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NETWORK / 38 / NOVEMBER 2017 T he long anticipated Dieter Helm report was published last week and has deliv- ered the, mostly, expected revelations. It con rmed yet another industry expert is in total agreement that the current market governance and framework is no longer t for purpose. It was a thoroughly good read! With little to disa- gree on the analysis of the state of the current market incentives, distortions and failure of the market to deliver the required transformation based on even more sticking plasters being applied to the current fragmented framework. The approach of starting again with a completely clean sheet of paper was exciting! As one read the treatise, an- ticipation built and built, when would the transition to this new world be explained? And there came the catch – it didn't explain it at all! The winners and losers were le€ to try to guess when all this might occur and how any transition of the legacy system would be implemented. The idea of changing ownership models, roles, re- sponsibilities and accountabilities without so much as an indication as to how this might happen was a major ƒ aw in the report. The fact that still the misunderstand- ing that economics will somehow trump physics was also lost on the author. Just o… ering another economic model to replace the current economic model has missed the point that the technical architecture of the power system is a limiting factor. Unfortunately, physics always trumps market structures and commercial mod- els. This fact seems to have escaped the author, even though he had a remarkably talented advisory team that knows this fact. So is the government likely to act on this report? Well they may say that much of what Dieter is espous- ing is in hand. The system operator has been actioned, National Grid have a separate function and governance board! The network operators are all working towards the change to regional (in Dieter's words) distribution system operators via the Open Networks Project. Ofgem has announced much more innovative regulation ap- proaches. It's just a case of reviewing the incentives model and the carbon price then? The problem is that these are just layering more and more regulations on an already failing foundation model. The model does not take account of the fact that the 1989 Electricity Act was constructed in an analogue world, we are now living in a digitally enabled world. The Act only conceived of the power system up to and including the meter, EV charging, heat pumps, com- munity groups – virtual and physical, local storage, PV, etc. All of this was never catered for in the thinking on the customer's side of the meter. Each tweak to the Act, EMR, etc, has only increased the complexity of incentives, micro management regulation and created a dominant set of industry players. To o… er a replacement without informing the how, the who and the when is likely to be met with a retort – this is all too di˜ cult! That is why the Institution of Engineering and Technology (IET)/Energy Systems Catapult (ESC) Future Power Systems Architecture (FPSA) programme has a step-wise approach to understand the current barri- ers, the future needs of society and the impact on the system to deliver an alternative approach that can be transitioned in a credible manner. The approach of working out what technical func- tionality will be required in the future and then understanding if the current frameworks could deliver in a timely manner was a hugely insightful ap- proach. The enlightenment was to un- derstand that just planning another A to B governance model would fail due to the fast pace of change occurring (e.g. just what Dieter has suggested). The approach has been to design a mechanism that will allow for a solu- tion to be self-initiating, transparent, inclusive, adaptable and instantiated by iterative learning. FPSA is not designing the solution but a framework to allow the solution to be discovered by the stakeholders in the market. An Enabling Frame- work (EF) that accepts it does not have all the answers but allows the solution to emerge via a self-selection process. Dieter's report will no doubt be an input into this process but his solution may look di… erent when it comes out the other side. "The model does not take account of the fact that the 1989 Electricity Act was constructed in an analogue world, we are now living in a digitally enabl ed world." HELM REPORT: SOLUTION OR JUST ANOTHER INPUT? DUNCAN BOTTING MANAGING DIRECTOR GLOBAL SMART TRANSFORMATION