Utility Week

UTILITY Week 30th October 2015

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UTILITY WEEK | 30TH OCTOBER - 5TH NOVEMBER 2015 | 29 Community Date for your diary Utility Week Congress 2016 will take place on 19 & 20 October at the Birmingham Hilton Metropole. To enquire about speaker opportunities, contact Dominica Andrews: dominicaandrews@ fav-house.com With thanks to our sponsors: The service incentive mechanism (SIM) introduced to drive up cus- tomer service levels in the water industry was a focus of debate on day one of Utility Week Congress. While widely recognised as having been an effective driver for improved customer service in the sector, concerns were raised about the unintended consequences of the measure. Northern Ireland Water's customer service director, Liam Mulhol- land, said he had concerns that SIM is creating "a world of computer game cheats" where water companies make gaining a good SIM score their objective, rather than focusing their efforts on the reality of cus- tomer experience. This is not the way to build trust with customers, Mulholland said. The consumer will not appreciate a high SIM score if it does not reflect their own experience. Thames Water's chief customer officer, Andrew Reaney, agreed that the "size of the penalties and incentives can deliver the wrong behaviours". However, neither Reaney nor Mulholland were opposed to the continuation of SIM. The former described it as being "a blunt instrument" but one that broadly achieves the "desired outcome". The Institute of Customer Service's chief executive, Jo Causon, meanwhile shared her ideal of a world in which exemplary customer service exists without the need for regulatory measure or prompts. The benefits and potential pitfalls of using SIM to incentivise excel- lent customer service will also spark debate at Utility Week's Water Customer Conference, 20 January 2016. Find out more at www.uw-watercustomer.net SIM – unintended consequences INTERVENE FOR INNOVATION One of the closing sessions at Utility Week Congress 2015 brought the requirement for regulatory intervention for the benefit of innovation to the fore. A panel of experts including: Nick Winser, chair of the Energy Systems Catapult; Paul Bircham, network strategy and technical services director, Electricity North West; and Iain Miller, head of system design, Northern Powergrid, discussed the strategies and technologies needed to realise a future of smart, flexible and integrated energy networks. The debate quickly showed a range of broadly aligning opinions on the need for more clarity around how market mechanisms are going to adapt to allow electricity and gas distribution networks to participate fully in demand-side activities and local balancing. At the moment, while demonstrator projects are proving that the technical solutions for network engagement in demand- side and smart frequency management are ready to be deployed, there are conflicts of interest between established National Grid mechanisms, like Stor (short-term operating reserve) and the nascent market for more localised demand-side response. Furthermore, said Bircham, interventions need to be made so that networks can be sure of achieving returns on innovation investments. Today, he said, there is no certainty about how the revenues networks earn via innovative new systems that engage consumers in balancing services will be treated by the regulator in the future. Without being confident of returns, the incentives for networks to take the risks inevitably associated with bringing innovative ideas to market are unclear. "Community engagement really is for life, not just for a regulatory review." Simon Cocks, chief executive, Affinity Water "We have to resolve delivery concerns – very clearly, very quickly and very transparently – to make sure that smart metering is delivered at an acceptable cost and experi- ence for customers, and we have to get it right first time, because there is only one time." Sara Jane Asquith, director of smart and metering transformation, SSE "We spend a lot of time ana- lysing transition pathways and how we get towards low carbon, and it's very clear that heat plays a very significant role in that." Jo Coleman, director of strategy development, Energy Technologies Institute "We need to innovate and improve, as do our competi- tors. That sort of innovation is what you might call incre- mental innovation – how we build a better energy retail market. But the bit that's really interesting is the potential for retail market disruption – in 20 years' time the concept of needing an energy retailer might completely disappear. That's quite alarming if you're an energy retailer." Will Siddall, head of innovation, data and analytics, RWE Npower

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