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If gas networks are to convincingly argue a case for their existence in a low carbon economy, they must embrace this diverse future and ensure they are not perceived as defensive or anti-progress. Presentations and comments made at LCNI seemed to suggest that gas networks are moving in this direction, although there is scope for better co-operation with the district heating lobby. Asset performance management will change the world A whole host of technologies on display at LCNI promised to help networks become smarter and more efficient. These ranged from relatively humble gadgets to snazzy robotics, virtual reality and, notably, so•ware. In a digital age, many long-standing network technology partners now see the provision of clever so•ware packages that enhance and advance the capabilities of existing physical assets as the most significant opportunity for smart network operation. And among these new so•ware systems, asset performance management solutions are arguably attracting the most attention. Big suppliers such as ABB and Schneider Electric – which was the lead sponsor of LCNI this year – were keen to talk about the real-life returns that advanced asset performance management has brought to early adopters. They were also keen to emphasise the compelling business case for more widespread adoption of these systems at a time when networks are trying to get more out of ageing assets and to transition into a world of whole-life asset investment planning under totex regulation. Beyond enabling better investment planning and asset monitoring, however, asset performance systems could also bring about a revolution in network maintenance operations – transitioning from time-based approaches to more intelligent condition- based strategies. The idea of using asset data to curtail unnecessary trips to remote assets and spot developing problems in assets that are not yet due for check-ups is not new. It has been around for at least a decade. Networks have, however, been slower to realise the benefits than other sectors – such as power generation. Today, new pressures to increase efficiency – and the emergence of new "failure modes" for assets as a consequence of new ways of operating the system – are forcing outdated approaches to asset management to change. NETWORK / 20 / NOVEMBER 2016 In a world of two-way energy flows, local system operation and cross-vector energy, networks must embrace smart asset performance strategies, say providers. Those that do will see rapid payback on their investment, they add. Up to 20 or 30 times the upfront system costs could be returned to a network business within a year through proactive, condition-based asset performance management, said one leading provider. Third parties are gaining influence Technology and solutions providers are increasingly being given a say over the direction of travel for network innovation. The possibility of giving third parties access to innovation funding pots has been under consideration for some time, and Dermot Nolan hinted that some news on this idea will come with the initial findings of Ofgem's innovation review, which are to be published this month. However, it's not just through access to innovation funding that third parties are gaining influence in the energy system. Ofgem is in the process of establishing its Innovation Link to make the energy system more accessible to new entrants and entrepreneurs, and the next stage of the FPSA programme will also explore ways in which non-traditional players can take a more active role in accelerating the deployment of new technologies and markets. This devolution of power and shi• away from a traditional command and control hierarchy in the networks industry – with regulated asset owners at the top of the food chain – is also apparent in the rise of service offerings. Smart power solutions company Kelvatek, for instance, is among a range of traditionally physical product-oriented companies that are racing to provide system intelligence – possibly even management – as a service. It was keen to promote its Sapient offering at LCNI, a real-time monitoring and analytics service that it already supplies to a number of DNOs to help speed up fault location and diagnosis. Some delegates at this year's conference griped that – despite ENA's claim to record registrations – footfall seemed lacklustre and that projects showed little progress on last year. Nevertheless, it remains an important weather vane for the industry's winds of change, highlighting common themes and challenges, and identifying key players in the process of energy system transformation. The role and significance of customers in energy market transition was a key theme in many presentations and debates at LCNI. Network operators were warned that their businesses could not evolve independently and without reference to customers. David Capper of the Department for Busi- ness, Energy and Industrial Strategy weighed up the relatively pedestrian options for driv- ing the transition from DNO to DSO, namely network option assessments and changes to market signals and arrangements. Goran Strbac, professor of energy systems at Imperial College London, called for a complete "paradigm shift" to put the customer squarely in charge of the evolu- tion. He highlighted that although savings of £8 billion could be achieved by moving to a smart digital system, unless customers accept solutions such as smart appliances and time-of-use tariffs, bills may rise after the investment, not fall. "This is a last century concept, that we know how to design the networks without actually knowing what consumers need," Strbac said. "We need to ask consumers to understand what it is we want to develop, what is cost effective." He also highlighted that those £8 billion of savings for consumers are losses for the industry, so the final form of the DSO must ensure the objectives of consumers and industry remain aligned. Other panel members backed the continued use of the RIIO framework for this. Flexitricity's chief strategy officer Alastair Martin agreed that without demand-side response, a DNO will be, arguably, unable to transition. "Talking to consumers is the answer," he said, especially in determin- ing how the divide between meeting the needs of the DSO and TSO will be bridged. He warned that customers' desire to have continued access to the TSO market should not be overlooked as more system control is handed to DNOs. Capper agreed that "customers will drive", but he remained steadfast in the belief that network planning will have to be left in the control of industry. He urged a col- laborative approach. Wales and West's presentation high- lighted the dangers of listening entirely to consumer's wishes. Its project in the Corn- wall peninsula (see overleaf) let consumers choose their preferred technologies, and revealed the huge impracticalities of deliver- ing "the ideal". In any case, more communi- cation with customers will be critical. Customers in charge LCNI REVIEW