Future Networks Conference: Networks head into uncharted territory

Delegates at the Future Networks Conference heard that standardisation, innovation and vulnerable customers are just three of the challenges networks face in the future, says Tom Grimwood.

As Britain seeks to decarbonise its energy system, networks face tough challenges. They will need to absorb a growing volume of intermittent renewables, replace petrol pumps in the age of electric vehicles as consumers start charging their cars at home, and facilitate the decarbonisation of heating in whatever form that eventually takes. This means networks must become smarter, more flexible and more closely integrated.

At the Future Networks Conference in Birmingham, speakers set out a list of obstacles that networks must overcome to achieve this.
Towards the top was standardisation. The smart technologies that network operators are developing and testing will have to be able to work alongside each other when they are deployed in the real world. This means industry-wide technical standards are essential.

Speakers largely agreed that the industry should set common standards by itself to avoid the imposition of restrictive rules and regulations by government.

Daniel Westerman, head of network management at National Grid Electricity Transmission, said: “An industry that talks to itself properly and really makes sure it understands one another’s needs can make it a whole lot simpler.”

However, there was less agreement about how quickly the process should move forward. Westerman said it was too early to begin setting standards, because to do so now would “stifle innovation and limit our ability to change”.

Colin Taylor, director of engineering services at SP Energy Networks, thought otherwise: “I do fundamentally believe that there are a number of technologies, in active network management for example, which are at the stage where we do need some standardisation.

“One of my frustrations is how to roll things out at scale when there’s a number of bespoke products – bespoke IT products, sensors – that wouldn’t necessarily work with each other.”

Another hot topic was how to encourage the development of innovative technologies in the first place – particularly given the under-utilisation of the funding available through the Network Innovation Allowance and the Network Innovation Competition.

Geoff Randall, associate partner for RIIO gas networks, Ofgem, said the regulator is considering cutting back the processes that operators have to go through to access funding, making them “less burdensome and easier to manage”. Over the longer term, he said it is also looking at ways to incentivise innovation in the next RIIO period so it becomes part of networks’ business as usual.

Beth Chaudhary, head of smart energy policy at the Department for Business, Energy and Industrial Strategy (BEIS), said government is working to reform an “outdated” regulatory system that can sometimes act as a barrier to innovative for technologies, for example by ending the double charging of storage.

She said government had an essential role to play helping companies to bridge the “valley of death” between an initial idea and commercial rollout.

There was also discussion about the impact of network transformation on customers, especially those who are vulnerable and disengaged – and less likely to see the benefits of load-shifting.

“We do have to recognise that there will be people who either can’t engage or are unwilling to engage,” said Colin Taylor of SP Energy Networks. He told delegates there will be a “real difficulty” in finding a balance between encouraging flexibility and achieving equitable outcomes.

Chaudhary said evidence showed that working in partnership with specialist organisations, was the “best way”. However, on the broader issue, she conceded: “We don’t have an answer yet.”

This refrain was repeated by speakers on a range of different issues – from innovation and standardisation to electric vehicles and the future of heat. Networks face a difficult journey; not only are there numerous obstacles to overcome but much of the route remains uncharted.

From the floor

Geoff Randall, associate partner for RIIO gas networks, Ofgem

“When we started RIIO we always said that [the NIA and NIC] would be a time-limited stimulus. We didn’t want it to become business as usual… So we are going to be asking ourselves: ‘Are there ways to do the trials without a direct funding source?’”

Daniel Westerman, head of network management, National Grid Electricity Transmission

“I think one of my biggest fears is what happens at the tipping point for the total cost of ownership for consumers using electric vehicles versus internal combustion engines, and whether we have insufficient infrastructure for that transition.”

Stewart Reid, head of asset management and innovation, SSE

“Don’t become an innovation funding addict… It’s really easy to just sit there in your comfort zone. It’s amazing what you learn when you stop using innovation funding and actually do something for real.”

Colin Taylor, director of engineering services, SP Energy Networks

“I do fundamentally believe that there are a number of technologies, in active network management for example, which are at the stage where we do need some standardisation. One of my frustrations is how to roll things out at scale when there’s a number of bespoke products – bespoke IT products, sensors – that wouldn’t necessarily work with each other.”

Paul Bircham, networks strategy and technical services director, Electricity North West

“Liquidity is a real challenge [for local energy markets] because a lot of the constraints we will be looking to manage will be very localised constraints… A series of local markets looking at managing a number of dual network constraints in certain areas may be needed to get that liquidity.”

Five key points

1. Standardisation. Networks need to start driving forward the standardisation of smart technologies to avoid the imposition of rules and regulations by government, which could stifle innovation.

2. Collaboration. Utilities must collaborate to learn from each other’s experiences and to enable industry-wide action such as standardisation.

3. Prioritisation. Utilities need to see innovation as a core part of their businesses rather than an optional extra. This means allocating sufficient resources – time as well as money.

4. Determination. Networks will face numerous obstacles when trying to develop an innovative idea. They cannot wait for all the barriers to be lifted before pressing ahead.

5. Look outside of the sector. Networks should look beyond their sectors for help in developing innovative products and services. They should also view other sectors as potential markets for those products and services.