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NETWORK / 11 / OCTOBER 2017 T hese are words attributed to Dermot Nolan, Ofgem chief executive. This is a seismic shi from the days of steady-as-you-go-regulation and industry response. If we look back to the muted response by government and regulators to the IET's Power Network Joint Vision, 'Handling a Shock to the System', in December 2013, where the predic- tion of challenges that needed whole system responses was ‡ rst raised as a professional concern, the next four years have seen a steady gathering of pace – and realisation that business as usual is no longer an option. Regular readers of this column will know that transformation is my business, stimulating it and delivering it. For a regulator to reach out and recognise that transformation is required is both an opportunity and a challenge. In Nolan's own words: "The sense of transition in the energy sector is very, very considerable – perhaps greater than it's been for many years. At the risk of using a cliché, there will be challenges and op- portunities, but by and large one of the key functions of the regulator over the next few years will be to try and make sure that those innovations that take place really bene‡ t consumers. The scale of change is such, that if we get it right we will have an energy system that will be lower cost, secure, and will protect us all." But, he warns, "the scope for getting things wrong is huge". Investors will be watching closely for a transition phase to understand how legacy businesses and new- comers will co-exist and • ourish together. Utility busi- nesses are already in a state of change; TNO to TSO and DNO to DSO will be looking to shape the future in their own vision. The ENA is consulting on this now, along with internal projects like the Open Networks Project, which is focusing on the key aspects of transformation between the transmission and distribution businesses as systems operator takes on a new meaning for both. Beyond the regulated businesses, we see a lot of ac- tivity and interest from new participants to the industry, who are seeking not to get embroiled in the regulated rulesets, and operating on the customer side of the meter. Consumers and, now, producers fall into two camps – for the sake of brevity, this is broadly true – those that want to be very engaged and understand their options, and those that really have other priorities in their lives, and have little interest in being engaged with their energy usage. So, what does a transformation look like? In what sort of timeframes do transformations occur? When it comes to these types of question, we all have had recent experience of the total banning of smoking in public – and now, most private – build- ings across Europe, and the adoption of mobile over ‡ xed line telecommunications: great examples of how quickly transformative actions can be adopted across a very large user group. Transformations do not seem like transformations at the time, because they happen over the years, not instantly. Should investors or other stakeholders be worried? The answer is clearly no, although business models will need to adapt to the new reality, or those businesses that do not change will suœ er eroded market participa- tion. Much of the focus on transformation has been in the electricity sector due to its major role in being an under- lying supporter of just about all other sectors. But the transformation that is occurring is not just to do with electricity. Heat, with transport following closely behind, are sectors that are in similar transforma- tion cycles. There is no doubt now that that transformation is happening. Govern- ment realises it needs to play catch-up with reality. But how they will handle all this change remains to be seen. "Transformations do not seem like transformations at the time." THE PACE OF CHANGE: 'IT IS ONCE- IN-A- GENERATION.' DUNCAN BOTTING MANAGING DIRECTOR GLOBAL SMART TRANSFORMATION Clean energy transformed • According to BEIS data, the cost of new offshore wind projects starting to generate electricity from 2022-23 is now 50% lower than in 2015. • Eleven new energy projects worth up to £176m per year were successful in the latest competitive auction for renewable energy technologies, the Government announced in September. As well as offshore wind, successful technologies included advanced conversion technologies, and dedicated biomass with combined heat and power, which also achieved signifi cant cost savings. • The new projects are set to generate over 3GW of electricity, enough to power 3.6m homes. BEIS said they demonstrate that "the UK continues to be an attractive place to invest in clean energy". Source: BEIS