Innovation as usual

Innovation was a key word at this year’s Future Networks Conference and is something that both the gas and electricity networks are making business as usual.

This message was clear from the start of this year’s event, which took place at the Birmingham Conference & Events Centre, last month.

Ben Eyre-White, head of electricity networks and systems, Department for Business, Energy and Industrial Strategy (BEIS), kicked off proceedings with a presentation entitled ‘Upgrading our energy system’.

Eyre-White said: “If we get this right we have the opportunity to create new jobs and businesses and to save people up to £40 billion over the coming decades.”

He described two specific challenges set out in the Government’s smart systems and flexibility plan.

“Firstly, to open up network reinforcement to competition. Competition that would enable smart technologies to compete with traditional network solutions so that the lowest cost option could be found by consumers. Secondly, we challenged network companies to find a better way of coordinating our transmission and distribution. So that a truly whole system approach could be taken to planning and operating the system. The industry has responded to these challenges.

“In January last year, Government, National Grid and Ofgem announced the creation of the new system operator within National Grid. The licence changes needed to bring this into effect are ongoing and are due to be completed at this time next year. But the system operator hasn’t waited until then to act. It’s simplifying the number of ancillary services, it’s finding new ways of procuring those ancillary services and making contracts work as well for the demand side, as they have historically for the supply side.

Eyre-White highlighted innovation as key to driving the sector forward, but told delegates that he wants to see the sector put more of a focus on consumers. 

“People see energy as something that’s done to them,” he said. “The energy system isn’t designed with consumers at its heart. We want to change that. We want to build a consensus around a longer-term vision for energy. One that puts consumers, not producers at its heart.”

The regulation side

Jonathan Brearley, executive director for systems and networks at Ofgem, delivered a presentation entitled ‘Encouraging innovation via regulation’.

He talked about RIIO2 and outlined the importance of consumers.

Ofgem recently set out proposals for a new regulatory framework from 2021 and says these plans will deliver over £5 billion worth of savings for consumers over five years.

As part of its plans Ofgem has also proposed cutting the regulatory period to five years from eight years.

“We must ensure that consumers are given a much stronger voice,” Brearley told delegates. “Equally, we’re making sure that we understand and respond to the way networks are used. That means moving away from the long term eight-year price controls and back to a default five-year price control.”

Highlighting the importance of innovation, Brearley remarked: “We think RIIO2 should deliver significant levels of investment, reliability and innovation at lowest cost. We think that companies have made good progress with innovation, but we do think there’s an opportunity to go further. They will need to stay ahead of the curve, but ultimately the use of innovation and technology needs to become second nature. Our ambition for RIIO2 is as high as it was in RIIO1. Overall, RIIO2 is designed to be adaptable. Innovation funding will play a key part and does need to become more focused on the areas where we can get the best value.”

An independent view

Stewart Dawson, managing director of Vattenfall Networks, offered an IDNO point of view.

Last year, Vattenfall formed a new unit to own and operate electricity networks in Great Britain – Vattenfall Networks Ltd. Operations are expected to start this year.

Vattenfall Networks’ operating licence was granted by British energy regulator Ofgem.

Dawson said: “If we’re not open to innovation, competitors will be. As DNOs transitioning to DSOs we have to look and be open to innovation.

“We need to be thinking 30, 40 or 50 years ahead as to what is the marketplace going to look like.”

He had the following advice for attendees: “With innovation, not everything works first time. Don’t be afraid of failure. You can learn from it and move on.”

This mindset will help play a part in ensuring that innovation becomes business as usual.

For a full list of presentations see: https://event.networks.online/future/speaker-presentations/

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