Meeting demand

 

Q. What is the best way to try innovations on a huge customer base/national operation?

A. Many customers are willing to allow good partners to try innovation but not many are willing to pay others to innovate. It is important then to get the overall funding package right. If you have a product or service that might benefit one of your customer’s long term and can supply this to them at the same or lower cost than the traditional offer then many people and organisations are willing to participate.

 

Q. What cutting-edge technologies are you most excited about?

A. Controlling ground source heat pumps remotely to produce lower bills and lower carbon intensity while still maintaining comfortably warm homes. Ground source heat pumps are an electrically driven device and this prospect is being enabled by the convergence of two technologies – smart metering and smart thermostats. The smart metering has given rise to the ability to charge consumers different prices for their electricity at different times of day which reflects the reality of the wholesale electricity market. Smart thermostats allow property needs data (temperature, humidity, comfort levels) to be exported to remote servers where the heating controls can then be optimised and new schedules sent back to the thermostat. By linking the heating control server with the electricity price server, the revised heating schedule can move heat pump operation from high priced to low priced times of day. Modelling has shown savings of 25-40 per cent are possible. Better still, lower priced times of day typically coincide with lower carbon grid electricity – this is because wind, nuclear and solar provide a lot of the baseline while higher carbon sources of electricity are deployed when the grid needs boosting.

 

Q. As an SME, what are some of the main challenges you face when it comes to engaging with the wider sector and the regulator?

A. Putting together an application for funding is very time consuming as is the management of the project and extra record keeping required for claims. Many challenges have relatively low intervention rates – one we are involved in runs at 45 per cent. It can be a challenge for SMEs to secure both match funding and also the extra resource required to manage the projects.

 

Q. How smart is the smart revolution going to be?

A. If done correctly, the smart revolution could be the essential key to a lower carbon future. The grid has always been a challenge to manage given the large swings in demand but when you fold in variable and uncontrollable generation such as wind, solar, wave and tidal then the challenge magnifies. The traditional solution would be to build many more generators (wind turbines/solar) to over-produce and then turn off when not needed. However, if properly synchronised, smart control of millions of devices such as ground source heat pumps, electric vehicles and many others will allow the grid to function correctly without the need for over generation. This could save billions of pounds of capital investment in the drive towards a low carbon future.

 

Q. Why do UK utilities need to evolve?

A. Traditionally, consumers just consumed when they wanted to and it was up to the utilities to manage their purchasing and distribution to meet that demand. In the future, there will be a much closer partnership between generators and consumers to match generation and demand. Utilities are best placed to manage this relationship but business models and practices will have to change radically to facilitate this. If they don’t, there is a risk that this partnership between generation and consumption will happen directly – bypassing the utilities altogether.

 

Q. Can regulation be a barrier to innovation?

A. Yes, limits to the number and type of tariffs that utilities can provide can prevent innovation.

 

Q. What are the biggest disruptors facing utilities?

A. The very likely shift away from gas and towards the electrification of heat via heat pumps. There are challenges to the grid infrastructure on the electrical side and challenges to the business models for the gas suppliers.

 

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