next steps that they would need to take to deliver an innovative new business model for network users.
Case study
EV charging cost assessment
Motorway service station operator | 2022
A leading UK motorway service station provider needed to understand what their potential ongoing use of system cost would be for deploying additional electric vehicle (EV) charging infrastructure to meet expected future demand.
Cornwall Insight was commissioned to support the client in understanding the charges they would face and to provide a forecast of the network charges associated with the EV charging capacity across all their sites. We did this under a range of scenarios for take-up of EV charging, including with a focus on evaluating the impact of under-utilising these network connections in the near term, whilst EV charging demand ramps up.
This work allowed the client to understand the wider cost implications of developing its EV charging capability. They were then able to compare these against the value of deploying the capacity upgrades, the potential initial financial support from Government available for the upfront CAPEX portion of the costs and assess cost effective ways of upgrading network connections to meet EV charging need at their sites.
Case study
Private network support
Large industrial user | 2022
We were approached on behalf of the owner of an industrial park who provided its customers with a range of utilities, including steam and electricity. The park owner was in the process of renegotiating prices and was concerned that some of their customers may look to reduce or avoid supply from them by seeking supply by third parties through connecting to the public grid. They were particularly interested in their obligations to customers and the compliance and regulatory processes they would need to go through.
We supported the park owner in two phases. First, we held a workshop where we gave an overview of private network regulatory arrangements, discussed options for setting network charges and explained the pros and cons of each type of network charging tariff arrangement. This supported the customer with the necessary information and guidance to make a decision on the most appropriate charging methodology.
The second phase was provision of a formal Use of System charging methodology. For this we produced a methodology, a report describing the options and the process of considering and selecting a preferred option through the first phase, and a workbook that produced charges for all onsite users based on the agreed option. We also provided regulatory documents for submission to Ofgem.
Our support enabled the client to be confident that it was compliant with applicable regulations and could continue to engage with its customers positively.
Case study
Assessment of gas shipping options for new entrant suppliers
Confidential | March – April 2020
The Cornwall Insight team was engaged to undertake a review of the different options open to gas suppliers entering into the GB market to fulfil their gas shipping requirements.
As part of the project Cornwall Insight identified the routes open for gas shipping, including outsourcing to specialist providers, taking the activities in-house, and specialist IT solutions. For each of these, qualitative and quantitative analysis was conducted, including on the regulatory obligations, internal resource requirements, and external costs. These were used to undertake an assessment of the costs of the different options, including at set-up and on an ongoing basis, in order to provide analysis of which option was more suitable at market entry and at what point economies of scale supported a move to in-house delivery.
This project was delivered using Cornwall Insight’s understanding of the regulatory and operational requirements of gas shipping, the level of gas network charges, market-entry costs, and gas operational processes. Additionally, Cornwall Insight used its extensive stakeholder relationships to validate assumptions with relevant industry parties. Finally, a knowledge transfer workshop was used to ensure understanding and delivery of insight.
