The First Tier of the LCN Fund is designed to enable electricity distribution network operators (DNOs) to recover a proportion of expenditure incurred on small scale projects. DNOs do not generally need to receive Ofgem’s approval before beginning a First Tier Project.
The Low Carbon Networks Fund Governance Document requires First Tier Projects to trial:
- A specific piece of new (i.e. unproven in GB) equipment (including control and communications systems and software) that has a Direct Impact on the Distribution System,
- A novel arrangement or application of existing Distribution System equipment (including control and communications systems and software),
- A novel operational practice directly related to the operation of the Distribution System, or
- A novel commercial arrangement with a Distribution System User.
Where the First Tier Project:
- Accelerates the development of a low carbon energy sector & has the potential to provide net financial benefits to future and/or existing customers;
- Has a Direct Impact on the operation of a DNO’s Distribution System;
- Generates new knowledge that can be shared amongst all DNOs;
- Focuses on network Methods that are at the trialling stage ;
- Does not lead to unnecessary duplication; and
- When implementing First Tier Projects DNOs must ensure that they comply with the LCN Fund Governance Document.