3 things we learned at LCNI day 1

Hundreds of innovation and engineering leaders from across the UK’s power and gas networks – and their supply chains – are gathered in Liverpool this week to share the learnings from projects which pave the wave way for energy system transformation. Jane Gray reports key outcomes from day one.

Now in its third year, a real sense of expectation has built within the energy networks industry for the Low Carbon Networks & Innovation Conference to keep raising the bar for innovation across the UK’s electricity and gas transmission and distribution networks.

The peripatetic event organised by the Energy Networks Association (ENA) and hosted each year in a different network jurisdiction is set this year in Liverpool – home to co-host SP Energy Networks – and is by far the largest iteration. Originally designed to help the electricity networks fulfil their requirements to disseminate the outcomes of government funded projects under the Low Carbon Network Fund it has now become a platform for broader agenda setting, not only for smarter electricity grids, but also for gas.

Day one of this year’s conference made it clear that:

• We’re a long way from a whole system view of energy transformation
• Market barriers are keeping some key innovation outcomes from becoming business as usual
• Effective customer engagement requires investment

A whole system view

It’s a sign of the increasing innovation ambition of the network companies that the question of system integration was faced head on during day one of LCNI 2015.

Nick Winser, chair of the Energy Systems Catapult was the first to raise this thorny issue in his keynote presentation, but leaders within the industry returned to the problem in panel sessions and informal debate.

What came out of these discussions was a clear will to do more to collaborate across the electricity and gas sectors, and to include heat networks, in projects which seek to find energy system flexibility and overall decarbonisation. The idea that a focus on decarbonisation of electricity will be the primary means for creating a wider low carbon economy with electrified heat and transport is bunk, said Alan Whitehead, shadow minister for energy and climate change.

Instead, there was a general and enthusiastic acceptance that a more complex challenge lies ahead in creating decentralised, interconnected energy systems with the ability to deflect load from one energy vector to another.

Behind the enthusiasm for this vision however, lies significant uncertainty. Delegates suggested that government’s much trailed energy reset – announced last week – failed to set an agenda for decentralisation and there’s considerable controversy attached to debate about whether a system architect is required to centrally set and administer the technical interactions that it will require.

The Institution for Engineering and Technology’s system architecture investigation was mentioned several times – and broadly welcomed as a necessary step in clarifying pathways to the future, however it was also repeatedly pointed out that any potential system architect should ideally arch across the energy system – not just electricity. As yet, this is out of scope.

Market barriers to innovation

The central theme of this year’s LCNI conference is “innovation to business as usual” an acknowledgment of a criticism often levelled at the energy networks that the time, expense and effort spent in proving the application of new technologies and smart ways of working often fails to translate (or at least not quickly) into tangible and significant changes in the real world.

Many delegates and speakers at LCNI would no doubt refute this and point to numerous examples of open and closed innovation projects which have resulted in changes to day to day operations and efficiency.

However, questions levelled at panellists yesterday and comments made during presentations nodded to the fact that market barriers are preventing some innovations from realising their potential – and by association are blocking the transformation of distribution network operators (DNOs) from becoming distribution system operators (DSOs) or preventing the evolution of the gas system.

New commercial mechanisms need to be created to allow DNOs to participate fully and competitively in the demand side response market for instance and DNOs need to be able to contract directly with National Grid for the provision of balancing and flexibility services if they are to become DSOs. It was also made clear that rules around the need to process sustainable and novel sources of gas before introducing them to the grid need to be revisited. These rules are founded in an era of abundant North Sea gas and are irrelevant to today’s world asserted SGN’s Angus McIntosh. It adds significant cost to operations, making the growth of flexible and sustainable gas networks difficult.

Further to these direct barriers to energy network evolution, one question suggested that rules around supplier tendering are discouraging innovative SMEs from committing fully to open innovation with energy network operators. During a panel Q&A a delegate asked if it was fair that small firms who do the leg work on technical innovation during trials, should then be required to tender to work with their project partners on the application of solutions they have developed.

Any hamstringing here is important to address as energy networks seek to improve collaboration and develop service-based business models.

Customer engagement

Breaking up a day of high level policy and landscape review on day one of LCNI were a series of innovation project reviews which focussed on customer experience – an increasing point of focus for energy network operators across gas and power.

These detailed case study presentations showed that it’s all too easy to take a box ticking approach to customer engagement which garners few results and, in worst case scenarios, can actually end up damaging network reputations with individuals and communities.

The presentations showcased transformation journeys for customer engagement in association with four innovation projects across both the electricity and gas sectors. With admirable frankness, speakers shared their failures as well as their triumphs and proved that effective customer engagement, making best practice use of digital technologies, brand management principles and social science, is as much an area for innovation as the technical challenges of grid management and decarbonisation. Done well, it can be a key enabler to technical innovation, and open up opportunities for improving the safety of customers in their homes.