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UTILITY WEEK | 18TH - 24TH SEPTEMBER 2015 | 3 Leader Ellen Bennett This week 4 | Seven days 6 | People & Opinion 9 Policy & Regulation 9 | News Corbyn win reignites state control debate 10 | Market view Grid-scale storage could replace back-up fossil fuel plants 12 | Analysis Last-minute go-ahead for water market 15 Finance & Investment 15 | News Eon hit as Germany closes legal loophole 16 Operations & Assets 16 | High viz Low-head hydro at Thrybergh Weir in Yorkshire 18 | Analysis Assessing the success of the Low Carbon Networks Fund 22 Customers 22 | News Ofwat to hold retail margin at 2.5 per cent 23 | Market view How customer segmentation can boost your business 24 | Market view More than three-quarters of tenants have never switched 25 Markets & Trading 25 | News Renewables risk puts premium on power 28 Community 28 | Research How enthusiastically do utilities embrace innovation? 31 | Disconnector For utilities, sharing is the key to innovation Innovation is one of those buzzwords that seem to appear overnight, coming from nowhere to suddenly be on everyone's lips – at every conference, at every speech, in every policy. Sometimes such buzzwords are a bit empty; a bit meaningless. For utilities, "innovation" is anything but. As traditional, asset- based engineering businesses attempt to transform into modern, customer-focused service businesses, while continuing to invest in infrastructure and keep prices down, innovation is more than a buzz word. It's an essential mindset. But what does it really mean? Arguably, there are two types of innovation. The first concerns doing the same things a little bit bet- ter – finding a slicker, safer or more efficient means of conducting business as usual by refusing to do something one way just because that's how it's always been done. The second is visionary, game-changing innovation that turns business-as-usual on its head. The energy networks sector has had a regulatory shot in the arm for innovation aer decades of dwindling investment in R&D as the regulator sought to cut costs. The Low Carbon Networks Fund has by any standards been a success, and we explore some of its lessons on pages 18-20. Key to its success has been not only the dedicated funding, but the obligation to share the findings between networks and internationally. With luck, its successor, the Network Innovation Allowance, will continue the good work – though there are worrying signs that the stream of early wins is drying up, with applications for funding said to be falling fast. All the more reason, then, for companies to look outside their own businesses when seeking innovation. I was lucky to attend the Energy Innovation Centre's summit on innovation in customer ser- vice this week, and saw first-hand how bringing gas and electricity networks together to solve real-life problems, drawing on examples from other industries, can have revolutionary results. Energy networks have been setting the pace on innovation, and other utilities sectors could learn from their successes. The results of our first Innovation Barometer, a survey of CIOs, CTOs and directors of innovation carried out in association with Wipro, suggest there is still much work to do. More than 45 per cent of respondents say their organisations do not invest enough in innovation; nearly 70 per cent say that while embedding innovation in the business is a strategic priority, they are not there yet. Turn to p28 for the full story. Ellen Bennett, Editor ellen.bennett@fav-house.com GAS 23 | Market view Customer segmentation 23 | Market view Making switching simpler for tenants 28 | Research Utilities embrace innovation WATER 9 | News Market opening to be confirmed in 2017 9 | News Ofwat 'should step back in price control' 12 | Analysis Water reform gets tougher ELECTRICITY 10 | Market view Baseload renewables? 15 | News Clean energy fund targets Highlands 16 | High Viz Hydro at Thrybergh Weir in Yorkshire 18 | Analysis The Low Carbon Networks Fund ENERGY 15 | News Policy changes make investors nervous 15 | News Engie targets B2B energy storage 17 | Pipe up Andrew Beasley, Flow Energy 22 | News Suppliers creating 'meter mountains' 22 | News DCC 'will be ready on its go-live date' 22 | News Disconnections for debt fell in 2014 Knowledge worth keeping Visit the Downloads section of Utility Week's website http://www.utilityweek.co.uk/ downloads CGI: Market Ready? UK water companies in countdown for competition http://bit.ly/1EZCrbl Opower: Moments that Matter http://bit.ly/1BOm5SV