CEPA and TNEI selected by ElectraLink to Deliver Distribution Use of System (DUoS) Models

November 27, 2017

ElectraLink managed the procurement of a service provider of modelling services and is pleased to announce the selection of Cambridge Economic Policy Associates (CEPA) and TNEI from a number of bidders. The Distribution Use of System (DUoS) financial models are used by the GB electricity industry to allocate the £5 billion annual cost of the distribution networks. ElectraLink is the secretariat of the Distribution Connection and Use of Service Agreement (DCUSA) which manages these models.

The procurement process, which ElectraLink ran on behalf of the DCUSA Board, resulted in a five-year contract between DCUSA and a joint CEPA, TNEI partnership. The procurement process took over 8 months during which time ElectraLink devised and project managed a bespoke project plan reflecting the niche services being procured. It included initial market testing, scoping the breadth and size of the market, interviewing and selecting bidders with the Procurement Project Group, before determining CEPA and TNEI the most suitable partner. Initial market testing revealed the current models to be complicated and difficult to understand. ‘Ease of use’ became the focus for future modelling, alongside on-going engagement in the sector to clarify what needed to change.

According to Stefan Leedham, Head of Governance Services at ElectraLink: “The models that we were procuring allocate the regulated revenue for the DNOs. At the same time, we are seeing dramatic change in the industry, particularly in distribution charging. We had to focus on ensuring that any new service provider could bring transparency to the complicated area of network charging, as we were acutely aware of the potential future challenges on the horizon. Our procurement assessment needed a specialised focus to ensure that the bidders could both deliver a compliant model that was easy to use, while actively consulting with industry. CEPA and TNEI were the right choice.”

According to Patrick Taylor, CEPA’s Project Director: “Distribution tariffs are a key element of the GB electricity sector’s regulatory framework, growing in importance in a new age of smart networks and distributed generation. We are pleased to have been awarded this contract with TNEI to develop and maintain the DCUSA distribution charging models. We look forward to working with the industry over the next five years.”

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