Utility Week

UTILITY Week 8th September 2017

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UTILITY WEEK | 8TH - 14TH SEPTEMBER 2017 | 7 Interview T he big beasts of energy have been busy shape- shiing in a bid for survival. Last year, RWE cre- ated Innogy, Eon spat out Uniper, and Centrica continued a programme of divestments that has seen it rapidly ditching conventional generation assets in favour of energy services and connected home technologies. But what of EDF, the world's biggest producer of electricity? There has been no fanfare announcing a bold new strategy from the French energy behemoth. Only a string of financial reports that show mounting debt – now nearing €40 billion, which dwarfs its market capitalisation of €19 billion – and newspaper headlines exposing the woes of hugely expensive and troublesome nuclear projects at Flammenville and Hinkley Point C. Are such issues impeding EDF's ability to reinvent itself for a digital and decentralised energy future? Not at all, assures Beatrice Bigois, managing director for EDF Energy's customer business. Utility Week meets the neat, soly spoken French- woman at EDF Energy's "Blue Lab", an innovation hub opened a little over a year ago precisely to facilitate the company's transition from traditional energy player to customer-centric entrepreneur. We huddle in a small corner office adjoining the smart, open plan ideas centre where groups of EDF employees and funded start-ups work intensely on their "POCs" (proofs of concept) or linger in the "connect kitchen" chatting to Alexa. The lab, says Bigois, is an important part of EDF's "quite different" answer to the more overt strategic shis being carried out by its big rivals. Speaking rapidly and with fluid gestures, she describes an environment in which "nothing is remain- ing the same". Competitors are crowding into the mar- ket, with new entrants coming from different industries to challenge the established norms of energy supply. Meanwhile, solar panels have crashed in price and bat- teries "which when I joined this industry were the Holy Grail", are now becoming commercially viable. "All of these things are disrupting our industry, but more importantly, customers are changing and their expectations are shiing dramatically." In great part, Bigois attributes this shi to digital technologies that can create "moods and expectations which maybe customers cannot express". "But we can see so many examples where you give customers a new digital service and they become addicted." EDF sees a glittering opportunity here, but Bigois points out: "We can't engineer or design those new ser- vices in a traditional way. We have to experiment with customers. We have to truly listen to customers. The lab, it is responding to this." During a tour before meeting Bigois, Utility Week heard all about the lab's innovation concept. Located within the business, but operating independently, it aims to keep new ideas "close to the mothership". "Challenge" competitions are run externally and inter- nally, offering start-up incubation, student funding and employee secondments for the rapid development of proto type business models, technologies and services, while design "sprints" ensure innovations are sense- checked early and iteratively with customers. The model makes the most of employee potential, says Jean-Benoit Ritz, EDF's Blue Lab innovation direc- tor, who revealed how one call centre operator had won a prized 100-day stint in the hub to realise her vision for improved customer experience. Already, internal challenges have led to "six or seven" innovations being embedded in the mainstream organisation as business as usual, he adds. Bigois elaborates: "We need to let those ideas emerge from the business. Before, we had some innovation which was generated internally [the Blue+ Price Promise, for instance]. But, to me, it is a bit a miracle such innova- tion was able to occur… The lab, it is a bit remote from the core business. It can let ideas emerge and come to life. It allows free thinking and for working with people from all different environments – suppliers, start-ups, customers or different environments within our business." But the lab is not EDF's only answer to the changing nature of competition and commercial opportunity in the energy industry. "In relation to your parallel with Eon and RWE, we have also undertaken a transformation of the core business. We haven't publicised it so much, but we have completely restructured the core business… this is to make it more fit for purpose, to become more focused on the customer and to do the basics with excellence." What it will not do is see any progressive separation of the asset-light, service side of the business from the asset-heavy world of generation. Four years ago, a tri- partite segmentation of the business was put in place,

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