Utility Week

24 | 21ST - 27TH JUNE 2019 | UTILITY WEEK Operations & Assets in the form of their quality regulators – the Environ- ment Agency and the Drinking Water Inspectorate. Delegates cited these regulators as taking a "zero toler- ance" approach to failure and consequently making it di• cult to innovate. They also cited several examples where Environment Agency regulation de ned speci c outputs at speci c sites, rather than replicating the out- come-based approach now favoured by Ofwat. As one delegate put it: "We have made progress [towards totex] not because of the regulator but in spite of the regulator." With a ordability riding high on the policy agenda, how are utilities prioritising their investment on asset maintenance and capital programmes? Delegates revealed that in some instances they are hav- ing to "sweat the assets", getting maximum life out of every piece of kit by prioritising maintenance over the capital expenditure required to build new assets. This approach is supported by new technologies that facili- tate condition-based monitoring. Rather than have a rolling programme of maintenance based on the age or usage of an asset, utilities can target their maintenance spend on assets that most urgently need it. Although this is a logical approach, it does create di• culties, because service must never be compromised – and delegates acknowledged that incidents such as last year's Beast from the East highlighted what they tactfully called "resilience gaps". Likewise, energy networks are moving away from pure cyclic-based maintenance, and using new tech- niques such as satellite monitoring to improve e• ciency and target investment at those assets that most urgently need it. Networks are currently signed up to an agreed set of common risk levels for each class of asset, and have to collect a signi cant amount of data to feed into the required risk assessments. According to one delegate, this model is costly and coming under a lot of scrutiny, from the regulators as well as the industry's businesses. What is the role of the supply chain in delivering a totex culture? As utilities move away from the traditional approach of " x on fail" to condition-based monitoring, the skills required to run the network are changing. A network lled with sensors requires data and technology spe- cialists to capture, interpret and act on the data they produce. For one delegate, this prompted the question: "Going forward, how much do we ask the supply chain to step into this?" Traditionally, the supply chain has built assets for utilities. Totex thinking, coupled with the emergence of new and more complex technologies, inevitably drives a major shi' in this relationship. As the management of utilities becomes more complex, the supply chain is embracing new service models, in which a supplier might, for example, build, operate and maintain an asset on an ongoing basis. Delegates added that a particular bene t of the sup- ply chain in this context is its ability to share learnings across companies and across sectors – "that's much more di• cult to do if you're operating in a silo." What role has innovation funding played in driving the adoption of totex? Delegates from the energy networks sector agreed that innovation funding has been critical in allowing them to experiment with di" erent approaches and drive a totex culture within their businesses. The example of Project Freedom was cited – a collaboration between Western Power Distribution and Wales & West Utilities, investigating multi-vector solutions to domestic heating. The learnings from such innovation projects are shared between the networks – and with other stakeholders – as a condition of the funding, encouraging a collaborative approach to innovation. It's a di" erent story in the water industry – as one delegate noted, making reference to benchmarking in the regulatory system: "We've been set up to compete against each other, and now we're being asked to col- laborate, and there's a tension there." While Ofwat has traditionally been resistant to the idea of dedicated inno- vation funding, it has recently indicated that it may be changing its position on this. continued from previous page Roundtable "We've been set up to compete against each other, and now we're being asked to collaborate, and there's a tension there." The roundtable was convened under the auspices of Utility Week Live, the premier exhibition and conference held over two days in May at Birmingham's NEC Brought to you in association with

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