Utility Week

UTILITY Week 8th September 2017

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8 | 8TH - 14TH SEPTEMBER 2017 | UTILITY WEEK Interview aggregating all customer-facing activities in one business unit, while existing generation – of all varieties – was gathered into another and new nuclear projects into a third. "This structure works well," says Bigois. There is no further division or spin-off looming. Focusing on her world of customers, Bigois says she has enjoyed the challenge of driving efficiencies and dis- covering new opportunities since she took up her post in 2014. Coming from a number-crunching background in energy trading and risk management, it might seem a leap for Bigois, but she says: "In all my roles, there has been transformation, and at the heart of this, people. This is the common thread in my career." While there "is always more to do", Bigois is pleased with the progress that she and her colleagues have achieved to make the customers business unit work better. Opportunities for efficiency gains were "every- where" in 2014, says Bigois but gradually, through marginal gains as well as big "operational excellence" programmes, she insists operations have become slicker. "My numbers have helped me to deliver this efficiency programme. We have reduced our cost to serve since three years ago, while absorbing the increased cost of the smart metering programme." That programme has recently been blamed by several suppliers for driving up the cost of supply and neces- sitating controversial price rises. With the majority of meters still to roll out and the bulk of internal efficiencies now addressed, Bigois admits that continuing to finance the smart meter rollout will be a "challenge" for EDF and the wider industry. But she declines to label it a burden or a worry. She has more to say about the technical headaches that have disrupted the programme, particularly the struggle to transition from deployment of SMETS1 smart meters, with their limited functionality and interoper- ability issues, to fully smart SMETS2 meters, capable of communicating with the central IT system run by the Data and Communications Company (DCC). "If you look at the original schedules, we all thought that we would be rolling out only SMETS2 meters at this time. If I remember well, in 2014 SMETS2 transition was viewed as happening at the end of 2015… so we are at the very least, two years late." The impact of this is that suppliers can still only offer smart to a relatively small pool of customers "because some customers can only have a SMETS2 meter". For instance, there is no SMETS1 offer for prepayment cus- tomers, which represent 15 per cent of EDF's domestic retail business. The continued delay for SMETS2 meters seems odd when you consider that the DCC announced in Novem- ber last year that it had finally released the functionality required to support them. But Bigois frowns and shrugs, "the systems were not released" – or at least not in fully fledged and tested form. "There were some releases, but only then testing started and, as you would expect with a massive IT pro- ject, we found a number of issues". Suppliers are all now feverishly working to complete system testing in a "live" environment and to get SMETS2 on walls as quickly as possible. "We know that everyone is trying to deploy a SMETS2 and have a SMETS2 that has passed security validations, and put it on a wall to see it interact with the system," says Bigois. In part, this drive is motivated by a desire to deliver better customer experience from the technology and associated services, but the quest for SMETS2 also comes back to a question of costs. "We are really looking forward to SMETS2 coming," says Bigois. "It will make our lives much easier, and it is really much less expensive, because the asset life for SMETS2 is longer. And then some components in the meters are less expensive too." Furthermore, SMETS1 meters, which have been rolled out in much higher numbers than originally intended, carry an additional cost to suppliers because they require individual comms hubs, while the newer technology will talk to the centralised DCC comms hub. So when can we expect fully functioning SMETS2 meters to start appearing on walls? Bigois says that EDF is aiming for the end of this year, and that she believes this is common across most suppliers. But, suddenly mischievous, she adds: "There is a rumour that one SMETS2 has been installed – only one." She laughs, "I don't know where this stems from, maybe it is just a myth." Assuming the deployment of mature smart meters can move from myth to reality, Bigois is hopeful they will deliver tangible benefits to consumers. They may not be innovative in themselves, she admits, but they are "an enabler" for a new range of energy services and they will also reduce billing-related complaints – the main cause of customer dissatisfaction. Bringing an end to estimated bills, which leave room for error and make energy pricing seem opaque to the public, will have "an instantaneous" impact on energy company relationships with customers, Bigois suggests. It's a pertinent point at a time when the govern- ment has just launched a high-profile review of the costs that contribute to electricity prices in the UK. The review, to be led by Oxford professor Dieter Helm, will explore the electricity value chain from genera- tion through transmission and distribution to supply, aiming to recommend ways to cut the costs associated with each and help government deliver its promise of "the lowest energy costs in Europe" for UK households and businesses. The review has frustrated some industry leaders because of its short timescale and relatively limited terms of reference; and because it comes on the heels of a two- year investigation of the energy market by the Competi- tion and Markets Authority which many, including EDF Energy's chief executive Vincent de Rivaz, hoped would "clear the air" around the energy sector. Bigois, however, says it was "unrealistic" for indus- try to expect the CMA investigation to close the public debate over the cost of energy. Despite the Helm project being "quite a quick review", she believes "Dieter will have an impact". Declining to admit frustration with the inability of suppliers to satisfy political and public doubts about the workings of the energy market, Bigois simply says: "The government has felt the need for this review. So it means that it is needed… I think we have to be ready, being in such a sensitive sector as energy, to do these reviews as required and to constructively engage in the public debate." With Bigois hopeful that EDF Energy will make its first "very small" profit in 2017 for the first time in almost ten years, questions about what constitutes a "fair" return for energy retailers far from settled, and a price cap looming, no doubt she will have ample opportunity to do so. "There is a rumour that one SMETS2 has been installed – only one."

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