ScottMadden, Inc., one of North America’s leading management consulting firms specializing in energy, recently joined the Smart Electric Power Alliance (SEPA) in a fact-finding mission to United Kingdom, the poster child for business model reform. In particular, the trip was designed to better understand the country’s decarbonization efforts, as well as the highly touted performance-based regulatory mechanism known as RIIO.
This new article, featured in the February edition of Public Utilities Fortnightly, shares key insights gathered from the trip. Access the full article for the latest on UK’s decarbonization efforts and the role of RIIO.
The UK’s transition toward decarbonizing their energy industry is a shared initiative across policymakers, utilities, and third-party service providers. UK energy markets are highly cognizant of the country’s domestic and international commitments. These commitments create a unifying driver across the industry. Even more importantly, decarbonization was one of the driving forces behind the development and implementation of RIIO, which stands for Revenue using Incentives to deliver Innovation and Outputs.
A growing number of states, including California, New York, Illinois, and Massachusetts, among other stateside markets, are working toward similar unified policies that outline clear, long-term direction with measurable outcomes.
“The United Kingdom embarked on a grand experiment in performance-based ratemaking with the adoption of RIIO,” explains Cristin Lyons, partner and energy practice leader at ScottMadden. “Even though RIIO is in the early stages, there are some interesting elements for U.S. utilities to consider,” continues John Pang, partner at ScottMadden.
“Often overlooked is the importance of RIIO in meeting the United Kingdom’s decarbonization goals,” adds Julia Hamm, president and CEO of SEPA.
If you are interested in additional insights that can be applied to planning and business decisions in the United States, please contact us.
About Smart Electric Power Alliance
The Smart Electric Power Alliance (SEPA) is an educational non-profit and a trusted platform for education, research, and collaboration to help utilities deploy and integrate solar, storage, demand response, and other distributed energy resources. Created in 1992, we currently have over 1,000 members who represent the whole spectrum of industry stakeholders. Utilities, ISOs, large energy users, corporate and non-profits look to us to facilitate solutions for today’s challenges and to meet tomorrow’s electricity needs for the next decade and beyond. For more information, visit www.SEPApower.org | Twitter | Facebook | LinkedIn
About ScottMadden’s Energy Practice
We know energy from the ground up. Since 1983, we have served as energy consultants for hundreds of utilities, large and small, including all top 20 energy utilities. We have helped our clients develop strategies, improve operations, reorganize companies, and implement initiatives. Our broad and deep energy utility expertise is not theoretical—it is experience based.