Utility Week Live: Innovation – a step closer to business as usual?

In this period of transformation within the energy sector, the networks are acutely aware of the need to innovate to remain relevant and capable of servicing the evolving energy market.

As such, innovation is a hot topic at the moment, and accordingly was the headline theme Utility Week Live. One of the big points of debate between stakeholders in the industry is how long networks should be incentivised to innovate before they are left to their own devices.

Seminars throughout the event revealed just how far networks have come with this support, arguably to the point where it is now business as usual. But they also revealed just how much further there is to go, and offered a glimpse of the future if this funding remains in place.

Ofgem currently supports networks to innovate through several funding mechanisms such as the network innovation allowance (NIA) and network innovation competition (NIC). Both the NIC and its predecessor the Low Carbon Networks Fund (LCNF) have come under scrutiny in recent months as Ofgem determines if, and in what form, this support should continue. General consensus is that both have been a force for good, but Ofgem has reiterated in recent months its intention to remove support when innovation becomes business as usual practise.

Findings presented at Utility Week Live from LCNF projects nearing completion show the money spent is reaping its reward. Electricity North West’s Smart Street project has been trialling innovative voltage control techniques to optimise network voltage and minimise the impact of low carbon technologies while maintaining voltage levels. The £11.5 million has identified £350 of reinforcement savings over 25 years for each household. This may not seem like much, but multiplied up, and savings for the whole of the UK reach £8.6 billion over the 25 year period.

Results are not just monetary savings. UK Power Networks’ storage project, again funded through the LCNF, at Leighton Buzzard has allowed it a position of influence on the ongoing discussions on the future of energy storage. It expects to publish the business case for DNOs using energy storage in the next couple of weeks.

This type of innovation supported by the NIC was heralded by Maxine Frerk, formally the head of networks at Ofgem as the real success of the move to the RIIO price control model.

She cited the move of UK network operators from lagging behind the rest of Europe to leading the pack as the thing she was most proud of in the new regime.

So are networks there? Has innovation received enough attention and this is now an area where cuts can be made? UK Power Networks’ director of safety, strategy and support services Suleman Alli. He told delegates “technology is not our barrier, it’s our ambition.”

The technology pitches given by innovative start-ups back Alli’s proclamation. While also exhibiting in the Innovation Zone, supported by the Energy Innovation Centre, the sheer breadth of technology under development is overwhelming. Almost no corner of the energy business could, and probably is, being improved through innovation.

Network operators are actively supporting many of these companies, often in the early stages of development, through the NIA. With funding removed, it could pull into question network operator’s willingness to foster such early stage development, and that would be to the detriment of the environment, customer service, and ultimately consumer bills.