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UTILITY WEEK | 7TH - 13TH OCTOBER 2016 | 7 Interview P eter Emery is the new guy in the electricity distri- bution chief executive gang. He joined Electricity North West (ENW) in May aer a turbulent winter for the distribution network operator (DNO) and just before the Brexit vote seized the UK business landscape and shook it like a snow globe. Installing himself between these two sources of worry, Emery has been careful to take time to bed in, to get to know the business, its people and the industry – which are all new to him. That said, Emery isn't the sort to conform to the sta- tus quo for long without questioning its rationale. When Utility Week meets him at ENW's central Manchester office he admits, with a smile, that "I've never worked in anything like it [regulated utilities]" and it's not long before he's revealed some developing views about areas of opportunity – internally and externally – where a fresh approach could bring benefits. Perhaps foremost among these are his thoughts about the challenge that is on everyone's lips in the energy sec- tor today – innovation. As the UK seeks to decarbonise its energy system and embrace a wave of decentralised, smart technologies, electricity networks have come under pressure. Despite challenges to the design of a system that was not built with decentralisation in mind, networks have been pushed to teach old assets new tricks, bring in fresh gadgets and create novel ways of influencing demand – or be blamed for holding up the march of green progress. ENW is no exception and, among DNOs and the tech- nology supply chain, it has a quiet reputation for being one of the most receptive organisations to innovative ideas. Emery duly notes the great work his employ- ees have done to wring value from innovation schemes funded under the Network Innovation Allowance and the Network Innovation Competition, provided by the regulator to incentivise DNO transformation – a move that Emery also commends. These schemes have allowed ENW to develop exciting approaches to active network management, to prototype frequency control for local balancing and to experiment with new demand-side contracts to enable energy stor- age connections – for which there is growing demand in its license area. Emery celebrates all this, but then lets his commercial mind, forged with organisations such as Exxon Mobil and Drax, shine through. "One of the challenges for me, and I'm sure it will be a question our shareholders ask us oen, is: how can we bank the cheque for this [innova- tion work] for Electricity North West?" Is Emery suggesting DNOs should be able to enjoy unregulated returns on their applications of innovation? "I think it is something that we need to explore," he confirms, calmly. "The more successful you are… you want to do more of it. But I am not running a charity." It's an interesting thought, though one that many tra- ditionalists in the world of regulated utilities and pub- lic service delivery might find uncomfortably radical. Wouldn't it mean that companies ought to be obliged to put more of their own money behind innovation, rather than relying on regulated, consumer bill-funded pots? "That's quite possible," says Emery, unfazed. "We are starting to have these conversations internally about what is the best way to fund these things. I think the gov- ernment funding is working well. I think it is moving the industry forward quickly and we are very keen partici- pants in that. But there might be other ways to bring more funding to bear and to increase the pace of innovation." Does Emery think other DNO executives would sup- port this direction of travel? Emery shrugs the question