Utility Week

UTILITY WEEK | JANUARY 2022 | 23 Networks SP Energy Networks has requested totex allowances of £3,270 million or just over £654 million per year. This represents a more than 28% increase over the yearly average for actual and forecast expenditure during ED1 of £510 million. The total is down slightly from £3,234 million requested in the dra† business plan. The headline ˆ gure includes £153 million of embedded e‰ ciency but not on going e‰ ciency improvements of £48 million – or 0.5% per year – which lowers the total to £3,222 million. It also excludes real price eŒ ects. The business plan assumes the con- nection of 1.8 million electric vehicles and 1.1'million heat pumps by 2028. There is £445 million of load-related expenditure, with the yearly average more than doubling from around £45 million in ED1 to just shy of £89 million. Non-load-related asset replacement and refurbishment is £584 million or almost £117 million per year. The latter is up by more than 19% from around £98 million per year in the current price control period. SP Energy Networks said its average con- tribution to domestic energy bills would fall from £104 over ED1 to £91 over ED2 for cus- tomers in its Scottish licence area but rise from £124 to £131 for customers in the North East and North Wales. Electricity North West has requested totex allowances of roughly £1,791 million. The annual average is slightly more than £358 million – a 33% increase over the yearly aver- age for forecast and actual spending during the current price controls of roughly £267 million. The total is down from £2,033 million in the dra† business plan, primarily due to signiˆ cant reductions to both load-related expenditure and non-load-related asset replacement and refurbishment. The headline ˆ gure does not include real price eŒ ects but does include £112 million of bespoke programmes, the exclusion of which lowers the total to £1,678 million. The DNO said this ˆ gure – equating to an annual average of £336 million or a 25% increase in yearly spending – provides a more like- for-like comparison with the other business plans. The ˆ nal plan assumes the connection of one million electric vehicles and 120,000 heat pumps by 2030. Electricity North West has requested almost £138 million of load-related expendi- ture. This equates to around £28 million per year – almost double the ˆ gure for the cur- rent price control period of around £15 mil- lion per year. However, this is down from £212 million – or £42 million per year – in its dra† business plan. The DNO has requested roughly £289 mil- lion for asset replacement and refurbishment or almost £58 million per year. This repre- sents an increase of 17% when compared to the yearly average of £49 million for ED1. The total is down from £372 million – or £74 mil- lion per year – in the dra† plan. The business plan assumes ongoing e‰ - ciency improvements of £59 million – or 1% per year. Electricity North West said under the plan its average contribution to domestic energy bills would fall from £89.75 over ED1 to £77.26 over ED2. Western Power Distribution (WPD) requested totex allowances of £6,679 million. The annual average of £1,336 million represents a 27% increase over the average for forecast and actual expenditure of £1,050 million during ED1. The headline ˆ gure includes real price eŒ ects of £309 million and ongoing e‰ ciency improvements of £95 million, without which the total is £6,465 million. This is signiˆ cant increase from the equivalent ˆ gure from its dra† business plan of £6,064 million. This is despite reductions to both network reinforcement and non-load-related network investment since the dra† . The former is down from £999 million in the dra† business plan in July to £946 mil- lion – or £189 million per year. The new ˆ g- ure represents a more than doubling of the yearly average for ED1 of £91 million. Non-load-related network investment is down from £1,877 million in the dra† plan to £1,842 million – or £368 million per year. The new ˆ gure represents a 15% increase when compared to the ED1 yearly average of £320 million. The ˆ nal business plan is intended to accommodate at least 1.5 million additional electric vehicles and 600,000 extra heat pumps. WPD said the plan includes £723 million of embedded e‰ ciency savings in addition to the aforementioned £95 million of on going e‰ ciency improvements – or 0.5% per annum – during the course of ED2. WPD said the plan would see its average contribution to domestic energy bills across its license area fall from £91.62 in 2022/23 to £89.51 over ED2. UK Power Networks has requested totex allowances of £4,639 million or £928 million per year. This is a nearly 10% increase over average forecast and actual expenditure dur- ing the current price control period of £847 million per year. It is up from £4,393 million in the dra† business plan. The headline ˆ gure incorporates on going e‰ ciency improvements of £233 million – or 1% per annum – but excludes real price eŒ ects, which UK Power Networks said it expects to increase the overall total by £231 million to £4,839 million. Load-related spending is up by more than half from £77 million per year in ED1 to £117 million per year or £583 million in total. This is also a slight increase on the £527 million requested in the dra† business plan. Non-load-related replacement and refur- bishment is up by 42% when compared to ED1 from £104 million per year to £148 mil- lion per year or £740 million in total. This is a much more substantial rise from the £605 million requested in the dra† , accounting for a signiˆ cant proportion of the totex increase in the ˆ nal business plan. The ˆ nal business plan is built around a scenario in which there are 2.6 million electric vehicles and around 300,00 heat pumps in the company's license areas by 2028, although it put great emphasis on how spending could Ÿ ex in response to emerging developments. The company said the plan would see its contribution to average annual domes- tic electricity bills for customers across its licence areas fall from £93 over ED1 to £79 over ED2. Tom Grimwood, news editor

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