Calculating the Social Return of Investment for Electricity North West

For the third year in a row, Economic Insight has worked with Electricity North West (ENWL) in support of its Stakeholder Engagement and Consumer Vulnerability (SECV) submission. Our work this year involved modelling case studies relating to projects that have been undertaken across ENWL’s business to calculate the Social Return on Investment (SROI) that they generate.

These case studies related to areas such as innovation, customer initiatives, consumer vulnerability, and local and community energy. Whilst modelling the case studies this year we adapted our approach, bringing it in line with a new national framework. We have also adopted the use of proxy variables from a shared source that will also be used by other Distribution Network Operators (DNOs). These changes are intended to help DNOs to achieve more consistent methodologies and better facilitate comparison between them. Migrating our modelling to this approach will help ENWL as it transitions into the ED2 price control.

This year, we have also seen evidence of our modelling work being used in ENWL’s decision making processes. We applied our modelling methodology to a selection of local and community energy projects seeking funding from ENWL, based on the plans that they put forward in their applications. The resulting SROI calculated with our method was then used as one of the criteria to decide which of the projects should receive funding. We see this as a positive step as these processes are now used for both ex-ante and ex-post assessment. This is further evidence of ENWL embedding SROI calculations into its business, to the benefit of its customers and society more broadly.