Utility Week

UTILITY Week - 12th February 2016

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6 | 12TH - 18TH FEBRUARY 2016 | UTILITY WEEK People & Opinion RIIO is delivering for customers The incentives provided by UK regulation encourages innovation, to the benefit of everyone. Chief executive's view John Morea, SGN Energy A t SGN we enjoy a 50 per cent overseas ownership and these investors, like others from around the globe, have taken to the longer-term certainty the UK's utility regula- tion still offers. Whenever I'm talking to chief executives from my shareholders' international portfolios, I'm struck by their interest in our regulatory sys- tem, in particular RIIO. It seems Ofgem's price control is attract- ing plaudits and for good reason. Namely the eight-year regulation timeframe, the strong incentives in place for innovation, the link- ing of incentives to outputs and also the real benefits coming to customers. To our investors RIIO provides the opportunity to plan, not just for the short and medium terms but for the long term. One key element of RIIO is the "I" representing innovation, and through embracing it with industry-wide collaboration, they can see how we've used RIIO to deliver for our custom- ers. To take innovative ideas, processes and techniques from concept to being fully embed- ded is not a five-minute affair. In SGN there are three areas of innovation which excite me and our investors the most and it's no coincidence they've sprung from Ofgem's Network Innovation Competition. First, in Oban we've been demonstrating how we can open up the gas market to other forms of non-conventional gas, such as biomethane, offering a potential to deliver £325 million of annual savings to UK customers. Second, under the incentive scheme we've been developing state-of-the-art robotics to mend gas pipes from the inside. This ground-breaking technique is now seeing the repair and refur- bishment of large diameter pipes while at the same time enhanc- ing safety and reducing cus- tomer disruption. Finally, in the past two months through the Network Innovation Competition, Ofgem has approved our plans to develop a "real-time" gas net- work in one of the Kent Medway towns with the aim to support more renewable gas and down- stream renewables. We'll be installing sensor technologies, measuring variables such as gas flow, pressure, temperature and gas quality. As well as enabling greater volumes of renewable gas into the network, it could also lead to a reduction in emissions by opti- mising the pressures at which networks operate. All of these and other initia- tives coming through RIIO have potential to bring real benefits to UK gas customers. They not only share in today's efficiency gains but the long-term benefits mean savings will be "baked in" to the next RIIO price control as well. Delivering on innovation will in turn deliver a return to homegrown and overseas inves- tors and ultimately provide the industry the secure future it deserves. "The proposed nuclear site at Hinkley Point C will surely be used as a benchmark in future for how not to manage a new infrastructure project" William Pett, consultant at JBP Energy – to read the full market view, visit bit.ly/1T3i9c9 "This will be difficult news for those affected, but I believe today's announcement is in the best long-term interests of the business" Centrica energy and supply services chief executive Mark Hodges on the news British Gas will cut 500 jobs as it closes its loft and cavity wall insulation business. John Morea is speaking the 2nd annual Utility Week Future Networks conference in Bir- mingham on 15 March 2016. For more information, visit: www.uw-futurenetworks.net Energy Catapult The Energy Sys- tems Catapult has appointed Professor Neil Strachan as a non-executive direc- tor. He is also deputy director at the Energy Institute. EXECUTIVE APPOINTMENTS

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