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UTILITY WEEK | 28Th NovEmbEr - 4Th DEcEmbEr 2014 | 3 Leader Ellen Bennett This week 4 | Seven days 6 | People & Opinion 8 | Interview cathryn ross, chief executive, ofwat 12 | The Topic The state of electricity storage 17 Policy & Regulation 17 | News ofgem to fund eight network projects 18 | Market view cold snap 19 Finance & Investment 19 | News Severn Trent to axe 500 jobs despite gains 20 | Analysis Energy company financial results round-up 22 | Analysis The IEA's world outlook looks gloomy for gas and nuclear 24 Operations & Assets 24 | High viz National Grid 26 Markets & Trading 26 | News UK wholesale power market 'opening up' 27 Customers 27 | News Sutton and East Surrey extends pilot 28 | Event The connected customer Accenture roundtable 30 Community 30 | Reader of the week Gary Jones, Energy coast University Technical college 31 | Disconnector Networks innovation is a good-news story Some good news this week, as Ofgem handed the networks an early Christmas present in the shape of £46 million for eight innovation projects. These awards include the last round of funding for power networks from the Low Carbon Networks Fund (LCNF), as well as the gas and electricity Network Innovation Competitions (NIC). Power networks will move to the NIC model next year, when the LCNF comes to an end and RIIO-ED1 kicks in. The LCNF has been a resounding success. It has fostered a new culture of innovation in a sector where research and development had been all but wiped out by years of RPI-x. As Energy Networks Association chief executive David Smith writes in our Chief Execu- tive's View column this week, the fruits of the competition were on show in Aberdeen at the LCNI conference last month – and they were astounding (p6). Both the networks and Ofgem can be truly proud of this partnership, which has delivered tangible benefits for companies and customers, and put the UK at the forefront of global innovation in this space. It would be a tragedy if this advantage was lost with the end of the LCNF. Industry sources report that the early signs for its replacement, the electricity NIC, look promising. Ofgem must now ensure there remains a business incentive for networks to invest in innovation. Fair enough, the regulator wants to save customers money, but if it is over-zealous in clawing back sav- ings, it risks undermining the business case for innovation. As the networks look to their future, with all the new threats and challenges that entails, innovation has never been more important. It's a question of survival. • There were red faces at National Grid and SSE this week follow- ing our revelation that Peterhead, one of the three power stations contracted to guard against blackouts this winter, failed its test run. The national significance of Jillian Ambrose's scoop was recognised by papers including the Financial Times and The Daily Telegraph – but the cause of the failure remains a mystery, with SSE and National Grid each insisting it's something for the other to disclose. It's time to come clean, we think. Read more on pages 4 and 26. Ellen Bennett, Editor ellen.bennett@fav-house.com GAS 19 | News centrica earnings revised lower WATEr 8 | Interview cathryn ross, chief executive, ofwat 17 | News Northumbrian starts £5m sewer upgrade 19 | News Severn Trent to axe 500 jobs despite gains 19 | Stock watch Severn Trent 25 | Pipe up Paul mullord 27 | News EU Sutton and East Surrey extends social tariff pilot ELEcTrIcITY 12 | The Topic The state of electricity storage 18 | Market view cold snap 20 | Investor view Peter crampton 24 | High Viz National Grid ENErGY 6 | Chief executive's view David Smith, ENA 17 | News ofgem to fund eight network projects 20 | Analysis Energy company financial results 22 | Analysis The IEA's world outlook looks gloomy for gas and nuclear 28 | Event The connected customer Accenture roundtable Knowledge worth keeping Visit the Downloads section of Utility Week's website http://www.utilityweek.co.uk/ downloads Diligent: British Gas gives board portal a warm reception http://bit.ly/1sAvsnw Rolta: White Paper: Pull yourself together http://bit.ly/1qPuBgR