What we said we'd do
During the course of the year, NGET has shared with the ISG the central role they have been playing in the decarbonisation agenda, making investments that support the connection of new generation technologies, responding to changing patterns of demand and making progress towards Net Zero. We have noted the launch of ‘Great Grid Upgrade’, aimed at both ensuring a switch to clean energy and ensuring that NGET’s electricity network is fit for the future, carrying more clean, secure energy from where it’s generated to where it’s needed. All against the backdrop of a change in government and ongoing socio-economic challenges.
Against this background, the ISG has continued to work with NGET throughout the year to hold them to account on their RIIO-2 commitments. We have had the opportunity to review their performance scorecard at each ISG meeting and this culminated in a deep-dive in September into the key areas which stakeholders had highlighted as being of primary importance to them during the RIIO-2 business planning process.
On Asset Health, NGET shared the challenges they had encountered since Final Determination (FD) and how this has impacted their ability to fully meet the volume targets set in the FD for the Price Control Deliverables (PCD) and Network Asset Risk Metric. Although they are currently forecasting to deliver 81% of the RIIO-2 baseline volumes established, they have also undertaken additional work, necessary to enhance the resilience of the network, which is forecasted to bring them up to the equivalent of 96% of the T2 volumes. Despite this fact, however, because the work is not part of the specific interventions originally indicated by Ofgem for RIIO-2, it is not formally recognised, in terms of regulatory performance reporting. Nevertheless, from the perspective of system reliability and resilience, this is of great importance to consumers and stakeholders, and we are pleased to see NGET focus on outcomes over and above regulatory compliance. We do, of course, expect to see how NGET will seek to deliver the full RIIO-2 baseline volumes in due course.
The ISG remains interested in identifiable trends with regard to performance, noting for example, the difficulties in detecting year-on-year improvement in network availability, where performance sits around 99%, and also the areas where there is clear year-on-year ramp up, for example, on investment delivery. We noted positive trends in on workforce metrics, employee engagement and leadership.
Safety, however, has remained a key issue during the course of the year with NGET’s Lost Time Injury Frequency Rate (LTIFR) of 0.14 being above the level they set themselves to achieve. This is an area of focus for the ISG especially given the expectation to deliver, at pace, the infrastructure required to meet the Government’s Net Zero target by 2050. Safety cannot be compromised for pace, and we are reassured that NGET takes its responsibility very seriously. NGET has shared with us the steps they are taking to improve performance in this area, and we will continue to monitor progress.
Throughout the year, the ISG has regularly noted and discussed with NGET the challenges with connections, in the light of the significant increase in applications to connect to the network and the ongoing connections reform process, and any impacts on connection dates being offered to customers and to customer service generally.
On the Environment, the ISG is pleased to see that NGET is exceeding their targets on overall environmental impacts and that they will continue to focus on reducing SF6 emissions, in order to ensure delivery of RIIO-2 commitments.
We are pleased to see that NGET are on track to meet their societal commitments but note the need for a continued focus on diversity. However, over and above the delivery of RIIO-2 commitments, the ISG supports the wider, positive initiatives being delivered by NGET, for example, Grid for Good and Prompt Payment commitments.
Of course, the effective and timely delivery of the Accelerated Strategic Investment Programme (ASTI) is critical to our decarbonised energy future and the ISG has received regular updates on progress. Although ASTI was not in the RIIO-2 baseline , it forms part of the reporting to Ofgem..
Aside from monitoring progress on NGET’s RIIO-2 commitments, this year also saw us formally transitioning into the role of challenging NGET’s RIIO 3 business plan, making sure that it reflects what stakeholders and consumers need from the network, now and into the future. The early decision NGET took to make the group’s role an enduring one, subsequent to RIIO 2 business plan submission, has helped to make the transition into RIIO 3 business planning, a seamless one and we are pleased that NGET’s leadership remains committed to the process. NGET leadership attend all ISG meetings and the ISG Chair has regular meetings with key leaders and has attended the NGET Board meeting to discuss the key issues raised by the ISG.
To effectively deliver our role, we have recruited to not only refresh the membership of the Group, thereby ensuring a good representative balance of NGET’s stakeholders, but to also ensure we had the necessary expertise to robustly challenge NGET on delivering value for the consumer. I once again welcome all the new members who have joined us this year and remain extremely grateful for the contributions of all the members.
NGET has also continued to support, respect and commit to the Group’s independence, which is so critical to our role. We find NGET to be responsive to the ISG and open and transparent in the sharing of information which is of good quality and is timely and relevant. We will continue to deliver our remit to challenge NGET on behalf of stakeholders and consumers.