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NETWORK / 9 / APRIL 2017 R emember Hoover and Electrolux? For those with greying hair, these were brands synonymous with vacuum cleaners that had a vice like grip on the market for decades. Hoover even became a verb. Then along came Dyson. His idea that we needed a twin-cyclone system to pick up our dirt with- out a bag to collect it in was treated almost as a joke. But Hoover and Electrolux were almost obliterated from the market and the new kids on the block Dyson and Henry were the new normal. There are multiple examples of a sudden change of guard as an incumbent is usurped by a young upstart or upstarts. As we wrestle to modernise our power system, are we witnessing a tipping point in our industry? In recent weeks we have seen the reduction of incentives for renewables, a con€ rmation from National Grid control room that for the € rst time transmission system demand was lower in the a„ ernoon than overnight because of solar genera- tion on the system, and a report from UKERC that says ˆ exibility in the power network is essential if integra- tion costs for new renewables are not to spiral out of control. The Institution of Engineering and Technology and Energy Systems Catapult Future Power System Ar- chitecture Project highlights the need for an inclusive, agile and whole-system approach to the power system challenge. The BEIS/Ofgem smart energy consultation is con€ rming the market's hunger for fewer regulatory barriers and greater market opportunity. The Smart En- ergy Market conference con€ rms the community energy revolution is no longer a case of when, but what impact it is having now. The tempo of change has quickened. Stakeholders that were once onlookers in the power system are now at the centre of discussions about its future. We are at a tipping point and the fate of the future power system is sitting with the market designers BEIS and regulator Ofgem. It will be interesting to see if a continued e" ort to patch the 1989 Electricity Act is considered appropriate for the 21st century digital trans- formational world that we € nd ourselves in. Everyone agrees that the whole-systems approach along with inclusive stakeholder participation and agile and timely delivery of legislation and regulation is needed. How will this be achieved? The current process of consultation and review is too slow. The regulatory process is too silo based. As National Grid changes its strategy from balancing by generation alone to requiring demand to be involved in the balancing act, it has been pushed towards an ever more independent role of system operator. Distri- bution network operators see their role as distribution system operators providing regional balancing. Commu- nity energy groups now openly discuss the opportunity to become local system operators. Local peer-to-peer operators have brought this a step closer to reality. At every meeting, conference or workshop I attend, the € rst statement is that the customer needs to be at the centre of the system and the decisions we make. The discussion then moves immediately to the needs of the system, ˆ exibility to save the system from collapse, the failure of regulation to recognise the contribution of storage, the ROI for this project or that, the list goes on. Somehow the needs of the customer are covered by say- ing if we get the system eš ciencies right the customer will be the winner. The customer may be anything from a fuel poor person to a multimillion-pound corporate company. What does a tipping point mean for these dif- ferent customer classes ? The consideration of policy, legislation, commer- cial, technical and societal whole-system analysis is a very complex challenge. We do not have the tools or expertise to manage these, nor do we really know the requirements that these consumer groups aspire to in the future. If we cannot predict their future requirements we need to build adaptability and inclusivity into the whole-system design. To achieve this requires a new mindset for both govern- ance and deployment of regulation. Light- touch regulation rather than a detailed micro-manage- ment is needed so it can be understood and monitored for compliance. Community energy and grid-edge disruptions are not part of the regulated environment, their ability to sur- prise is evident. The key is to ensure that the regulated incumbents are part of the future and not consigned to the past by outdated, slow and cumbersome processes of governance and regulation. Lessons must be learnt. Innovation in policy and regulation is just as important as technology and commercial innovation – derogations and authority will have to be part of the ongoing itera- tive learning trials for new policy and regulation trials. Tipping points are seldom identi€ ed at the time but by identifying trends retrospectively. The trend is clear, the outcome is not. There are always winners and losers when tipping points are reached – who will be the win- ners and who will be the losers? Let's hope the winner is the customer… only time will tell. "Who will be the winners and who will be the losers?" A R E W E AT T H E T I P P I N G P O I N T ? DUNCAN BOTTING MANAGING DIRECTOR GLOBAL SMART TRANSFORMATION