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UTILITY BUSINESS AUTUMN 2011 THE QUARTERLY PUBLICATION FROM SBGI UTILITY NETWORKS

In this issue: A New Energy Era Energy Efficiency in the Home Smart Metering Achieving an Effective Smart Meter Roll-out Advances in BroadBand Developments in UK Policy Leading Voice Utility Business talks to Nigel Mason, Co-operative Energy

The Consumer Issue:

A NEW ENERGY ERA


SBGI Utility Business Autumn 2011

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Marketing & Communications Manager: Caroline Taylor caroline@sbgi.org.uk 01926 513762 Services Manager: Vanessa Webster vanessa@sbgi.org.uk 01926 513763 Services Manager: Gary Cottrell gary@sbgi.org.uk

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THE QUARTERLY PUBLICATION FROM SBGI UTILITY NETWORKS

Welcome

WELCOME FROM YOUR EDITOR // CONTENTS

UB

UTILITY BUSINESS from your editor Welcome to the autumn edition of Utility Business. Against the backdrop of some key Government developments in energy policy – the Electricity Market Review, Renewable Heat Incentive and Energy Roadmaps – Utility Business has taken a look further down the networks this issue. Our main feature ‘A New Energy Era’ looks at the changing environment of consumer markets, reviewing products that are improving energy efficiency in the home. We also consider what effective smart metering roll-out might look like, including some interesting discussion with individuals who have already adopted smart meters in their homes. Our Leading Voice interview comes from brand new energy supplier Co-operative Energy. Nigel Mason, Business Development Manager, shares the challenges of entering this highly competitive market and outlines why their product is different.

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Continuing the consumer theme, Viewpoint this issue comes from Tony Smith, CEO of the Consumer Council for Water. Customer satisfaction, he says is crucial to the long term sustainability of the water industry, and Dr Michael Pollitt’s column looks at what the future is for energy consumers.

Chairmen Utility Networks Board: Steve Murray (National Grid Distribution)

I really hope you enjoy this issue. If you have any news to share regarding developments in your own company for the next issue, please do drop me a line.

Dist/Trans Equipment Group: Richard Stone (AVK UK Ltd) Network Engineering Group: Ian Foster (Fulcrum) Metering Services Group: Vic Tuffen (Tuffentech Ltd) Metering Technology Group: Jeff Cooper (Elster Metering) Gas Storage Operators Group: Roddy Monroe (Centrica Storage) Data & Communications Management Group: Mike Buss (Sensus Conservation Solutions)

Caroline Taylor, Editor caroline@sbgi.org.uk

In this issue… 4

Features A New Energy Era

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Energy Efficiency in the Home

Smart Metering

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Achieving an Effective Smart Meter Roll-out

Smart Metering

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The Consumer Experience

=================================== Editor/Enquries Caroline Taylor caroline@sbgi.org.uk 01926 513762 ISSN Number 1359-9836 SBGI Utility Networks Camden House, Warwick Road, Kenilworth, Warwickshire CV8 1TH Tel: 01926 513765 Fax: 01926 857474 Visit the blog at www.utility-business.org

Advances in Broadband

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10

Developments in UK Policy

Leading Voice

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Utility Business talks to Nigel Mason

Regulars Utility Networks News Regulatory Update Industry News News Extra Member Directory Forthcoming Events Viewpoint

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SBGI Utility Business Autumn 2011

Utility Networks News

The Role of Data in Effective Ass The guest speakers… 1

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SBGI Utility Networks ran a successful Asset Management sem attended by over 100 senior representatives from the utilities in Now in its third year, the event shared lessons in effective asset management through short presentations and case studies, from key industry speakers. The theme this year, ‘The Role of Data in Effective Asset Management’, reflected the drive from regulators, asset managers and customers for smarter, data rich, asset management processes. The role of data has never been so important and the seminar explored how businesses can deliver smarter asset management. The seminar was supported by a supply chain exhibition which provided excellent networking. Exhibitors included QC Data, Esri UK, Balfour Beatty, Control Point, QuickVend and Enzen Global. The first of the morning sessions chaired by Jeremy Bending from National Grid, covered Policy and Regulatory Drivers in Asset Management. In regulation, Ofgem outlined that the new RIIO framework would require longer term planning and a greater focus on asset health, criticality and risk from the gas and electricity networks. This would encourage continued and significant improvements in asset management.

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Asset integrity management and condition monitoring is really important in the Gas and Pipelines sector, said the Health & Safety Executive, and they continue to develop policy away from reactive, issue-based risk management to ‘holistic’ risk management.

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The challenge that ‘Smart’ brings poses unprecedented demands to our energy networks, particularly in our cities and urban areas, shared UK Power Networks. Smart development also brings new opportunities to exploit such as improved, real time asset and network management and responsive demand capability.

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With economic regulators demanding ever greater transparency on investment decision-making, the importance of robust data has never been so important, said SEAMs, the asset investment company. Utilities have traditionally used a bottomup approach to identify the investments needed to maintain service and deliver improvements. SEAMS advocate a top-down approach which drives challenge into the investment plan.

Session 2 How Healthy is your Asset?, proved a really informative session. Four key industry players shared individual experiences in gas, electricity and water networks. National Grid has undergone an extensive process to migrate its gas network asset and spatial information into the Gas Distribution Front Office (GDFO) programme, to replace the multiple systems previously in use. The programme brings together asset management, work scheduling, mobile and map applications for the company’s gas emergency, repair and maintenance and construction team crews. At the heart of the new system is SAP and three supplementary applications – ClickSoftware, ESRI and Syclo – which provide the ability for scheduling, dispatch, GIS and mobile. The project was a serious investment and required extensive audit and reconciliation reporting but should give huge efficiency gains. Electricity North West outlined their use of the Service Risk Model and reviewed how DPCR5 could influence their processes concluding that decarbonisation and clean electrification would change their focus but that asset management techniques will continue to grow in importance. Wales and West Utilities employ both health index and risk modelling in their asset management processes and shared with delegates some of their specific challenges. The adoption of private sewers is a major asset management challenge, requiring water companies throughout the UK to take responsibility for new assets that they know very little about. Delegates heard about United Utilities approach to asset management and in particular the role of appropriate governance. The final Session of the day concentrated on Solutions and Best Practice and was chaired by Mel Karam, Southern Water. The task for capturing the data relating to asset records in the field has traditionally not been well supported, leading to poor or incorrect information being submitted. North West Gas Alliance outlined the work they are doing to combat this weakness and improve their data capture through a new ‘Learning Standard’ which is accredited to E&U Skills.

> Our speakers 1. Jeremy Bending (National Grid) 2. Chris Watts (Ofgem) 3. Jim Stancliffe (Health & Safety Executive) 4. Dave Openshaw (UK Power Networks) 5. Mel Oakes (SEAMS) 6. Paul Sankey (SEAMS) 7. Katie Brunton (National Grid) 8. Mike Kay (Electricity North West) 9. Chris Clarke (Wales & West Utilities) 10. Tim Fynn (United Utilities Water) 11. Mel Karam (Southern Water) 12. Steve Murray (North West Gas Alliance) 13. Peter Mingins (Esri UK) 14. Ian Wainwright (QC Data) 15. Damien Wall (GE Digital Energy) 16. Rosemary McAll (GL Noble Denton)

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set Management

minar in July in Loughborough, ndustry. Geographic relationships are crucial to the operation and management of utility firm assets yet often Spatial Data and GIS analytics are not fully exploited. Once location information is integrated with other business information considerable business value can be realised, explained Esri UK. As an experienced data service solutions provider, QC Data knows just how crucial data is as a corporate asset. They shared with delegates key factors for improving data quality to meet today’s technical and regulatory challenges and considered next steps in data-updating and processes to prepare for the demands of systems of the future. GE Digital Energy is a major solutions provider and thought leader for the Smart Grid. They are right at the forefront of inventing, improving and integrating communications, automation, and power delivery technologies to give century-old infrastructure new capabilities and performance and shared some of their vision for integrated asset management and control. Rounding off the afternoon’s excellent content was GL Noble Denton. They gave details of MRP (Mains Replacement Prioritisation), a decision support tool for operators of gas distribution mains helping reduce operating costs and enhance safety and reliability. It comprises a risk based methodology to prioritise which mains to replace. Used as part of a distribution integrity management plan, MRP can help a gas distribution network operator reduce their system risk and optimise their maintenance budget. This can be achieved by targeting repairs on mains which may not be scheduled for replacement or by accelerating the replacement of mains which may require multiple repairs over a defined time period, the cost of which exceeds the cost of replacement. SBGI would like to extend their thanks to all the day’s speakers for making it an extremely informative and enlightening event, and to the event sponsors QC Data, Datamonitor, Esri UK, Balfour Beatty. Without their support events of this calibre would just not be possible.

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SBGI Utility Business Autumn 2011

Regulatory Update Although the latest Energy Bill didn’t make it onto the statute books ahead of Parliament’s summer recess there were a number of related legislative announcements affecting the sector. Most important was the Electricity Reform White Paper that sets out the Government’s commitment to deliver the so-called ‘energy trilemma’ of a secure, low-carbon and affordable energy future. £110 bn investment generation and transmission by 2020 and almost complete decarbonisation of power sector emissions by 2030 are the primary challenges. Key policy instruments announced in the paper included: • Long-term contracts in the form of Feed-in Tariffs with Contracts for Difference (FiT CfD), complemented by a Carbon Floor Price and setting of an emissions Performance Standard for new fossil-fuelled plant, and

Alongside EMR the Government published a UK renewable energy roadmap that identifies 8 technologies that either have the most potential to help the UK meet its 2020 targets in a cost-effective sustainable way or offer great potential for future decades. The energy sector was not alone in reviewing the role of its economic regulator. David Gray’s review of Ofwat recommended no major changes but a continued reduction in the regulatory burden placed on companies and that the voice of water consumers be retained through CCwater. UK Ministers will respond to the review’s recommendations in a Water White Paper later this year.

• A new Capacity Mechanism (details by year-end) to address the forecast late-decade security of supply concerns The White Paper recognised also the need for new Institutional Framework to deliver on these policies and provide investor confidence. Linked to the EMR was a detailed review of the role of Ofgem; undertaking to communicate its policy goals more clearly, Government will also seek legislative provision to hold Ofgem to account in justifying its independent regulatory decisions. On the planning front, developers of energy projects in England and Wales will now have greater certainty on how applications will be considered with the designation by Parliament of the National Policy Statements for major infrastructure. These will be used by the IPCs successor, subject to passage of the Localism Bill.

The Dr Michael Pollitt Column

WHAT FUTURE FOR ENERGY CONSUMERS? Prior to privatisation in the UK, electricity and gas industries were primarily driven by producer interests and significantly affected by government industrial policy towards domestic power engineering and coal production. Privatisation laid bare the true cost of two failed nuclear power building programmes, as well as facilitated the ending of expensive subsidies to dirty UK coal production and the pervasive over-staffing within the utility companies themselves. As independent economic regulation (which focussed on facilitating competition and RPI-X regulation of network companies) and activist competition policy (which brought about the reduction in size of British Gas and incumbent electricity generators) took effect, competition increased and prices fell sharply. By 2003 combined domestic electricity and gas bills were around 25% lower in real terms than in 1990.

Co-incidentally consumer choice increased and quality of service improved.

auctions). Ofgem is also important in ensuring price transparency and monitoring market abuse.

Since 2003, commodity prices for gas and coal have risen and government policy (both domestic and EU) have sharply added to the price of energy. However the history of energy privatisation era contains important lessons about how to promote consumer interests.

Third, the Competition Commission should be invoked to resist pressure to allow either the upstream or retail parts of energy supply to consolidate in the face of natural desire of the industry to re-integrate, especially under the guise of needing to achieve scale to finance large discrete investments (which could probably be more cost effectively financed by means other than on a utility’s balance sheet).

First, policies which target particular production technologies for electricity are extremely expensive and should, in general, be avoided. Economy wide carbon pricing is the only sensible basis for promoting the consumer interest in low prices, at the same time as meeting decarbonisation targets and observing the polluter pays principle. Second, Ofgem has a key role in regulating monopoly network prices via effective benchmarking of network revenue requirements and promotion of the competitive provision of network services (e.g. via offshore transmission

Finally, while there is not a lot the UK can do about the global drivers of commodity prices, welcoming new investment in electricity and gas interconnectors and embracing the emerging global LNG market allows the UK to access the global market at the lowest possible cost, and exposes domestic resources to healthy competition.

Michael Pollitt is a University Reader in Business Economics at the Judge Business School, University of Cambridge and Director of Studies in Economics and Management at Sidney Sussex College, Cambridge. Between 2007 and 2011 Michael was external Economic Advisor to Ofgem, advising on Project Discovery, the Fifth Distribution Price Review, the LENS project, RPI-X@20 and the smart meter rollout, among other projects. He is currently a member of Ofwat’s Future Challenges expert panel and an advisor to the Consumers’ Association. He is also an Assistant Director of the ESRC Electricity Policy Research Group.

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Industry News

REGULATORY UPDATE // THE DR MICHAEL POLLITT COLUMN //INDUSTRY INDUSTRY NEWS NEWS

Nuclear Policy The National Policy Statements for Energy Infrastructure have been approved, which formally designates eight UK sites suitable for new nuclear reactors: Bradwell, Essex; Hartlepool; Heysham, Lancashire; Hinkley Point, Somerset; Oldbury, South Gloucestershire; Sellafield, Cumbria; Sizewell, Suffolk; and Wylfa, Anglesey. The process took into account the nuclear safety regulators independent report into the Fukushima accident, concluding that there was no need to reconsider UK siting strategy. The first new nuclear plant could come online in 2018. Switzerland will phase out nuclear power by 2034, citing concerns about the Fukushima accident, which will see the closure of five nuclear plants. To make up the shortfall, Switzerland will rely more on hydroelectric power. Germany’s coalition government will ramp up its ongoing policy to phase out the country’s nuclear power plants and aims to do so by 2022. Germany’s energy transition will concentrate on energy efficiency (in buildings and transport) and greater use of renewables.

Which? Challenges Energy Companies on Smart Meter Sales Which? has launched a challenge to energy companies, who will soon be installing smart meters. They discovered job adverts for smart meter installers where commission was part of the payment package and are concerned that energy companies will use the smart meter roll out as an excuse to send in salespeople disguised as installers. Which? has challenged all energy companies to sign up to its ‘No selling, just installing’ promise. To date, Co-operative Energy, Ecotricity, First Utility, Good Energy, Ovo, Spark Energy and Utility Warehouse have done so.

Boost for Small Energy Suppliers Independent energy suppliers have welcomed a decision by Government that energy firms with 250,000 customers or less will not have to take part in two Government programmes - the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP). This follows a consultation which originally proposed a threshold of 100,000 customers. It was lobbied that this would place a disproportionate burden on small suppliers, acting as a barrier to market entry and reducing incentives to grow. Smaller suppliers to benefit include Ecotricity, Co-op Energy, First Utility, Good Energy, Ovo Energy, and Utilita.

Regulations Implemented for Transfer of Private Sewers The regulations for the adoption of private sewers were formalised by Parliament on 1 July. The transfer will see some 200,000km of private sewers become the responsibility of water companies from October 1, with many firms’ networks set to double overnight. For example, Thames Water estimates the transfer will result in an additional 40,000km sewers being added to its network, an increase of 60 per cent.

Energy Demand Research Project: Final Analysis The overall findings and conclusions from Ofgem’s Energy Demand Research Project (EDRP) have been published. The project involved over 60,000 households, including 18,000 with smart meters and was designed to test consumers’ responses to different forms of information about their energy use. Four energy suppliers conducted the trials and the analysis identified the interventions that proved most effective in reducing consumption (an average reduction of 3%). The findings will help inform the forthcoming smart meter roll-out.

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SBGI Utility Business Autumn 2011

Industry News HSE Review of Iron Mains Replacement Ofgem put back the deadline for GDNs to submit their business plans, as part of the overall price control review process, by four months to the end of November 2011 from July due to a review of the mains replacement programme. HSE has now published its independent review, carried out by Cambridge Economic Policy Associates (CEPA), which assesses the remaining 20 years of the original programme. It is thought that for around 80% of the pipe population it will largely be business as usual. For a further 18% of the pipe population an additional cost/benefit analysis will be required; this forms part of the Networks’ business plans. For 2% of the pipe population representing the very largest pipes, a moratorium will be put in place on replacement, pending a review of risk assessment methods and mitigation options for this class of pipes. SBGI is currently seeking views from members on any supply chain impacts so that we can present the supply chain view to the Network Companies and Ofgem.

Energy Price Rises put a Fifth of Households in Fuel Poverty Figures from the latest Annual Report on Fuel Poverty Statistics showed that 5.5 million households were in fuel poverty in 2009, the latest year for which statistics are available, compared to 4.5 million in 2008. Increases in the cost of gas and electricity have been cited by the Government as the prime reason. Consumer Focus believes the number of households in fuel poverty will be as high as 6.4 million – 12 million people – after this year’s price increases.

Renewable Heat Incentive The Renewable Heat Premium Payment (RHPP), a forerunner to the Government’s domestic Renewable Heat Incentive (RHI), has launched and will be managed by the Energy Saving Trust. The scheme will support up to 25,000 installations, including solar thermal, heat pumps and biomass boilers. Under the £15 million grant scheme, homeowners will be able to apply on a firstcome-first-served basis for vouchers valued at between £300 and £1250 to put towards the cost of installing renewable heating systems. However, the Government’s RHI scheme aimed at businesses has been delayed until September. The £860 million subsidy scheme was due to open at the end of July.

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‘Major Risks’ to £11.3bn Smart Meter Rollout A report by the National Audit Office says the national rollout of smart meters, set to cost £11.3 billion, faces “major risks” on value for money. The report questioned how much energy usage will change, and how clearly the government had set a benefits realisation plan or a strategy for engaging consumers. DECC “must address” a number of risks to the programme the NAO has said, expressing concern that the department has not yet developed a benefits realisation plan or consumer engagement strategy. There is also “very little contingency time” to address risks that design approvals, procurement and testing “take longer than planned”, the NAO warned. It also highlighted questions over whether the system was “flexible enough to minimise the risk of future obsolescence”, as well as a need for much clearer plans for system security.

IEA Sees Golden Age for Gas The International Energy Agency has released a special report on gas which signals a strong future. Demand is strong and the North American shale gas boom and expansion of LNG trade have made ample supplies available in the near-term and bolstered future gas supply prospects. With mounting concerns over energy security and global climate change, and renewed debate surrounding the future role of nuclear power, these developments could lead to a golden age of natural gas, the IEA say. This report is part of the World Energy Outlook 2011.


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INDUSTRY INDUSTRY NEWS NEWS

British Gas Launches its Own ‘Green Deal’ for Homes British Gas has launched its own ‘green deal’ for homes ahead of the Government’s flagship energy efficiency scheme. The Home Energy Plan offers householders a fixed-term loan agreement at an APR of 6.9% to cover the costs of energy efficiency measures like cavity wall and loft insulation, voltage optimisation systems, new boilers, heat pumps and solar panels. Repayments can be made over five, ten or fifteen years, with the option for a finance plan that allows monthly repayments to be set at less than the amount saved on energy bills as a result of the installed measures. Under the scheme, which British Gas says is the first of its kind in the country, householders will receive a free survey of their home with room-by-room suggestions and the potential annual savings.

New Feed-in Tariff Levels Announced New generation tariffs for large scale solar and anaerobic digestion have been confirmed. The change will prioritise domestic and other small solar power installations of up to 50kW. Feed-in tariffs for bigger projects will be cut. Installations between 50 kW and 150kW will get 19p per kilowatthour, down from 32.9p, and bigger installations face a 72per cent cut in subsidies – a reduction from 30.7p to 8.5p a kW hour. Government has defended the cuts as necessary to prevent large schemes taking up all of the funds intended for households and small businesses.

Smart Metering Implementation Consultations Published

Chris Huhne, Secretary of State for Energy and Climate Change, with smart meter App on phone

DECC and Ofgem published their response to the Smart Metering Prospectus Consultation earlier this year, which set out the planned approach to the design of the new obligations on energy suppliers to install smart metering equipment, and commissioned industry experts (the Smart Metering Design Group – SMDG) to develop draft specifications. These Draft Technical Specifications for Smart Metering have now been published and released for industry consultation, the outcome of which will secure the design and technical specifications of smart gas and electricity meters ahead of the national roll-out, due to start in 2014. DECC also launched several other important Smart Metering consultations in August – the first in what is likely to be a series of many consultations leading up to the roll-out. One reviews draft licence conditions and technical specifications for the rollout of gas and electricity smart metering equipment. Another sets out to gain stakeholder views’ on the requirements on electricity and gas suppliers to develop and adhere to codes of practice governing the installation of smart meters. Finally, DECC issued a call for evidence on data access and privacy to seek views and evidence on the privacy framework for smart metering. All of these consultations are available for review on the DECC website under their Smart Metering pages. 9


SBGI Utility Business Autumn 2011

UTILITY BUSINESS

FEATURE

A NEW ENERGY ERA

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A NEW ENERGY ERA // ENERGY EFFICIENCY IN THE HOME

Energy Efficiency in the Home The single biggest use of fossil fuels in the UK is to create heat for buildings. With some 50% of the UK’s carbon burden coming from this energy use (27% of this domestic heating, lighting and appliances) it is crucial to achieve greater energy efficiency in space and water heating, as well as develop cleaner forms of energy to work alongside fossil fuels.

With concerns about climate change and escalating energy prices there is much the average household can do to conserve energy and keep costs in check. The Heating & Hotwater Industry Council provide some useful considerations here, along with a review of some of the alternatives.

energy costs households face each month, yet many people are unaware the average boiler is only ‘E’ rated.

Energy Saving Measures

Biomass is the energy stored in plants. According to Defra, the crucial difference between biomass and fossil fuels is one of time-scale. Biomass takes carbon out of the atmosphere while it is growing and returns it as it is burned, hence creating a carbon balance. There are five basic materials for Biomass fuel - virgin wood, energy crops, agricultural residues, food waste and industrial waste and co-products. It has many possibilities as a renewable energy source though does have some downsides with regard to convenience domestic biomass boiler systems tend to be larger and costlier than their fossil fuel equivalents (a typical automatically fed pellet boiler for an average home costs around £11,500*) and the fuel requires a lot of space to be stored – not easy in modern, compact housing. Additionally, the Biomass market is still inexperienced compared to the fossil fuel market.

Draft proofing remains one of the easiest and most cost effective ways of limiting heat loss. The next most important thing to focus on is insulation – on water cylinders and hot water pipes and loft insulation – up to 25% of heat loss occurs through the roof and many houses still have the bare minimum and some none at all. Cavity wall insulation is now a standard feature on most modern homes and improvements in material and reduced cost mean it is also suitable for use on existing properties. Thermostatic and time controls for heating should be fitted to all systems. As a minimum, temperature and time controls should be applied to both the heating and any stored hot water system and room temperatures should be controlled through thermostatic radiator valves. Some modern heating systems have weather compensation controls which regulate space heating in-line with outside weather conditions for maximum efficiency. The best high efficiency condensing boilers convert more than 90 per cent of heat, compared to just 55 per cent for some old boilers and despite a new boiler being costly (average £2500) the high-efficiency boiler will actually cut heating bills by up to 40 per cent and cut up to 2.7 tonnes of carbon off a household’s carbon footprint. Heating and hot water bills are the biggest

Alternative sources of energy

Heat Pumps Air and Ground-source heat pumps use a refrigeration cycle to move heat between the outdoors and indoors. Ground-source heat pumps (GSHP) use a circuit of underground piping outside the house to extract heat from the ground to a heat pump unit inside the house. This is usually used to heat radiators or underfloor heating systems and hot water. Beneath the surface, the ground stays at a fairly constant temperature, so a ground source heat pump can be used throughout the year - even in the middle of winter.

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SBGI Utility Business Autumn 2011

Air source heat pumps absorb heat from the outside air and are usually used in conjunction with radiators and underfloor heating systems, or warm air convectors and will also heat hot water in homes. An air source heat pump can extract heat from the air even when the outside temperature is as low as minus 15° C. Unlike gas or oil boilers, heat pumps deliver heat at lower temperatures over much longer periods. This means that during the winter they may need to be left on 24/7 to heat a home efficiently. It also means that radiators should never feel as hot to the touch as they would do when using a gas or oil boiler. All heat pumps have some impact on the environment as they need electricity to run, but the heat they extract is constantly being renewed naturally. Costs for installing a typical system suitable for a detached home range from around £6,000 to £17,000*. Running costs vary depending on a number of factors - including the size of house and how well insulated it is.

Solar Power There is increasing popularity in solar thermal energy. Most people understand the basics of how solar energy works and although it is still not cheap to convert a home to solar power, it is much more in reach than it ever has been. Many properties are suitable for solar thermal panels. They work best when facing south. If there is not enough room to have the panel on the roof it is possible to mount them on a frame on the side of a building, or on a garage. Solar water heating is the generation of hot water from sunlight. Solar water heating systems use solar panels, called collectors, fitted to the roof. These collect heat from the sun and use it to warm water which is stored in a hot water cylinder. A conventional boiler or immersion heater can be used to make the water hotter, or to provide hot water when solar energy is unavailable. There are two types of solar water heating panels - evacuated tubes and flat plate collectors. Flat plate collectors can be fixed on the roof tiles or integrated into the roof. They do not rely on direct sunlight alone but they will produce more hot water when it is sunny. A typical solar water heating system will cost around £4,800*. Solar electricity systems capture the sun’s energy using photovoltaic (PV) cells and converts it into electricity to run household appliances and lighting. PV cells are panels attached to the roof or walls. Each cell is made from one or two layers of semiconducting material, usually silicon. When light shines on the cell it creates an electric field across the layers. The stronger the sunshine, the more electricity is produced. PV cells come in a variety of shapes and colours, from grey “solar tiles” that look like roof tiles to panels and transparent cells that you can use on conservatories and glass. PV cells don’t need direct sunlight to work - they still generate some electricity on a cloudy day. The average solar electricity system costs around £12,000*.

Renewable Heat Premium Payment The Renewable Heat Premium Payment (RHPP) launched by Government on 1 August will provide a ‘stopgap’ before the Renewable Heat Incentive (RHI) and the Green Deal are introduced in 2012. The incentive will provide £15 million of funding to support around 25,000 installations of renewable heating systems like heat pumps and biomass boilers. Each household can receive up to £1,250 to help with installation costs. The RHPP is available until 31 March 2012 and operates on a first come first served basis. DECC has said it will review payments when £10million has been administered. The programme is managed by the Energy Saving Trust and early indications are that there is strong interest from households wishing to take advantage of the grants. They recommend early applications from interested parties. To apply for the scheme see the Energy Saving Trust website. Thanks to Jodie Wiltshire, HHIC, for providing this article. HHIC is a member organisation committed to effectively driving, supporting and promoting the sustained growth of the UK domestic heating and hot water industry. For more information see their website http://www.centralheating.co.uk/ *Source: Energy Saving Trust

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The best high efficiency condensing boilers convert more than 90 per cent of heat, compared to just 55 per cent for some old boilers and despite a new boiler being costly (average £2500) the highefficiency boiler will actually cut heating bills by up to 40 per cent and cut up to 2.7 tonnes of carbon off a household’s carbon footprint.


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FEATURE

A NEW ENERGY ERA // ENERGY EFFICIENCY IN THE HOME // ACHIEVING AN EFFECTIVE SMART METER ROLL-OUT

UTILITY BUSINESS

Achieving an Effective Smart Metering Roll-out A requirement for a successful roll-out of smart meters is to ensure consumers are engaged with the new technology being installed in their homes. After all, simply installing smart meters and an in-home display will not change consumer behaviour on its own. Benefits from consumer impact assessments need to be taken into consideration to change consumer behaviour. Engaging consumers at a distance The Government’s response to the smart metering prospectus issued in March this year highlights the need for a co-ordinated, nationwide consumer engagement campaign, one similar to the highly successful ‘Digital TV Switch-Over’ campaign run over the last few years. To achieve this level of success, it is essential that all stakeholders work together to deliver consistent, reassuring messages, highlighting the benefits that smart meters can deliver for the end user. Will this be an easy task? It certainly won’t and the non-geographic nature of a supplier driven roll-out makes it more difficult, but it is within the capabilities of the highly successful and energetic energy industry that we see in GB. We already see innovative advertising and marketing campaigns

from energy suppliers, embracing everything from promoting energy efficiency, to supporting the Olympic Games in 2012. So the industry, DECC and consumer representatives, all pulling together should make this element of the smart meter roll-out less of a challenge, and crucially a success.

Engaging consumers face-to-face Another element of engagement is the face-to-face interaction with consumers during the installation visit. The smart meter roll-out will be the biggest ever home visit programme to hit GB, so it is vital that consumers get the best experience possible when their smart meters are being installed. The Energy Retail Association is busy working with a wide

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SBGI Utility Business Autumn 2011

range of industry stakeholders, finalising the development of their Smart Metering Installation Code of Practice (the SMICoP). The SMICoP covers all the consumer related aspects of the smart meter installation, from privacy, so consumers will have confidence that the smart metering data will be used appropriately, to setting out the level of service consumers can expect to receive throughout the smart meter installation process. It also sets out what is expected of smart meter installers to ensure that consumers are able to understand what their smart metering equipment can do for them. This is where the consumer engagement really begins.

Delivering the right consumer experience Consumer experience is also being developed by the National Skills Academy for Power (NSAP). NSAP are currently in the process of establishing a nationally recognised qualification for the installation of smart meters, which not only covers the technical skills required in installing and setting up the smart metering system, but also includes the ‘soft skills’ required to deliver the right consumer experience. ‘Soft skills’ are those skills needed to deliver the education elements of the visit, ensuring that the consumer understands the smart metering equipment and how they can use it to make informed choices about their energy use, plus equip installers to be able to answer any queries that consumers might have.

Not everything is simple We already know that installing 53 million smart meters will be a challenge in itself. We also know that not every smart meter installation will be the same. Problems with communications such as a meter that sits behind a kitchen cupboard and there is no signal to the meter to obtain a message, or in a basement that may flood , or the one that’s changed to pre-payment mode and sits 10 feet up on the wall that the consumer cannot reach are all business as usual occurrences. These issues are in existence today where meters are replaced, but with smart metering, the volumes will be higher. This is where the DECC Roll-Out Workstream will earn their stripes, making sure that the industry work together to identify solutions. How will smart meter installers tell the network engineers that their services are needed? These are the types of questions that need an answer to ensure that the consumer experience is top-notch. It’s not only the meter position that could be a problem for smart meters – there’s also the issue of data communication to deal with. With suppliers obligated to provide all domestic consumers with an in-home display (IHD) device, allowing them to see the detail of their energy consumption in near real-time, smart meters will also need to connect to a dedicated Home Area Network so that both electricity and gas smart meters can deliver information to the IHD, as well as delivering data to industry participants via the magic cloud in the sky (also known as the Wide Area Network). It is estimated that there could be data communication issues for over 20% of the GB housing stock. These issues must be dealt with, and the DECC programme is currently considering the various options that the technical experts are suggesting. Lots to do but we operate in an industry used to solving problems and achieving success. Making sure the consumer agrees with what we seek to achieve is going to be a challenge for us all. This article was kindly supplied by Engage Consulting Limited. For further information see their website: www.engageconsulting.co.uk or Tel 0207 4050740 Email info@engageconsulting.co.uk

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Smart Metering: The Customer Experience In a bid to understand early adoption experiences and to shed some light on the very real issues facing energy suppliers going forward, Utility Business took the opportunity to talk to two homeowners about their smart metering trial experiences. Like many of the ‘Big Six’, E.ON is installing smart meters in customers’ homes ahead of the ‘official’ roll-out start date of 2014. In May they committed to the installation of one million smart meters by the end of March 2014 and to date have installed 35,000 smart meters as part of a series of trials, and intend to install a further 100,000 by the end of 2011. Some proponents would comment that this strategy of early roll-out is not without its risks, as the meter technical specifications have yet to receive official approval (in UK & Europe) and there is still much discussion to be had and agreement to be reached around privacy, security and customer data issues. However, early installation will no doubt yield some competitive advantage in understanding customers needs better and in establishing systems competence and designing customer service support. This in turn should feed into the various workgroups Government has set up to manage and advise the core roll-out programme.


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Case Study One Property: 4 bed, 3 storey

Location: North West England

Date fitted: 5 July 2011

Spec: Gas & Electric

TACKLING DISRUPTION ONEXPERIENCE OUR ROADS A NEW ENERGY ERA // ACHIEVING AN EFFECTIVE SMART METER ROLL-OUT // SMART METERING : CUSTOMER

Notes: Received communication from EON in June 2011 with regard to free smart meter fitting. Decided to go ahead with the offer to benefit from accurate billing and automatic meter reading - it was always difficult to arrange meter reads previously due to lack of time spent at the property. Installation was arranged within three weeks of the initial correspondence and an EON representative arrived to fit the Gas and Electricity meters on the arranged date. When the engineer arrived he admitted there may be a problem. Outside of the property there was absolutely no comms signal to allow the meter to send the usage data. Therefore it was highly unlikely that there would be any comms signal within the property – which proved to be the case. E.ON are currently using mobile telecommunications technology provided by O2 for their smart metering trials. Fitting of the new smart meters was postponed and I was told that I would be placed on the system as ‘still requiring’ smart meters, however this would not happen until E.ON had another comms option available for this property/area. Overall rating: Disappointed but realise it’s still early days for smart. Would have liked some other comms options.

Case Study Two Property: 4 bedroom, 300 years old

Location: Midlands

Date fitted: 11 July 2011

Notes: I was contacted by EON in early June with regard to their smart metering offer and decided I had nothing to lose. Living in an older property built long before modern energy efficiency products, maintaining sensible heating bills and energy use is a challenge. Apart from the cost saving potential and benefits of accurate billing, another aspect I found appealing was automatic meter reading. Due to the difficult location of the electricity meter - in a loft – it meant that I always had to rearrange furniture to access the hatch and the meter reader had to climb up a ladder with a torch to read the meter. Invariably they did not bring their own equipment with them! Fitting was arranged within four weeks of the initial correspondence and two EON engineers arrived promptly to fit the meters. The 02 mobile telecommunications were found to be favourable in the area and the existing meters were removed and replaced with smart meters in a little over 2 hours, with the electricity and gas supply only needing to be turned off for about 30 minutes. E.ON is currently installing Landis+Gyr’s Libra 310p smart gas meter and 5236JY electricity meter. I was impressed with the engineers and the whole experience. They were extremely knowledgeable, helpful, able to answer all the queries I had and left their work areas tidy, as they had found them. They explained the smart energy display well and provided a supporting information booklet with contact details should any problems arise once they left the property. Additionally they recommended helpful home energy efficiency advice and proved competent and clued up on the wider issues around smart metering. As this was the second time in five years that the meters had been changed I had hoped that the electricity meter could once and for all be moved from the awkward loft position, but I understand this is quite a lengthy process.

Spec: Gas & Electric

I felt I was already reasonably energy savvy but as soon as the meters were fitted the in home display did affect my behaviour. The EON system works on a series of coloured lights – green to show low energy use, amber to show medium and red for high. If the red light was showing it made me stop and consider what was on and affecting the usage level. It has also prompted me to look for areas around the whole home that could be made more energy efficient i.e. insulation, low energy light bulbs etc. I am also keen to start running certain appliances overnight to use cheaper electricity tariffs – dishwasher, washing machine etc. Where the product does not have this capability I would certainly look for products that do support time of use programmable capability when replacing items. With regard to gas usage I would certainly consider running the central heating less, and turning down thermostats on radiators, though more because of the high cost of gas. You do not really quantify its use when it’s not being accurately measured. However, if it’s as cold as last winter I think I would have it on as much as I wanted! Overall I am hoping to achieve around a 2% energy bill saving through adopting smart meters and energy efficiency measures. Overall rating: Good. Pleased with no longer having estimated bills. Some behaviour change noted. There is a bit of discrepancy with the in home display as I now understand it does not give me completely accurate cost data based on my actual tariff. The data it gives is an ‘illustration only’ based on a standard day and night tariff. There is a bit of work required to tie up my in home monitor and my online account. This does not appear to have changed much since I went smart. Still a bit unclear what would happen should I wish to change energy supplier.

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SBGI Utility Business Autumn 2011

Advances in Broadband By John Cockaday, Department for Media, Culture & Sport

Ten years ago, the first wave of broadband investment showed it to be a driver of economic growth. One of the priorities1 for the Coalition Government is for the UK to have the best superfast2 broadband network in Europe by 2015, meaning that 90% of homes, on a local authority basis, able to access superfast broadband. The remainder will receive at least 2Mbit/s.

• New overhead lines. Using poles can reduce costs by as much as 50% and a presumption in favour of sustainable development for new overhead telecoms lines was announced in Budget 2011. A consultation will launch in September.

Commercial providers such as BT and Virgin Media have published plans to deliver superfast broadband to two-thirds of UK households by 2015. The Government’s approach is to provide a combination of policy and regulatory interventions to facilitate private sector broadband rollout, with targeted financial assistance for areas the market will not serve. The Chancellor allocated £530million for this in the Comprehensive Spending Review, October 2010.

• Micro trenching. We are issuing guidance to Local Authorities on minimal dig techniques, aiming to ensure a consistent approach, and clarifying the use of permit schemes for street works. •

Ofcom has recently published a snapshot of the state of the communications market in the UK3: • 68% of premises have a fixed broadband connection. The average maximum speed is 7.5Mbit/s •

Brighton & Hove has the highest take-up of broadband (80%)

Wayleaves and access to private land can be problematic for some communications companies. The Law Commission is to undertake a review of the Electronic Communications Code5 - the regime that governs the rights of communications providers to maintain infrastructure on public and private land. The review will examine whether the Code remains fit for purpose.

• Business rates. Industry has been working with the Valuation Office Agency (VOA) to propose a transparent system of valuation for broadband access networks that will reflect the costs of building new networks in rural areas. An announcement is expected next month.

• Edinburgh has the fastest average maximum speed (10.1Mbit/s), with Bristol just behind at 9.9Mbit/s • Luton, England and Newtownabbey, Northern Ireland have the most addresses served by a superfast broadband enabled exchange (100%) • An interactive map4 shows the performance of broadband across the country. Virgin Media, BT and a number of smaller suppliers, are installing Fibre to the Home (FTTH), Fibre to the Cabinet (FTTC) and advanced cable systems delivering up to 100Mbit/s, some with the potential for much higher speeds. 100Mbit/s and higher is termed ‘ultra-fast’ and, once a critical mass of users migrate to ultrafast, new applications, ways of working, doing business and delivering public services will be unlocked. We do not know what the ‘killer apps’ will be that will drive consumers to adopt ever faster connections, but the delivery of internet HD and 3D TV, whether by fibre or cable, is likely to be important, with many more channels and a high degree of interactivity, made possible by more nearly symmetrical upload speeds. We are working to reduce the cost of deployment, enabling the market to deliver to more households and businesses. Up to 80% of the build cost is in civil works, so it makes sense to reduce this, for instance by sharing existing infrastructure. •

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 ccess to BT’s duct and pole network. Some suppliers are unhappy A with the terms of BT’s offer for access to its ducts and poles, published in January. Commercial discussions and trials are ongoing - trials with Sky and Call Flow began in the spring and Fujitsu also signed up as a triallist recently. It will be for Ofcom, as the independent regulator, to determine whether regulatory intervention is appropriate. Using other utility infrastructure. A successful government-industry seminar in February, attended by the energy, telecoms and water sectors, encouraged dialogue on practical issues. Progress is continuing, and the Energy Networks Association held a workshop on the subject in June.

Broadband Delivery UK (BDUK) Three areas have joined the first superfast broadband pilots6. Also receiving support from their local authorities and private investors, they will receive: • • •

Devon and Somerset £30m Norfolk £15m Wiltshire £4m

Wales will receive £56.9 million and allocations to the other Devolved Administrations and for every local authority in the country were announced in mid-August. The BDUK programme will consist of thirty to fifty projects, each with a separate procurement process, for which the lead local authorities will be responsible (the Devolved Administrations in Scotland, Wales and Northern Ireland). BDUK is setting up a Framework, a pre-qualified list of suppliers setting out a reference delivery solution and pricing. Local authorities will run mini-competitions from the Framework to select suppliers for their projects. The Framework Contract will be between BDUK and a number of prime contractors and consortia; each call-off contract will be between the relevant local bodies and a specific contractor. • Suppliers only bid once to be selected for the Framework Contract, rather than face multiple procurements • The process will ensure more uniform private sector solutions while allowing local requirements to be met through individual call-off contracts • BDUK will seek State Aid clearance from the EC for all call-off contracts, avoiding separate clearance by local authorities.


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ADVANCES IN BROADBAND Cumbria County Council, one of the first pilot areas, has already begun the procurement process and published the tender notice on Tenders Electronic Daily (TED)7. Defra has contributed £20million in a new Rural Community Broadband Fund, helping to end the rural digital divide by enabling farmers and other rural SMEs to file vital paperwork electronically; children to do school work online; and for people in the countryside to participate fully in social networking and online shopping. The BDUK programme is technologically neutral and that a mix of technologies will be used in the projects, including mobile, satellite and fibre connections. Some of these technologies currently only support speeds below the superfast threshold, but technical advances may change that. The coming of 4G mobiles, for instance, will enable superfast mobile access. For up-to-the-minute news about BDUK see the DCMS web site http://www.culture.gov.uk/what_we_do/telecommunications_ and_online/7781.aspx

1) ‘Britain’s Superfast Broadband Future’, Department for Business, Innovation & Skills (BIS), December 2010, http://www.culture.gov.uk/publications/7829.aspx 2) ‘Superfast’ means 25Mbit/s or more download speed. This implies the use of fibre to the home (FTTH); Fibre to the Cabinet (FTTC); advanced cable connections; or 4G mobile systems. Certain wide area wi-fi systems can also deliver this performance. 3) ‘The Communications Market 2011’, Ofcom, August 2011, http://stakeholders.ofcom.org.uk/market-data-research/market-data/communications-market-reports/cmr11/ 4) http://maps.ofcom.org.uk/broadband/ 5) http://www.justice.gov.uk/lawcommission/areas/electronic-communications-code.htm 6) North Yorkshire; the Highlands and Islands of Scotland; Cumbria; and the Herefordshire borders 7) The online supplement to the Official Journal of the European Union http://ted.europa.eu/TED/main/HomePage.do

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LEADING VOICE

SBGI Utility Business Autumn 2011

Co-operative Energy launched on 9 May and is a new energy provider supplying gas and electricity to customers across England, Scotland and Wales. Utility Business caught up with Business Development Manager, Nigel Mason, to find out more about what this new entrant has to offer. The new independently licensed energy supplier Co-operative Energy is wholly owned by The Midcounties Co-operative, a consumer co-operative society entirely owned by its members, explained Nigel, when we met at their new head office location in Warwick. We are the only UK energy supplier democratically owned by its customers. When the UK’s ‘big six’ energy suppliers make big profits, it’s the shareholders who benefit, not the customers. When Co-operative Energy makes profits, it’s the customers who will benefit. Co-operative Energy operates as a ring-fenced business within the wider Co-operative portfolio, though shares common values. They currently have a team of twelve customer service agents, many of whom joined with energy industry experience. Throughout the Co-operative Group of businesses there is a commitment to making the world fairer for members, customers and suppliers by providing services at fair prices. Members have a say on how the Co-operative behaves as an ethical business, a responsible citizen and a committed environmental campaigner. Nigel explained that the Midcounties Co-operative had been looking to supply energy for some time, recognising a gap in the market for an energy supplier with a focus on ethics and rewarding its customers. Through a combination of careful planning and a bit of luck, a workable plan hit Co-op at the right time, shared Nigel, who himself was a key founder and central to the business planning. The reason it will work and customers will see a difference is in its simplicity, said Nigel. With over 4,000 tariffs in the UK, choosing one is overwhelmingly complex. We intend to make it easy for customers and we have one product and one tariff and will charge a single unit rate, whether a customer uses one unit of energy per month or one thousand. The unit rate differs slightly region-by-region in line with the differing distribution and transmission costs charged in each area. Co-operative Energy won’t try to be the cheapest with short-term, unsustainable price promotions nor will new customers receive preferential treatment over existing customers with cheaper prices. Instead, the aim is to be

Our thanks to Nigel Mason for generously giving up his time for this interview.

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consistently competitive for the long-term and in the event of a price rise, customers will be informed at least 30 days in advance. We also offer Co-operative Energy customers the benefit of a twice-yearly profit sharing deal. Additionally, we are pledging to source from low carbon energy – our electricity will be less than half the national average carbon content by April 2012. In broad terms the type of consumer who will be attracted to the product are the loyal, long-standing Co-operative members (of which there are 6.5 million), Nigel indicated, particularly in the Co-operative strongholds of Oxfordshire, Gloucestershire, Buckinghamshire, Shropshire, Staffordshire, the West Midlands, Wiltshire and Worcestershire. We also hope to attract professionals in our heartlands and London and the South East who are interested in something different. What we are not aiming at is the serial switcher. We will not be the cheapest, however, our pricing will sit in the lower quartile price in the league tables and will be consistent. Co-operative Energy was one of the first suppliers to sign up to the new Which? ‘Just Install. Don’t Sell.’ smart metering campaign, signalling an intention to participate in this market. The company is reviewing this area, said Nigel. Rising energy prices will start to make energy saving much more interesting and with programmes like Government’s Green Deal, energy services will take-off. A whole industry will emerge to manage this and it is highly likely CoOperative Energy will be in this space. Co-operative Energy is in this for the long haul, emphasised Nigel. We may move slowly initially but want to put everything in place for the long term. We aim to achieve a high level of brand recognition and be well established in the UK with a high proportion of consumers aware that Co-op supply energy. Furthermore, this industry traditionally has a lot of inefficiency and we intend to set a high level of customer service and satisfaction. With medium term forecasting at around 1% of market share, Nigel pointed out the success of the Co-operative Banking business, which commands a 2.5% market share. With cautious optimism, Nigel did not see any reason why they could not be as big a supplier of energy as they are of banking.


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News Extra

LEADING VOICE // NEWS EXTRA

Successful CCTV Inspection of Live 36 inch Gas Main Inspection of large diameter gas mains beneath busy city centre streets could soon be quicker, simpler and even more cost effective. Successful trials have been carried out using a vertically-launched self-propelled CCTV camera vehicle for internal inspection of live gas mains. Until now, the section of pipeline to be surveyed needed to be temporarily decommissioned and the camera was launched horizontally by means of a cut-out. The new remote-controlled SynthoTrax™ crawler CCTV system carries the SynthoCam™ Pan and Tilt camera. With 360 degree circumferential vision and 270 degree angulation, the camera system affords a clear view of joints, junctions, defects and obstructions. During trials in London and Huddersfield, the crawler successfully negotiated gradients and bends, and overcame debris and obstacles. Introduced through a 160 mm top tapping, the new Synthotech inspection system requires only a one metre square access excavation to facilitate live surveys of gas mains from 20 inches in diameter, up to 2bar operating pressure.

Crossrail’s Zafry Mohamed concludes, “The whole experience taught us about new ways of doing things. We now know we can use a camera and crawler system for other parts of London. There is currently no other company offering live internal camera surveys of gas mains of such a large diameter - this is definitely the way forward!”

During preparations for the Crossrail Farringdon Road station in central London, Synthotech was asked to survey an old 36 inch medium pressure gas main. The main was thought to be unable to withstand settlement resulting from the nearby construction work. Zafry Mohamed, Design Manager Enabling Works, takes up the story: “The camera provided a close-up picture of the joints, cracks and general condition of the inside of the main. We were able to locate all the joints and identify that they had been treated with internal sealant back in the 1980s.” The Farringdon Road survey took place on a bus route. Major disruption to traffic was avoided and the duration of the work was kept to a minimum. It had previously been thought that encapsulation would be necessary, but the survey proved that not to be the case. Neil Carlsson of contractor JB Riney continues, “Our original plan was for five excavations, but in the end just two pits were required, one at each end of the main. The whole survey was completed in one day, in half the time expected. The project made huge savings of time, money and inconvenience to the public. The team had more certainty going forward and knew exactly what additional work needed to be carried out prior to construction.” Nigel Watts, Project Engineer, adds, “We didn’t want to decommission the main because of its location and the resulting disruption to the gas network. The crawler system enabled us to vertically launch the CCTV camera via a six inch drilling into the top of the live main, instead of doing a cut-out and purge. The system was very impressive. We inspected around 200 metres of pipe, locating a total of 52 joints.”

SynthoTrax™ > SynthoTrax™ is the UK’s only ‘live launch’ crawler CCTV system for metallic gas mains with no requirement for a cut-out and purge

< The SynthoTrax™ Crawler The SynthoTrax™ crawler can travel up to 200 metres in either direction making the system ideal for urban centres and busy main roads

SBGI Golfing Circle The four man team (pictured left) from National Grid Affordable Warmth successfully defended their ‘Captain’s Challenge’ trophy in July, narrowly beating Circle Captain Gary Wignall’s team into second place. In third place was the SBGI secretariat team. SBGI would like to thank all 40 players who attended this excellent event at Ladbrook Park Golf Club.

The Circle’s final event of the year will take place on October 5th at King’s Norton Golf Club, Worcestershire.

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SBGI Utility Business Autumn 2011

Member Directory GAS STORAGE OPERATORS GROUP BGE Ltd (Bord Gais Eirann) Centrica Storage Cheshire Cavity Storage Group Ltd EDF Trading Gas Storage Limited Eni Uk Ltd E.ON Gas Storage UK Ltd Gateway Storage (Stag) Halite Energy Group INEOS Enterprises Ltd Infrastrata Scottish Power Gas Transportation Hatfield Ltd SSE Hornsea Ltd Star Energy Group plc Statoil Storengy WINGAS Storage UK Ltd DISTRIBUTION & TRANSMISSION EQUIPMENT GROUP Aeon Pipe Systems Ltd AVK UK Ltd Caldervale Technology Ltd Crane Ltd t/a WASK Drain Center Fiorentini UK Limited Fusion Provida Limited Gas Measurement Instruments Ltd. George Fischer Sales Limited GPS nrg2 Pipeline Technology Ltd PLCS Limited Radius Systems Ltd Sarco Stopper Limited Syddal Engineering Limited Synthotech Special Products Limited Technolog Limited Talis (was Tyco) DATA & COMMUNICATIONS MANAGEMENT Alcatel Lucent Arqiva ELEXON Ferranti Computer Systems Hewlett-Packard Ltd Logica UK Ltd Sensus Conservation Solutions Serck Controls Utiligroup Ltd NETWORK ENGINEERING GROUP AMEC Group Limited Balfour Beatty Utility Solutions Bureau Veritas Carillion Utility Services

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Clancy Docwra Limited Enterprise plc Fulcrum Future Energy Group GL Noble Denton Morland Utilities Ltd Murphy Pipelines Limited National Grid Northern Energy Connections Ltd Northern Gas Networks Ltd P N Daly Limited PMI Denholm Squire Energy Ltd Veolia Water Outsourcing Ltd METERING SERVICES GROUP EDF Energy Customer Field Services E.ON Energy Services G4S Utility Services Ltd Lowri Beck Services Ltd OnStream Providor Pulse 24 Siemens Metering Services Tuffentech Services Ltd METERING TECHNOLOGY GROUP D I UK Limited Elster metering George Wilson Industries Limited Itron Metering Solutions Landis+Gyr Secure Meters ASSOCIATE MEMBERS BG Group plc ByBox Capita Symonds Ltd CEVA Logistics Limited CNG Services Ltd Cripps Sears Develop Training Ltd DHL Supply Chain Engage Consulting Enzen Global Ltd Generis Technology Ltd Gerald Eve LLP Gtc Jonathan Lee Kingsley Plastics Ltd Lighsout Computer Services Ltd Rhead Group Ltd Street Work Solutions Turner & Townsend Wilcock Consulting Wood Group Pressure Control Ltd Xoserve

New Member

Utiligroup is a leading UK based provider of value to those operating in the energy and utilities sector across a client base of nearly one hundred clients in the UK, Europe, USA and Asia Pacific. The group enables those participating in the sector as energy producers, traders, energy suppliers, self-suppliers, renewable energy solution providers, energy service companies, meter agents, asset financiers and distribution network operators to operate effectively, focus on strategic objectives and comply with market operational requirements. Client value is provided through an integrated solution model comprising their own product based software, managed services, trusted guidance, delivery management and partner capabilities. Their value was originally focused on the core requirements of market interaction management in compliance with regulatory and market processes, timescales, data and governance obligations. Building upon their core values they have added solutions to use the data from the market in combination with that from operational assets, trading portfolios and customers to enable holistic intelligence based decision making in real-time and resulting operational execution. Additionally Utiligroup has pioneered such areas as selfsupply for major energy users with Wal-Mart (for their ASDA stores in the UK) and an expedited, proven route to market for new entrant energy suppliers, which liberates them from industry complexity. By removing industry complexity from their clients they enable their operational focus, introduction of change, agile response to market evolution and profitability. With a heritage in solutions for the electricity market since the mid-1990s, Utiligroup has expanded over recent years into integrated dual-fuel based solutions that cover gas trading and operational delivery, automated gas retail operations and gas metering agent roles. In the UK market, Utiligroup provides solution value across the big six energy companies, international diversifying energy majors, entrepreneurial new entrants, renewable energy companies, major end users, meter financiers and trading banks. In recent months they have underpinned the supply market entry of Co-operative Energy and announced a partnership that will support the transformation and growth of Good Energy. Utiligroup is active in the delivery of solution value for the new energy economy in areas such as Smart Metering, Feed-In-Tariffs, Renewable Heat Incentive and the Green Deal. Following a successful acquisition in 2010, Utiligroup is part of Bglobal PLC, a service based provider of smart metering services, energy management and data value realisation for energy customers, networks and markets.


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MEMBERSHIP DIRECTORY // SBGI EVENTS 2011

SBGI Events 2011 Utility Metering Smart Rollout – An Olympic Challenge

Wednesday 14 September - National Motorcycle Museum, Birmingham Join delegates from across the supply chain to hear the latest views and opinions and enjoy high quality networking provided by the topical exhibition. This year’s seminar will review: • • • • • • •

What has been learnt from smart trials? Is the UK on track to deliver? Protecting consumer interests Stakeholders views spanning supply, meter manufacturing and installation Optioneering for DCC Wider industry data issues Early deployment experience

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Gas 2011

Thursday 13 October - IMAGO, Holywell Park, Loughborough Yesterday’s fuel of choice or the bridge to a sustainable energy future? This polarised view of natural gas’ role in the UK’s forward energy mix continues to be debated across government and industry. This joint SBGI/IGEM seminar includes a stimulating programme from across the industry supply chain from shale gas exploration to the latest innovations in heating appliances. --------------------------------------------------------------------------------------------------------

Transforming Utility Performance

Tuesday 29 November - Chesford Grange Conference Centre, Leamington Spa This Sixth annual Strategic Change and Performance Improvement Seminar provides a forum for sharing best-practice from experiences across water, power and gas sectors. Short presentations and case studies, from key industry speakers will focus on lessons that major utilities and their service suppliers have learned from strategic change projects implemented in the past year. --------------------------------------------------------------------------------------------------------

SBGI Dinner Dance

Friday 10 February 2012 - Hilton Birmingham Metropole One of the best social events of the year, the Dinner Dance is expected to attract over 600 senior representatives from the domestic heating and utility networks sectors. Enjoy a superb five course dinner and live entertainment including comedian and dancing to live showband Hot Stuff.

For further details and booking: www.sbgi.org.uk Event contact: Claire Pitt claire@sbgi.org.uk 01926 513726

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SBGI Utility Business Autumn 2011

Viewpoint Tony Smith has been Chief Executive of the Consumer Council for Water for five years. In that time the organisation has delivered strongly for consumers, especially during the 2009 water price review. Here he talks about the importance of consumer satisfaction with the value for money of the service they receive to the long term sustainability of the water sector.

Customer satisfaction and delivering customers’ expectations matters The Consumer Council for Water has long argued that one of the overriding indicators of success for any water company, and the industry, is its customers’ level of satisfaction with the value for money of the service it provides. Customer satisfaction is a strong indicator as to whether customers will accept future price increases and other changes the water industry needs to make. Customer satisfaction is therefore central to a sustainable water industry. We have been measuring this important indicator since 2006. Generally across the water industry, customer satisfaction with value for money is uncomfortably low, trailing customers’ satisfaction with the service by more than 20 percentage points on average.

With this question over sustainability of prices in mind, it’s somewhat encouraging that overall satisfaction with value for money of water services across England and Wales has actually improved slightly. However it’s still the case that customers think their telephone landline and energy suppliers provide better value for money.

There are exceptions and certain companies score highly on this measure. These are companies that have worked hard on working and communicating with their customers.

Not getting to grips with customer satisfaction with value for money today will threaten the sustainability of the whole water industry model and the improvements it can deliver tomorrow.

We discovered in our research during the water price review in 2009 that the companies who worked closely with their customers and scored highly on satisfaction with value for money, found their customers were more receptive to their plans and any future price rises. So companies need to focus on satisfaction now to deliver results in the future – and customer satisfaction matters to the sustainability of future price increases.

As the industry contemplates continuing price increases for customers over the next 20 years to fund the Water Framework Directive, long term security of supply and to address flooding it needs to listen to its customers.

By contrast, companies where satisfaction is low face a huge challenge in getting customers to accept proposed improvements and higher prices. The situation in the south west of England, where the legacy of environmental improvements has left people with high bills, highlights the real challenge - where prices dramatically outstrip customers’ acceptability and therefore willingness to pay. When asked in the last price review, only a third of South West Water’s customers said they were willing to accept the company’s

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draft plan that proposed a 7% price increase over the period. This shows that low customer satisfaction constrains customers’ acceptance of funding future improvements.

The more central customers’ views become to decision making on issues like changes in tariffs, the charging system and metering, the more likely it is that improvements will be delivered at a pace and a price that is accepted and customers are willing to pay for. And it is this that will improve customer satisfaction and see the water sector comparing well with other sectors. The alternative is an industry that drives improvements and bill increases faster than customers will accept and ends up with more regions with low customer satisfaction, high complaints and a high political sensitivity, which is simply no good for the long term sustainability of the sector.


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VIEWPOINT

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Utility Business Autumn 2011