Utility Week

UTILITY WEEK | OCTOBER 2021 | 11 Interview A s we settle down in his office at Western Power Distribution's (WPD's) Gloucester depot, Phil Swi asks where we should start. It's a tricky question because 2021 has already been a momentous year for the electricity distribution network operator (DNO) for the Midlands, South Wales and the South West. In January, WPD became the first of the DNOs to publish a dra of its business plan. This was written during a period in which its future ownership had been a hot topic in the industry, with long-term proprietor PPL Corporation having put the business up for sale in August 2020. By the time a second, "more ambitious" dra plan was released at the end of March, that debate was settled, with National Grid having offered £7.8 billion to gain "a significant scale position in UK electricity distribution". This is not to mention the ongoing challenges of maintaining lifeline services for eight million customers during a global pandemic. If Swi feels the pressure he is certainly not showing it and professes that this is "the most exciting time of my career". It is a journey that stretches back to 1992 with SWEB, which formed out of the privatisation of the South West- ern Electricity Board two years earlier. Swi worked his way up the ranks from an engineer to eventually become part of the team that oversaw the transition of SWEB to WPD and the acquisition of networks in South Wales and latterly the Midlands. He took over as chief execu- tive in 2018 aer five years as operations director. He reflects: "My son is at university now and I've always wondered whether he would join the electricity industry. To be honest, in the past I'm not sure I could see why he'd want to – it was very much things being done in the way they always have. "But if you look at the pace of change now, I think it's one of the most exciting places you could be. Just look back to the start of ED1 and the things we weren't even talking about – the distribution system operator (DSO), connecting renewables to the system, the flexibility services we provided, the dispatch platform we created. Just imagine where we'll be at the end of this decade." Hypothesising on how the 2020s will pan out is, of course, at the absolute heart of the business planning process for the RIIO-ED2 price controls for 2023-28. It's a challenge that each DNO appears to have approached in a slightly different way. WPD has devel- oped a base case, in addition to modelling a range of scenarios to develop a WPD "best view". As an illus- tration of the range of scenarios considered, WPD's business plan cites the potential need for expenditure to increase 102 per cent to achieve a "Leading the Way" scenario or to reduce by 45 per cent under a "system transformation" model. WPD's proposed base line expenditure of £6.2 billion over the five years is an increase of 18 per cent on the average for ED1 and would result on paper in an increase of £1.52 on the average domestic bill. However, aer efficiencies and other factors are baked in WPD expects bills to be flat. Swi says: "I really am confident we're in that right bandwidth. I'd be surprised if the pace was slower and I'd be really surprised if it was faster." At the centre of WPD's plan is the assumption that uncertainty mechanisms will be needed to unlock further funding throughout the price control period. Its business plan sets out the design for its own uncertainty mechanism, which Swi says has prompted positive feedback from both Ofgem and other DNOs. continued overleaf

• Cover