RIIO-T2 Business Plan Annexes Below are Annexes and Digitisation Strategy in support of our RIIO-T2 Business. For clarity we have also produced a summary document of the publication status of our Annexes and Supporting Documents. Annex Publication Summary Annex Publication Summary For clarity we have collated a complete list of all documents submitted in support of our business plan to Ofgem. Due to the sensitive nature of some of this information we cannot publish all of the documents in full. The summary document provides a publication status of this vast volume of supporting information. We have fully published the large majority of information however, where we have published a redacted version or not published a document we have provided an explanation. The engineering justification tab also acts to provide a full list of our named projects collated together. Annex Publication Summary Annex 1: Investment Packs Annex 1: Investment Packs Engineering Justification papers have been provided for all of our major expenditure areas, and where relevant a Cost benefit analysis to show the financial appraisal of different options considered. Engineering Justification Papers Cable Major Refurbishment Programme OHL Minor Refurbishment Programme Various GSP Reinforcement schemes Flood Mitigation BW route 132kV major refurbishment Civil Structure Refurbishment Programme Building Refurbishment Programme Refurbishment of Oil Bunding & Drainage Systems Cockenzie Building Improvement Works Partick Grid Site Rationalisation Glenlee to Tongland Modernisation AC route 132kV major refurbishment XH & XJ routes 400kV Major Refurbishment Currie-Gorgie 132kV cable replacement Cable sealing end proactive programme Strategic Spares AY route 132kV major refurbishment Gorgie-Telford Road 132kV cable replacement BM route 132kV major refurbishment SF6 repair works RIIO-T2 PCB CVT Replacement Programme Environmental Action Plan - Building Energy Reduction Measures BU route 132kV major refurbishment ZO, ZR and XF routes 400kv major refurbishment Windyhill 275kV switchgear replacement Westfield 275kV switchgear replacement (includes future 400kV upgrade) Hunterston 400kV Hunterston 132kV switchgear replacement Devol Moor 132kV switchgear replacement XZ route 275KV major refurbishment Glenniston 132kV switchgear replacement Glenrothes 275kV switchgear replacement Shrubhill SGT1 replacement 33kV Switchgear And Cable Replacements Torness 400kV Shunt Reactors Replacement Protection Modernisation EMS Replacement ZA route 400kV major refurbishment RIIO-T2 System Monitoring Modernisation 132kV Optical Transport Network RTU/ HMI Replacement System Health Map 400 / 275kV Telecomms Resilience Fibre replacement and repair Active Equipment Investment Strategy Digital Substations Offline Test Facility PD Installation for GIS and GIB EMS-WAMS integration Online Transformer DGA Installation at Strathaven SGT1 and Cockenzie SGT1 Longannet 275kV series reactors refurbishment Devol Moor T2A replacement Neilston SGT1 Transformer Replacement Giffnock SGT1 & SGT2 Transformer Replacement Mosmorran 132kV switchgear replacement Transformer Refurbishment Programme AL route 132kV major refurbishment BC route 132kV major refurbishment 132kV Circuit-Breaker Replacement Works 275/400kV Circuit-Breaker Replacement Works BL route 132kV major refurbishment Torness 400kV Circuit-Breaker Refurbishment Cockenzie 275kV CT replacement Easterhouse 275kV Line entry disconnector replacement Longannet 275kV Switchgear Replacement DWNO Denny substation to Wishaw substation 400kV Reinforcement ECU2 East Coast Onshore 275kV Upgrade ECUP - East Coast 400kV Incremental Reinforcement HNNO - Hunterston East-Neilston 400 kV Reinforcement WLTI Windyhill - Lambhill - Longannet 275kV Circuit Turn-in to Denny North 275kV substation Eccles Shunt Compensation (B6) (ECVC, NOA4) Shunt Compensation - Operability (Hunterston) Shunt Compensation - Operability (Reactors) Harmonic Filters (MOFF, NECU, BLAH, MARG, LINM, NETS ) Facilitating Black start project related investment Newton Stewart GSP Reinforcement Circuit Rating Management System South West Scotland Generation Export Management System (GEM) Shunt Compensation - Mark Hill (STATCOM) Pre-engineering Synchronous Compensation installation at various sites Kendoon to Glenlee overhead line circuit Reinforcement TORI-176 132kV New Cumnock Protection scheme addition TORI-232 New 132kV Ewe Hill Substation Transformer SGT2 TORI-151a U and AT Route Uprating/minor refurbishment TORI-191 Gretna-Ewe Hill Overhead Line Replacement TORI-251 Coalburn to Douglas North 132kV Cable Uprating TORI-268 Coalburn to Douglas North 132kV cable rating enhancement TORI-238 Cumberhead Collector Substation TORI-158 New 275KV New Cumnock Transformers SGT1C and SGT3C TORI-177 132kV Glenglass Protection Scheme addition TORI-205 132kV Mark Hill to Chirmorie/Stranoch WF overhead line circuit TORI-198 Newton Stewart 132kV substation Reinforcement works TORI-206 New 275kV Mark Hill Transformer SGT3 TORI-186 275kV Kilmarnock South Transformer SGT1 & 2 Protection TORI-224 275kV Coylton Transformers SGT1 & 2 Replacement TORI 213 New 275kV New Cumnock SGT2B GSP Newarthill Fault Level Mitigation GSP Kilmarnock Town Fault Level Mitigation GSP Port Dundas and West George Street Fault Level Mitigation GSP Westfield Fault Level Mitigation GSP Strahaven Fault Level Mitigation GSP East Kilbride Fault Level Mitigation GSP Lesmahagow New GSP GSP Moffat New GSP GSP Redhouse Capacity Upgrade Cost Benefit Analysis GSP Newarthill Fault Level Mitigation - Includes sensitivity analysis of options GSP Newarthill Fault Level Mitigation - Includes sensitivity analysis of options GSP Kilmarnock Town Fault Level Mitigation - Includes sensitivity analysis of options GSP Kilmarnock Town Fault Level Mitigation - Includes sensitivity analysis of options GSP Port Dundas and West George Street Fault Level Mitigation GSP Westfield Fault Level Mitigation GSP Strahaven Fault Level Mitigation GSP East Kilbride Fault Level Mitigation GSP Redhouse Capacity Upgrade OHL Minor Refurb Programme BW Route 132kV Major Refurbishment AC Route 132kV Major Refurbishment XH & XJ RouteS 400kV Major Refurbishment Currie-Gorgie 132kV Cable Replacement AY Route 132kV Major Refurbishment Gorgie-Telford Road 132kV Cable Replacement BM Route 132kV Major Refurbishment Environmental Action Plan - Building Energy Reduction Measures BU Route 132kV Major Refurbishment ZO, ZR and XF RouteS 400kV Major Refurbishment Cable Major Refurbishment Programme Windyhill 275kV switchgear replacement Consumer Evolution FES Scenario Windyhill 275kV switchgear replacement Consumer Evolution FES Scenario WLTI Sensitivity Windyhill 275kV switchgear replacement Community Renewables FES Scenario Windyhill 275kV switchgear replacement Community Renewables FES Scenario WLTI Sensitivity Windyhill 275kV switchgear replacement Steady Progression FES Scenario Windyhill 275kVswitchgear replacement Steady Progression FES Scenario WLTI Sensitivity Windyhill 275kV switchgear replacement Two Degrees FES Scenario Windyhill 275kV switchgear replacement Two Degrees FES Scenario WLTI Sensitivity Westfield 275kV Switchgear Replacement Hunterston 400kV Hunterston 132kV Switchgear Replacement Devol Moor 132kV Switchgear Replacement XZ Route 275kV Major Refurbishment Glenrothes 275KV Switchgear Replacement Shrubhill SGT1 Replacement Torness 400 R1 and R2 Shunt Reactors Replacement ZA Route 400kV Major Refurbishment Devol Moor T2A Replacement Neilston SGT1 Replacement Giffnock SGT1 Replacement Mosmorran 132kV Switchgear Replacement Transformer Refurbishment Programme. Kendoon T2 Transformer Refurbishment Programme. Windyhill SGT3 AL Route 132kV Major Refurbishment Transformer Refurbishment Programme. Inverkeithing T2 Transformer Refurbishment Programme. Torness SGT1 Transformer Refurbishment Programme. Torness SGT2 Transformer Refurbishment Programme. Carntyne T2B Transformer Refurbishment Programme. Carntyne 132 T1B BC Route 132kV Major Refurbishment 132kV SF6 CB Replacement Programme. Kilwinning 132kV 132kV SF6 CB Replacement Programme. Meadowhead 132kV 275/400kV CB Refurbishment Programme. Strathaven 275kV 275/400kV CB Refurbishment Programme. Strathaven 400kV 275/400kV CB Refurbishment Programme. Newarthill 275kV BL Route 132kV Major Refurbishment 132kV SF6 CB Replacement Programme. Torness 132kV Torness 400kV Circuit-Breaker Refurbishment Transformer Refurbishment Programme. Saltcoats T2C Transformer Refurbishment Programme. Grangemouth SGT1 Transformer Refurbishment Programme. Partick T1 Longannet 275kV Switchgear Replacement Shunt Compensation - Operability (Hunterston) Shunt Compensation - Operability (Reactors) Shunt Compensation - Mark Hill (STATCOM) Environmental Action Plan - Building Energy Reduction Measures Windyhill 275kV switchgear replacement Consumer Evolution FES Scenario High Carbon Price Template switchgear replacement Consumer Evolution FES Scenario WLTI Sensitivity Windyhill 275kV switchgear replacement Community Renewables FES Scenario High Carbon Price Template Windyhill 275kV switchgear replacement Community Renewables FES Scenario WLTI Sensitivity High Carbon Price Template Windyhill 275kV switchgear replacement Steady Progression FES Scenario High Carbon Price Template Windyhill 275kV switchgear replacement Steady Progression FES Scenario WLTI Sensitivity High Carbon Price Template Windyhill 275kV switchgear replacement Two Degrees FES Scenario High Carbon Price Template Windyhill 275kV switchgear replacement Two Degrees FES Scenario WLTI Sensitivity High Carbon Price Template Hunterston 132kV switchgear replacement High Carbon Price Template Devol Moor 132kV switchgear replacement High Carbon Price Template Mosmorran 132kV switchgear replacement High Carbon Price Template 132kV SF6 CB Replacement Programme. Kilwinning 132kV High Carbon Price Template 132kV SF6 CB Replacement Programme. Meadowhead 132kV High Carbon Price Template 132kV SF6 CB Replacement Programme. Torness 132kV High Carbon Price Template Windyhill 275kV switchgear replacement Supporting Documentation Cables Portfolio View Circuit Breaker Portfolio View Overhead Lines Portfolio View Transformer Portfolio View Investment Decision Pack Annex 2: Sustainable Workforce Strategy Annex 2: Sustainable Workforce Strategy Our Sustainable workforce strategy sets out how we will ensure a workforce fit for the future. This includes delivering a modern; diverse; high quality; well-trained and resilient workforce within our baseline regulatory settlement, without any additional funding or incentives. View Annex 2: Sustainable Workforce Strategy Annex 3: Strategic Investment Plans - Non Load Annex 3: Strategic Investment Plans - Non Load This annex provides a more detailed explanation of the investment planning process and asset risk movements. View Annex 3: Strategic Investment Plans - Non Load Annex 4: Strategic Reinforcements Annex 4: Strategic Reinforcements This annex provides a strategic overview of the boundary upgrade projects which are considered as part of the Network Options Assessment Process. These projects have a degree of interdependence and are coordinated with other Transmission Owners. This annex complements the engineering justification papers for individual boundary upgrade projects. View Annex 4: Strategic Reinforcements Annex 5: Co-creating the plan with our Stakeholders Annex 5: Co-creating the plan with our Stakeholders This annex details our programme of stakeholder engagement and research in the co-creation of our RIIO-T2 Business Plan. It details the role of the Transmission User Group throughout our RIIO-T2 planning, key planning meetings as well as their enduring role as we enter into the next price control. We also outline our approach to consumer and stakeholder research, techniques and methodologies adopted and highlight key research findings used to influence and inform our decision making. View Annex 5: Co-creating the plan with our Stakeholders View Appendix 1: Research Findings - SP Energy Networks pilot Willingness to Pay digital tool View Appendix 2: Research Findings - Understanding SP Transmission View Appendix 3: Research Findings - TO wide Willingness to Pay research View Appendix 4: Research Findings - SP Energy Networks specific Willingness to Pay research View Appendix 5: Research Findings - Business Plan acceptability research View Appendix 6: SP Energy Networks RIIO-T2 engagement figures View Appendix 7: Research Findings - Willingness to Support Cost of Equity (CoE) View Appendix 23: SPEN TO UG Agreed Terms of Reference View Appendix 24: SPEN TO User Group Chair Job Description View Appendix 25: SPEN TO User Group Member Job Description View RIIO-T2 User Group Meetings to Date Annex 6: Innovation Strategy Annex 6: Innovation Strategy This annex provides more detail on our strategic focus, ambitions and culture of innovation. It provides a detailed breakdown of the proposed expenditure and expected benefits of our innovation activities in RIIO-T2. View Annex 6: Innovation Strategy Annex 7: Environmental Action Plan Annex 7: Environmental Action Plan This Annex provides a comprehensive review of the environmental impact of our network and identifies the actions we will take during RIIO-T2 to address the opportunities and challenges these impact areas present. View Annex 7: Environmental Action Plan View Annex 7.1: Sustainable Business Strategy View Annex 7.2: Transmission Annual Sustainability Statement Annex 8: Cost Benefit Analysis Process Annex 8: Cost benefit Analysis Process This annex explains how we have used Cost Benefit Analysis to determine the investment option that provides the most economical outcome for consumers. View Annex 8: Cost benefit Analysis Process Annex 9: Cost of Capital NERA Report Annex 9: Cost of Capital NERA Report We commissioned NERA Economic Consulting (NERA) to estimate the cost of equity and to assess the correct optimal trailing average to use in the cost of debt indexation mechanism, including an estimation of the halo effect and to set out estimates of the additional costs of borrowing, for the RIIO-2 price control period. Annex 9: Cost of Capital NERA Report Annex 10: Real Price Effects NERA Report Annex 10: Real Price Effects NERA Report We commissioned NERA Economic Consulting (NERA) to advise on the appropriate treatment of real input price inflation, known widely as Real Price Effects (RPEs), and ongoing productivity improvement over the RIIO-T2 control period from 2021/22 to 2025/26. RPEs capture expected changes in the input prices faced by us, relative to general inflation. View Annex 10: Real Price Effects NERA Report Annex 11: Business Plan Data Tables Annex 11: Business Plan Data Tables Annex 11 sets out proposed cost, volume and output delivery information for RIIO-T2 period in a format determined by Ofgem. It covers both qualitative and quantitative information that will be used by the regulator to better understand the submission by the licence company and facilitate a full and proper assessment of the investment (Totex) on the network requirement for the RIIO-T2 price control period. View Annex 11: Business Plan Data Tables Part 1 View Annex 11: Business Plan Data Tables Part 2 Annex 12: Output Incentives Annex 12: Output Incentives In RIIO-2, output delivery incentives (ODIs) will apply where service quality improvements beyond a level that is funded through base revenues may be in the interests of consumers. Our annex sets out our proposed ODIs based on feedback from our stakeholders, including Willingness to Pay studies. For each incentive, we have explained how this will operate, including all relevant performance targets. View Annex 12: Output Incentives Annex 13: Investment Process Annex 13: Investment Process This annex describes the structured process we use to identify investments. It describes our internal governance processes to ensure that the work we do has the right scope and that our investments are economical, efficient and co-ordinated. This has not been published to due to commercial sensitivity. Annex 14: Planning Scenarios Baringa Report Annex 14: Planning Scenarios Baringa Report This is an independent report provided by Baringa Partners to detail the methodology and results of the Future Energy Scenarios that have been used to underpin our load related expenditure. View Annex 14: Planning Scenarios Baringa Report Annex 15: RIIO-T2 Central and Southern Scotland Electricity Scenarios 2019 Annex 15: RIIO-T2 Central and Southern Scotland Electricity Scenarios 2019 A summary of the Future Energy Scenarios which was published earlier this year and summarises the detailed analysis undertaken by Baringa. View Annex 15: Central and Southern Scotland Electricity Scenarios 2019 Annex 16: NERA - Risk Modelling for RIIO-T2 Annex 16: NERA - Risk Modelling for RIIO-T2 We have worked with NERA to develop a financeability risk model, based on Ofgem’s Price Control Financial Model. This paper sets out the methodology that underpins our approach to modelling our approach to financability risk. View Annex 16: NERA - Risk Modelling for RIIO-T2 Annex 17: RIIO-T2 Project Team Annex 17: RIIO-T2 Project Team This Annex provides an overview of the RIIO-T2 project team and the experience of the work stream leads. View Annex 17: RIIO-T2 Project Team Annex 18: Competition Plan Annex 18: Competition Plan We have a responsibility to develop and maintain an economic, efficient and coordinated transmission network. We extensively use market driven competition to do this for the benefit of consumers. Our Competition Plan sets out our existing competitive processes called “Native Competition”. The plan also focuses on Ofgem’s proposed competition models referred to as "Early" and "Late" competition. In addition, our Competition plan also sets out which RIIO-T2 price control projects we believe meet the criteria for Ofgem’s "Early" and "Late" competition models. View Annex 18: Competition Plan Annex 19: Investment Plan Additional Analysis Annex 19: Investment Plan Additional Analysis This annex provides a more detailed analysis of the Load and Non-Load related investment plans, and the network operations plan. This includes analysis of the costs and activity levels of the main categories of expenditure compared to RIIO-T1. Annex 19: Investment Plan Further Analysis Annex 20: Uncertainty Mechanisms Annex 20: Uncertainty Mechanisms A detailed justification of the various uncertainty mechanisms that are proposed in the Business Plan. Annex 20: Uncertainty Mechanisms Annex 21: Strategic Investment Plan Load Annex 21: Strategic Investment Plan Load A summary of the process that has been taken to create the load related expenditure plans and the interaction between various projects. View Annex 21: Strategic Investment Plan Load Annex 22: Supply Chain Annex 22: Supply Chain Supply Chain – Details of the engagement we have undertaken with our supply chain to ensure our confidence in our ability to deliver our plan and fulfil the ambitions we have set out. View Annex 22: Supply Chain Annex 23: Our Assurance Framework Annex 23: Our Assurance Framework This Annex provides an overview of the risk assessment methodology used for our risk-based Assurance framework. Information is also provided on our external assurance providers. View Annex 23: Our Assurance Framework View Appendix A - External Assurance Providers Annex 24: Business IT Security Strategy Annex 24: Business IT Security Strategy This annex provides information on our forecast activities for cyber security related to business IT systems. This has not been published due to the sensitivity of the content. Annex 25: Finance Annex 25: Finance Our Finance Annex explores in more detail our approached to financing our plan. We have performed a full review of all financial information requested in Ofgem guidance and Consumer Challenge Group correspondence, as well as any information we believe to be relevant to our business plan. View Annex 25: Finance Annex 26: Financial Model Annex 26: Financial Model Annex 26 contains the financial data templates that Ofgem requires us to complete in order to derive our revenues, financial statements and ratios that underpin our overall financeability assessment. This is Ofgem’s Business Plan Financial Model (BPFM). View Annex 26: Financial Model Annex 27: Track Record Annex 27: Track Record This annex contains the documents provided in response to an information request from the RIIO2 Consumer Challenge Group in the first half of 2019. This provides detailed analysis and commentary on the TPCR4 and RIIO-T1 periods. This has not been published due to the detailed costs that they contain and the associated commercial sensitivity. Annex 28: Strategy for Engaging Stakeholders in RIIO-T2 Annex 28: Strategy for Engaging Stakeholders in RIIO-T2 Our comprehensive strategy for engaging with our stakeholders during the RIIO-T2 period, including a series of annual performance commitments. View Annex 28: Strategy for Engaging Stakeholders in RIIO-T2 Annex 29: Estates Annex 29: Estates This annex provides further information on our organisation and operation of our Fleet, Estates and Building support operations. View Annex 29: Estates Annex 30: CVP Assumptions Annex 30: CVP Assumptions Details of the Consumer Value Propositions (CVPs) included in our plan including the assumptions which underpin them. View Annex 30: CVP Assumptions Annex 31: Output Summary Annex 31: Output Summary Snapshot table as requested by Ofgem in their Business Plan Guidance. View Annex 31: Output Summary Annex 32: Cyber Resilience Plan Annex 32: Cyber Resilience Plan This annex details our activities for Operational Technology cyber security, including activities to ensure compliance with the Network and Information Systems directive. This has not been published due to the sensitivity of the content. Annex 33: Sharing Factor Annex 33: Sharing Factor Our views on an appropriate totex incentive sharing factor for our RIIO-T2 plan based on a review of the various parts of the plan. View Annex 33: Sharing Factor Annex 34: Our Supplementary Business Plan Annex 34: Our Supplementary Business Plan Ofgem’s working assumptions, particularly around the cost of equity, are not aligned to our views. We believe a higher rate of return is necessary based on the risks and challenges we face. This annex provides details of our analysis based on the advice of independent economic advisers and the support we have received from stakeholders. It is important that this is viewed in the context of the full plan. View Annex 34: Our Supplementary Business Plan Annex 35: Consolidated Network Access Policy Proposal Annex 35: Consolidated Network Access Policy Proposal All Transmission Owners are required to develop one consolidated Network Access Policy (NAP). The purpose of the NAP is to facilitate efficient performance and effective liaison between the ESO and the TOs in relation to the planning, management and operation of the transmission system for the benefit of consumers. Within our Output Incentives Annex, we have provided a milestone plan which highlights the key dates and stages involved in turning our RIIO-T2 draft Network Access Policy proposal document into a final industry approved document by the 31st December 2020, ready for implementation on 1st April 2021. View Annex 35: Consolidated Network Access Policy Proposal Annex 36: Engineering and Corporate Support Annex 36: Engineering and Corporate Support Annex 36 explores in more detail our indirect support costs for both engineering and corporate services, setting out what these costs represent and how they compare to RIIO-T1 and the wider industry. Annex 36: Engineering and Corporate Support Digitalisation Strategy Digitalisation Strategy Please click here to view our Digitalisation Strategy