The innovation race for the UK power network
By Dr. Edward Colby
Research by Ernst & Young suggested that smart grids could save the UK Â£19 billion on its energy costs, net of the cost of investment. Smart grids are a smart move, but they won't happen on their own, or at least not quickly. The UKâ€™s regulatory regime for electricity suppliers and providers is focused on price, not innovation, and does little to encourage new technologies.
The U.S. now has a thriving smart grid sector and its finger well and truly on the smart technology pulse. For example, President Obama has set up a $4bn (Â£2.5bn) co-investment fund to back businesses that invest in smart grids. Supporting this view, a recent report from SmartGrid GB argued that the UK must move quickly to secure its leading position on smart grid technology or risk losing out on a Â£5bn export market and 10,000 skilled jobs. It warned that while the UK is currently well-placed to lead the development of smart grid technologies, a lack of ambition could see it lose its position to overseas competitors, such as the U.S., China and South Korea.
In order to make the most of the UKâ€™s new methods of energy generation, and to allow for the extra capacity that will be required for future demand, for example, electrification of heating and vehicles, investment in the smart grid is a necessary requirement. Combine this incentive for new technologies with the abundance of small companies coming up with pioneering products in the UK and it is clear that the UK should be leading the way in innovation in the power network.
Ofgem is providing Â£500m over the next five years through the Low Carbon Network Fund (LCNF), which is designed to help address the mis-match between timescales, and there are other measures in place to encourage innovation, for example the Innovation Funding Incentive (IFI) scheme and Technology Strategy Board (TSB) funding which supports business-led innovation. The LCNF allows DNOs to recover costs of investing in innovation, as they have to deliver customer benefit, for example reducing outages.
Such schemes are undoubtedly positive for the industry, but we need to look at what we can learn from them and how we can improve even further. There are an abundance of small British companies focused on innovation, for example the recently announced winners of the Queenâ€™s Award for Enterprise. The UK must provide better access to funding, support and entry points to these small companies who have valuable and commercially viable innovations.
To realise a truly smart grid, DNOs and other large organisations in the sector need to ensure that they are tapping into innovation and expertise by employing a more collaborative approach and working with specialist partners. One example of this could be testing new products jointly to speed up the process and make it more cost efficient.
Technology alone is not enough to produce this change; communication is an essential tenet of good innovation. Bringing together individuals who understand the problem that needs to be solved and matching these with innovators who may be able to create a solution, will result in a product or offering that meets market needs. Too often these conversations take place at a high level, when in fact getting the engineers on both sides to collaborate would produce an end product that is focused on genuine pain points. A useful comparison can be made with the software industry, where it is common for developers to get together for conferences and coding events such as Googleâ€™s Summer of Code. It is this type of collaboration that enables innovation to thrive.
There is now an Energy Innovation Centre which may help to facilitate communication between smaller innovators and the utilities and network operators, with the aim of improving the power networks.
Collaboration in action
There are specific challenges facing SMEs wanting to enter the smart grid market and a collaborative approach can help to successfully overcome these obstacles. Some of the challenges and solutions are highlighted in the following case study which demonstrates this collaborative approach in action and how the outcome can be beneficial for both SMEs and larger companies.
Sentec has partnered with SELEX Galileo, a Finmeccanica company, to launch GridKey â€“ a low voltage (LV) monitoring solution that uses Sentecâ€™s innovative sensor technology, with SELEX Galileo providing the metrology and communication part of the system. This partnership is a fine example of how a large company is able to take advantage of the expertise of a smaller, specialist partner, while the backing of a larger organisation enables the smaller company to take a product through trials and provide a convincing case for capability to scale up to and meet high volume production. The project is already delivering results, less than a year after agreeing the specifications with key DNOs, with production systems provided to the first customer.
If the UK is to leave countries like the U.S. and China on the starting blocks, it is crucial to create an environment where innovation can thrive and be taken through to successful commercial implementation. We have many small innovating companies and power networks crying out for a major upgrade to take us into the future with a secure, sustainable power supply. Combining this innovation-friendly environment with the UKâ€™s home grown engineering skills will help deliver a truly smart grid.
Dr Edward Colby, Chief Technical Officer, is responsible for driving the development of Sentecâ€™s own technologies for exploitation through licences with companies in the energy sector. Under his management Sentec has developed a concentrated IP portfolio of metering solutions in gas, water and electricity, with a pipeline of projects in advanced functionality for meters.
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