ARV Leads Engineering Reviews for Ofgem RIIO-GD2 Price Control
ARV Consulting Limited (ARV), working collaboratively with QEMS Limited (QEMS), has successfully completed a formal engineering review of the UK’s Gas Distribution Network (GDN) investment proposals for the upcoming RIIO-2 price control. The review process, led by ARV, drew from the talented collegiate and knowledgeable team from QEMS to review the GDN engineering justification papers that were submitted to Ofgem in December 2019. The papers reviewed, totalling over £5.8bn (excluding Opex and other items), were solicited by Ofgem last year and are intended to justify the bulk of mains replacement and other asset capital expenditure (e.g. major projects and asset health) intervention volumes on their networks for the 2021 and 2026 GD2 period.
Tony Voss, Owner Director at ARV, said: “The main objective of the challenge was to review 100% of the justification papers in our scope, raise clarifying supplementary questions, interact directly with the GDNs as appropriate, and then conclude an objective and independent view on the intervention needs-case and asset volumes proposed in each paper”.
The review process took a little over 3 months to mobilise and complete, raising close to 700 supplementary questions for the GDNs in a review of 159 engineering papers.
Tony went on to say: “We were delighted to secure this key contract for the UK government regulator Ofgem to support a fair and objective review of the RIIO-GD2 proposals. Working closely with the Ofgem Engineering Hub and Cost Assessment teams, plus the team of extremely experienced engineers that ARV and QEMS put together for this challenge, has been fun and a genuine pleasure. Having been engaged late on in the process by Ofgem and to still have achieved the schedule, budget and outcome targets makes it all the more pleasing”.
Rob Graham, CEO of QEMS, said: “QEMS and ARV have worked extremely well together. Managing a multidisciplined and ‘virtual’ team across remote shared environments can often be a tricky logistical task. I’m glad that we put the time and effort into setting the project up in the cloud this way, given the unprecedented times we then found ourselves in”.
Ofgem Chief Engineer, Peter Bingham, who is responsible for bringing the gas distribution engineering review to a successful conclusion, along with the parallel gas and electricity transmission reviews said of ARV and QEMS: “Many thanks for all your help on this piece of work. I was quite worried as we approached the end of last year without any support, but delighted when you both came on board and enabled a thorough engineering challenge and review of the GDN plans”.
Concluding the review, Ofgem further commented: “We would just to like to add our sincere thanks and appreciation for what you and your QEMS team have achieved for us. Tony, as well as your technical knowledge and input, you are a great project manager, ensuring you understood our needs and delivered everything you promised in an organised, open and structured way. This quickly gave us real confidence that we would reach our targets and hence made our role of working with you and your team a real pleasure”.
The final step for the ARV / QEMS collaboration is to provide support to Ofgem as it compiles its initial RIIO-GD2 cost model and draft price control determinations for each GDN.