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UTILITY WEEK | 2ND - 8TH JUNE 2017 | 9 Event CASE STUDY: HYDEPLOY As decarbonisation forges ahead and oppor- tunities to green the power sector dimin- ish, the gas grid and the way we heat our homes is attracting scrutiny. Gas distribution networks are faced with a do or die challenge – get green or get out. Facing up to this challenge of their flex- ibility, networks are now pouring resources into testing decarbonisation scenarios – a favoured route among some is to replace fossil-based natural gas with hydrogen. Some propose a 100 per cent swap, but other projects explore the greening impact of using a hydrogen-methane blend. In the Network Theatre at Utility Week Live, delegates soaked in the ambitions that North- ern Gas Networks and Cadent have for their HyDeploy innovation scheme, which aims to demonstrate that a hydrogen-methane blend of gas can be safely injected into the gas dis- tribution networks, significantly lowering the gas grid's carbon emissions contributions HyDeploy in brief: • Project partners propose to use a blend of gas with up to 20 per cent hydrogen. • This gas blend could deliver 29TWh of low carbon heat per annum across the UK. • It could cut carbon emissions by 120 mil- lion tonnes by 2050. • It could deliver £8 billion-worth of savings compared with other low carbon ways of providing this heat. • Trial network is based at Keele University – it is representative of a small town: o 600-acre site; o 101 residential buildings, 8 multi- residential buildings; o 7 recreational facilities; o 17 offices and laboratories. • Phase one of HyDeploy began in April. It includes: a customer engagement plan; testing 18 different methane-hydrogen blends; applying for an HSE gas safety management plan exemption, which will allow them to go above the current 0.1 per cent hydrogen limit. • Phase two of HyDeploy begins in 2018, comprising the installation of essential infrastructure and commissioning of the pre-injection process. • Phase three will be a full year trial – due to start in 2019. Panel discussion No one size fits all Senior executives set out to define the utility of the future at Utility Week Live – diversity will be the common feature, they concluded. W hat does good look like for the utility of the future? That was the question posed to four of Utility Week Live's transforma- tive leaders in the show's closing session. The lively debate between Piers Clarke of Isle Utilities, John Reynolds of Castle Water, Simon Har- rison of Mott McDonald and the IET, and Cheryl Latham of Brighter World Energy may not have come to any conclusive answers – but they posed some thought-provoking challenges, and had some fun along the way. First up, customers. This group of transformative leaders agreed that the end consumer should be the one call- ing the shots, with Harrison making reference to a paternalistic mindset still existent in some traditional utili- ties, whereby the business thinks it knows what is best for its customers. Our panellists challenged this mindset, agreeing that what custom- ers want and need may look very dif- ferent to what utilities think they want and need. This creates opportunities for new entrants to utilities markets – as John Reynolds, who runs a new water retailer for business customers, has realised. Declaring himself a "barbarian at the gates" of traditional utilities, he insisted that today's payment and billing options make it look as though "the sector is run by a bunch of Lud- dites", and even raised the tantalising possibility of a multi-utility bill with a single point of payment. Customers may go even further, our panel suggested, and take themselves off the grid altogether. Clarke raised the alarming prospect that within 100 years, a major public health incident, or series of incidents, could have destroyed consumer trust in water utilities to the point where customers process their own water, or buy it bot- tled from a trusted retailer. This raises the same risk for water companies as has been acknowledged by energy – becoming increasingly irrelevant as customers find their own solutions that bypass traditional networks. Different business models create different risk profiles, and our panel- lists acknowledged that traditional utility investors may baulk at the move to riskier businesses such as retail and grid-edge services. But they insisted that this shouldn't hold utilities back from transformation. Harrison suggested that regulators may be able to find a way round the problem by putting the risk of new business models on to the customers in the first instance, in recognition of the upside for end users. Clarke and Reynolds believed that different investors would be attracted to differ- ent parts of the disaggregated value chain, while Latham represents a new type of business model, with "angel" high net worth investors backing her business for social as well as financial objectives. Finally, the panellists were asked to consider whether regulation should encourage innovation, or get out of its way. Their answers were emphatic – our panel were firmly of the belief that the customers and the market will find their own solutions. Rather than identify the utility of the future, the debate identified that there is no such thing. The main feature of future utilities will be their diversity. Businesses may split into asset-heavy, traditional wholesalers and more agile, technology-driven customer-facing retailers. Or they may split into many more component parts. What is clear is that utilities of the future will look very different to today, being customer driven, disag- gregated and truly diverse. Our panellists promised to come back in 30 years' time to see whether their predictions come true. We'll see you there!