Utility Week

UTILITY WEEK | SEPTEMBER 2022 | 29 Technology traditionally prioritised by utilities and regu- lators alike, incremental changes o en have the most impact on a company's day-to-day operations and sta on the ground. Lee Colvin, investment programme man- ager at Southern Water, says optimisation can essentially be a form of innovation – the process by which utilities make changes that can have a signi• cant e ect on performance and e• ciencies. "In terms of optimisation, the focus is on innovative techniques and technologies that can help you make pro- gress in a particular area," he explains. "For us as a business, it is about thinking di erently and then demonstrating the ben- e• t and value of that change." Philip Sandy, director at National Grid, says incremental change provides the build- ing blocks for wider transformation across businesses and the wider industry. "I don't consider them to be two separate things," he says. "At a macro level, you might be talking about engineering innovation and solving the problem of how to make a wind farm and an interconnector work together technically – that is the transformative piece. But then if you break it down, there are perhaps 300 little problems that you need to solve along the way. I think the two things are intrinsi- cally linked." Reassuringly, our survey shows that pro- cess optimisation is high on the agenda for both the energy and water sectors. According to 79% of water companies, process optimi- sation is important or very important to their business, while the same is true for 88% of energy companies. Implementing change While the impact of climate change is an urgent concern requiring urgent action, the value of some process changes that are implemented today might not be fully real- ised for years to come. Utilities face a complex challenge as they seek to secure investment and stakeholder buy-in for optimisation that can help compa- nies meet a combination of immediate and longer-term objectives. While the industry has traditionally quan- ti• ed the value of process changes according to the • nancial impact, Archie Lasseter, sus- tainability lead at Utilita, insists that carbon impact is increasingly moving up the agenda for utilities. "When a business changes a pro- cess or if someone suggests a change to help drive e• ciencies or to deliver better, utilities are very good at quantifying what happens • nancially," he says. "Now, we are getting more involved in trying to answer the carbon question. What does that change mean for our carbon footprint? What does it mean for the carbon budget this year? And how do we make it happen in a way that is smarter and more e• cient?" However, tracking and measuring carbon is not enough. Businesses must implement tools and expertise that allow them to trans- late carbon cost into more tangible mean- ing that engages various stakeholders, from chief • nancial o• cers to consumers. Accelerating the net-zero transition Ofwat and Ofgem have set out ambitious priorities for decarbonisation, as well as underlining the importance of improving resilience, maintaining quality services for customers, and driving down costs. A clear data strategy is pivotal to successfully deliv- ering against these objectives. Data provisioning is a key issue for the industry, but our survey shows that a lack of data is not the biggest barrier to optimisa- tion. This suggests that while reams of data are being gathered, managing it and ensur- ing it is accessible to all stakeholders is a very di erent issue. Overall, 59% of respond- ents said a lack of data is the biggest barrier to optimisation, alongside a lack of skills and in› exibility created by regulatory regimes. The biggest blockers that were identi- • ed as impeding optimisation, according to respondents, are a perceived in› exibility in business processes (64%) and a lack of time¢(68%). While lack of investment is o en touted as a barrier to optimisation and innovation, our survey shows that just 41% of respond- ents considered lack of funds to be a major barrier. Sandy says a low corporate appetite for risk can o en lead to an in› exible approach to change and innovation. However, to overcome this barrier, he believes there is a balance to be struck between leadership teams empowering their people, and the workforce themselves taking the initiative to drive¢change. "We need to make sure we are setting out the right strategy so that people are given the time and space to do this. I think empower- ment is crucial," he says. "Leadership is the key thing here because teams have to feel they are trusted to do the right thing, as well as giving them the space to fail in the right way. "The willing- ness to fail incrementally and fail forward is so important. Businesses have to have pro- cesses in place that allow people to fail early. The result is that people feel empowered and that there is no retribution for bringing new ideas forward." Nadine Buddoo, intelligence editor in association with Discipline-specifi c view of optimisation Asset 80% of respondents with asset-related job roles agreed that there were processes in place within their business to capture, assess and implement ideas for process optimisation. All asset respondents agreed that their business incentivises optimisation in project delivery. 20% of asset respondents said that external stakeholders – for example, supply chain contractors – are • nancially incentivised to deliver optimisation. Project management and operations 67% of respondents did not feel that senior leadership teams encourage a supportive culture where new approaches and technologies are welcomed to help improve business processes. 50% of respondents said that their busi- ness does not incentivise optimisation in project delivery. None of the respondents agreed that external stakeholders are • nancially incentivised to deliver optimisation. Innovation A supportive culture is prominent within the business, according to respondents in innovation-related roles. 90% said that senior leaders support trying new approaches and technologies. 60% of respondents agreed that their business has processes in place to capture, assess and implement ideas for process optimisation. Just 10% believed their business does not incentivise optimisation in project delivery. Download the report A pdf of the report Balancing Risk and Security on the Road to Net Zero will be available soon at the downloads section of utilityweek.co.uk

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