UK smart grid needs innovative companies
Dr Edward Colby, chief technology officer at Sentec, explains why encouraging home grown innovation will be critical in the delivery of a successful smart grid
Nesta’s recent Innovation Index revealed that investment in new products and ideas in the UK has fallen by £24bn since 2008, and faces a “deep-rooted crisis”.
This lack of innovation reinforces SmartGrid GB’s argument that the UK must move quickly to secure its leading position on smart grid technology or risk losing out on a £5bn export market and 10,000 skilled jobs. It warned that while the UK is currently well-placed to lead the development of smart grid technologies, a lack of ambition could see it lose its position to overseas competitors, such as the US, China, and South Korea.
In order to make the most of our new methods of energy generation, and to allow for the extra capacity that will be required for future demand, for example, electrification of heating and vehicles, investment in the technologies that enable a smart grid, such as sensing and metering, is a necessary requirement. But, given this incentive for new technical solutions and the abundance of small companies coming up with pioneering products in the UK, why is innovation in the power network so hard?
Ultimately there is a disconnect because small companies work very differently from the way large ones, such as DNOs and utilities, do.
Long purchasing cycles and the fact that it can take months to test a new product can have devastating repercussions for smaller players. It can also be difficult for small companies to access larger enterprises with increased layers of bureaucracy.
The energy industry is conservative by nature. Unless technology is proven, DNOs and utilities are reluctant to invest in it, and new technology is hard to prove, especially for small companies with a limited budget. Utilities are not focused on innovation; they are far more concerned with asset management. They see innovation as a way to firefight problems as they arise, rather than as a way to improve customer experience and increase efficiency.
However even when these problems arise, how can small companies find out about them and respond?
There are some measures in place to encourage innovation, for example the Innovation Funding Incentive (IFI) scheme and the Low Carbon Network Fund (LCNF), which is designed to help address the mis-match between timescales. The LCNF allows DNOs to recover costs of investing in innovation as they have to deliver customer benefit, for example reducing outages.
Such schemes are undoubtedly positive for the industry, but we need to look at what we can learn from them and how we can improve even further. The UK must provide better access to funding, support and entry points to these small companies who have valuable and commercially viable innovations.
To realise a truly smart grid, DNOs and other large organisations in the sector need to ensure that they are tapping into innovation and expertise by employing a more collaborative approach and working with specialist partners. One example of this could be testing new products jointly to speed up the process and make it more cost efficient.
We need a forum to bring together those who own the problem that needs to be solved and innovators from the smaller companies, who may be able to come up with a solution. This collaboration should result in a product or offering that meets the market needs and is targeted at genuine pain points.
A useful comparison can be made with the software industry, where it is common for developers to get together for conferences and coding events such as Google’s ‘Summer of Code’. It is this type of collaboration that enables innovation to thrive. The energy and smart grid sector needs a similar forum where ideas can be discussed and innovators can feel secure that their IP will be respected.
Sentec has partnered with Selex Galileo to launch a low voltage monitoring system, called GridKey. This partnership is a great example of how a large company is able to take advantage of the expertise of a smaller, specialist partner, while the backing of a larger organisation enables the smaller company to take a product through trials and provide a convincing case for capability to scale up to and meet high volume production.
The project is already delivering results with production systems supplied to the first customer.
The UK has the home grown engineering skills to deliver a truly smart grid, but to avoid being left behind by countries like the US and China it’s crucial that we create an environment where innovation can thrive.