NGGT’s new asset investment modelling approach
Leaders from the UK gas network share insights into a recent project to develop a new asset investment modelling approach and support better business planning for its upcoming regulatory period.
28 Apr 20 by Jane Gray
National Grid Gas Transmission (NGGT) owns and operates the high-pressure gas transmission network, comprising of over 7,660 km of pipe and 618 above-ground installations in Great Britain.
This year, NGGT expects to receive its final determination for RIIO-GT2, the five-year economic regulatory cycle starting in April 2021.
With RIIO-GT2 promising to be a particularly tough price control, including enhanced levels of scrutiny of investment plans and projected benefits, NGGT recognised a need to enhance its approach to making asset investment decisions and strengthen its business plan.
As such, in 2018, the company partnered with technology provider Copperleaf to implement its specialist C55 decision analytics software for asset investment planning and management.
Here, Neil Tansley, asset modelling manager, and Jowita Uler, portfolio planning manager, share insights into the drivers behind NGGT’s partnership with Copperleaf and the implementation journey over the past two years.
Q: Can you share a little bit about your roles at NGGT?
Neil: “I work for the Engineering and Asset Management team. We are largely responsible for the technical operation of the transmission system, and carry out a lot of the planning, design work, and long-term asset management processes. As the Asset Modelling Manager, I create, update and maintain our asset investment models, which are used to support investment planning.”
Jowita: “I’m the Portfolio Planning Manager within the Gas Transmission business unit. My team is responsible for creating an optimal, medium to long-term investment program to ensure that NGGT meets our regulatory, statutory, financial and customer requirements. We are also accountable for management of our robust cost book to enable informed investment decisions and ensure efficient delivery of work.”
Q: What were your main goals for this project?
Neil: “Our main goal was to complete a successful business plan submission. As a regulated business, we need to produce an investment plan every five years to submit to Ofgem. NGGT must be able to tell the regulator what benefits (such as safety, environmental, availability and reliability, and financial) can be expected from our investments. The more transparent, data-based and quantifiable justifications we submit, the better the chances we have at a positive response from the regulator.”
Jowita: “We needed a system that would integrate all our disjointed data. Before we had C55, we used several different spreadsheets. Our Investment Management, Portfolio Planning, and Investment Governance processes were not integrated—so for example, a version of an investment would be kept in Investment Governance, and another in Portfolio Planning, and quite often they were misaligned.
Now that we have C55, we have synergies between our data and our departments. The work is driven by the software and this has brought about a fundamental change in the way we operate. We can now improve our planning and optimisation by running alternative scenarios and seeing the impact that different decisions have on our portfolio of work.
Q: What were the key things you felt made the project successful?
Neil: “Our team had a clear idea of what we wanted to achieve and the Copperleaf team was very responsive to that. They took time to understand our specific requirements and had an implementation team on site, working alongside us in our offices. It wasn’t just about delivering a product; it was about helping us achieve our vision.”
Jowita: “The simplicity of the C55 system, and how it brings all the information together, has provided us with a coordinated, transparent, single version of the truth—along with a great user experience. We now have the ability to make data-driven decisions, and that’s really what has made this project a success.”
Q: What are the key benefits you think you’ll get out of implementing C55?
Neil: “The greatest benefit of implementing C55 will be how we approach our next business planning cycle. Instead of trying to build the plan from the bottom up, we’ll be able to have our subject matter experts build the plan directly in C55, and then we will assess the benefits using the value framework and optimise our investments. This gives us a much more structured way of capturing the input directly in C55 rather than doing it offline and then trying to bring it all together, which has been incredibly difficult and time-consuming in the past.”
Jowita: “The key benefits of implementing C55 are having transparency of all our work and a solution that provides us with a single system to hold all our investment data. We have already managed to save a lot of time and improve data quality by no longer double-handling our data. The ability to see the history of all records and how much risk an investment will carry are other major benefits that we will gain from C55.”
Q: Have there been any other added benefits?
Neil: “Another benefit is that C55 is an end-to-end solution. We can start off with a crude idea of the projects we need to undertake to achieve our strategy and then track that investment all the way through to delivery and benefits realisation.
Copperleaf C55 also gives us the ability to run a lot of different simulations in order to identify the best combination of asset investments that deliver the most value to customers in terms of cost and risk.”
Jowita: “The implementation of C55, with all of its modules, allows us to report on all the outputs required by individual teams. There are a lot of robust capabilities that are designed with the user experience in mind that help us get the job done quicker than ever before.”
Q: What’s next on your asset management journey?
Neil: “Managing our cost data through C55 Cost Estimation is one element we’re planning to tackle next. We are also currently reworking our strategic asset management plan, and are trying to be more specific on how our assets should perform in order to achieve the agreed-upon outputs.”
Jowita: “We are looking forward to fully utilising the optimisation capabilities within C55, including integrating our cost data, which will give us a clear picture of the entire asset lifecycle and enable us to build the best investment plan for our business and our customers.”
To learn more about Copperleaf’s work with National Grid Gas Transmission watch their exclusive webinar, on-demand, hosted in association with Engerati in June 2020.
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