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Chapter 3

Provide value for money

We are proposing to spend £7.1bn over the five years of this plan in the baseline scenario. This is the sum of our operating costs and capital investment to deliver the range of priorities that stakeholders want.

Our plan embeds efficiencies from the T1 period and contains future efficiency commitments

We recognise that budgets are tight, and we have challenged ourselves hard during the current period to reduce our costs, ensuring we embed those into our T2 plan, as well as making further efficiency commitments for the future T2 period. 

To ensure we remain efficient over the T2 period, we have also committed to efficiencies in five areas. ​​These future efficiency commitments add up to a further £383m of savings. 
 

Our costs benchmark well for efficiency

Our network capital costs, the operating costs of running the business and our IT investments have been independently benchmarked by specialist organisations and we are in line with or better than current benchmarks. 

This chapter demonstrates our costs are efficient and that we will provide value for money for consumers in the T2 period.

Business Plan Chapter
IT Investment Decision Packs

Investment decision packs set out the technical need case, options assessed and proposed investments.

IT investments relating to transmission asset management systems

IEMS (SCADA) Replacement

Ellipse 

IT System Health Replacement

IT Transform 

IT investments relating to business-wide systems

Hosting

Business Services 

Enterprise Network Refresh

End User Compute 

IT Operations and Tooling

The cost benefit analysis below demonstrates the investment modelling for supporting our decision through various options considered. 

Cost benefit analysis on Value For Money

IT Annexes

ET IT Investment
Strategy and approach for our Transmission Network Asset Management IT investments

IT Strategy
Describes our overall IT strategy and approach within which our proposed business wide IT investments sit

 

Cost Annexes

Direct Opex Benchmarking (ITOMS)
A summary of our direct opex benchmarking, which is based on the International Transmission Operation Maintenance Study (ITOMS). The study covers inspections, maintenance and repair activities, and is also beginning to capture asset replacement activities and trialled overhead lines investments. The ITOMS program is a closed confidential forum where more than 31 companies representing 25% of electricity transmitted across the globe share information, practices, policies, processes and plans to compare efficiency, system performance and operational costs.

Delivering competitive value through Procurement 
Our approach to driving competion in the procurement of goods and services

RPE & Future Efficiency 
Our forecasts and proposals for managing above inflation effects (Real Price Effects) and productivity improvement commitments

Business Support Benchmarking Hackett
Shows how our business support functions costs benchmark against comparator organisations

Total Opex 
Analysis and explanation of our total operating cost forecasts

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