Flex 1: Disruption
Welcome to the first issue of Flex, Utility Week’s new technology quarterly.
As the industry embraces the 3Ds of decarbonisation, digitalisation and decentralisation, no corner of the water and energy marketplace remains untouched from the hurricane forces of technology-driven disruption. Each quarter we’ll be charting this upheaval, with all the challenges, opportunities and successes it creates, from the perspective of those at the helm and those running to keep up.
In this first issue, for example, we ask whether new technology is driving better customer engagement? Is auto-switching the next big thing? And can virtual and augmented reality technology really provide the answer to the skills crisis?
We also ‘download’ the 16 apps that no utility firm should be without and reveal where one of the industry’s potentially biggest disruptors, Electron’s Jo-Jo Hubbard, finds her inspiration.
But while technology may underpin this journey of productivity and service improvement, it will only ever be as effective as the leaders looking to harness it. Technology-driven transformation goes hand in hand with cultural transformation, one of the key themes of this first issue. Changing with the times is not the preserve of the digital and IT experts; it has to go to the very heart of the sector’s structures and culture, driven from the boardroom and down through the company.
As National Grid’s new chief information and digital officer, Adriana Karaboutis, tells us (see Interviews) successful cultural transformation is always a partnership. It’s also about moving at the right pace for the business and taking just the right amount of risk.
And that’s the rub for the legacy firms – move too fast and the risks increase; move too slow and get overtaken by the new kids on the block. One thing is for certain, though: standing still is not an option.
Denise Chevin, Editor, Flex
Download the complete first issue of Flex in pdf format here:
Transformation: What every disruptor
needs to know
By Gavriel Hollander
“One of the main issues you have when it comes to the big, old utilities is cultural,” explains Erik Nygard, chief executive and co-founder of Limejump. “They were never created to solve problems so that’s never been their business.”
Limejump, a company that began life in 2013 as an aggregator for industrial clients in the flexibility market and now – among other things – manages the UK’s largest portfolio of batteries, is representative of the sort of problem those “big, old utilities” are facing. In a nutshell, that these kind of disruptor organisations may soon make them obsolete.
The speed of technological development over the past decade has transformed the entire sector to the point where the incumbent big beasts of the energy market in particular face challenges from every direction.
Digitalisation – whether in the form of smart metering at the consumer end or predictive analytics of assets at the supply end – may open up new possibilities and revenue streams for utility companies, but the influx of more nimble competitors means there is also real danger for those who are slow on the uptake.
In essence, if the market is changing then anyone wanting to play in that market has to change as well. And the bigger the tanker, the harder it is to turn around.
So if business transformation has become a necessity as opposed to an option, what will this transformation look like? And what must companies keep in mind when embarking on their journeys?
First of all, it’s important to understand the nature and scale of the threat to traditional utilities. In the energy sector at least, the challenge is genuinely existential. The major suppliers’ loss of market share is already a fact of life, but failure to respond could be fatal.
Bulb, to take one high-profile case, has grown from virtually nothing to taking 750,000 customers in the space of just 18 months.
As Nygard puts it: “If big monolithic organisations fall away, then the industry will be fine. Bulb is an example of how you can rip nearly a million customers out of the market with just a couple of hundred staff. Imagine 20 of those and that’s taken virtually the whole market.”
Limejump itself is another example of the sort of company that demonstrates both the threat and the opportunity that the digital age presents for utilities. As a self-proclaimed disruptor (it identifies itself as a tech company, rather than an energy company, on its website), it certainly represents a challenge to the incumbent players. Yet the range of services and revenue streams Limejump has developed in just five years also shows that there is untapped potential for those willing to take a risk.
“We first entered by telling customers we were aggregating flexibility and selling it to National Grid,” recalls Nygard. “It was just simple products in 2014, then we got a supply licence in 2015 and sold into the wholesale space. The next year we got into dynamic frequency response, and we have built on that.”
Limejump’s revenue is now split across a number of business streams: managing power exports; trading in the wholesale market; taking fees for managing credits for distribution network operators (DNOs); as well as from the capacity and dynamic response markets.
The company’s flexibility and adaptability are what has driven its success, but it is also a model for others looking to change their business model. The problem is how to bring about this change and make it work. Nygard himself used to work at British Gas, so understands the nature and scale of the task facing the incumbent major players.
“I’ve spent enough time in the larger utility space,” he elaborates. “One of the reasons Limejump started was because it was quite clear there was not enough technology infrastructure across these businesses to really deliver value to customers in the power market.
“Electricity can be controlled but the solutions were not readily available to end customers. We thought about how we could rebuild a utility model with the customer in mind.”
The Amazon threat
Of course, keeping the customer in mind is something that most businesses strive to do anyway. The point is that it is easier said than done, and that is why real transformation is often necessary.
“The number one thing that is changing in the external environment is customer expectation,” says Nigel Watson, director of information services at Northumbrian Water. “They are set by their last best interaction with a service provider, whoever they may be. So we compare ourselves with other service providers, not with other water companies.”
What that means is that utility companies need to start taking lessons from outside the sector if they aren’t going to be swamped by new entrants. And those new entrants aren’t only the nimble start-ups like Limejump and Bulb; they could also include some of the biggest organisations in the world.
“In the retail space for energy you could easily see an Amazon Echo or a Google Home completely changing the market,” predicts Graeme Wright, CTO manufacturing, utilities and services, Fujitsu UK & Ireland “The data Amazon and Google could collect through increased home automation is something that could help consumers in a very real way.
“Is that a catalyst for change? Could it be genuinely disruptive? I think actually as that type of technology gets deployed then the Amazons of the world could start powering what’s going on with microgrids or grids in the distribution transmission space.”
Wright says a supplier could source information from an Amazon-style data company “that could tell you exactly what’s going on in a house”.
He continues: “You could get a message from a power company that says ‘if you turn off these lights, they’ll pay you x’. That could become a completely different business model from one that we see today.
“You can see that there’s a logical set of steps that could get there in the future. It’s happening in pockets, but it would only take one organisation to join up the dots. And the person that does that will be a data company that may not exist today but will exist at some stage.”
The legacy problem
Much of that might sound like crystal ball-gazing at the moment, but in a sector that is changing at a pace never before seen, it’s the kind of thinking that needs to be happening already at C-Suite level across the industry.
This is where the problem of legacy starts to be felt, and more so the bigger the organisation. Furthermore, when it comes to transformation, the legacy issue applies as much to people as it does to technology or business models.
“Legacy, which includes people, is probably what holds most organisations back when it comes to transformation,” states Wright. “It’s the killer of transformation.”
Matthew Evans, managing director and leader on the Internet of Things at techUK, agrees that overcoming the legacy issue should be the most urgent item in the inbox of any CEO at a major utility.
He cites the proposed merger of SSE and Npower, which got the go-ahead from regulators in August as further evidence that the big six will struggle to retain market share. But simple consolidation won’t help when a cultural shift is what is required.
“They are hindered by legacy systems, which the new disruptors aren’t,” he explains. “It’s a real open question as to who will be supplying our energy over the next five to ten years. It’s quite likely it won’t be traditional suppliers, and that introduces an incredible amount of risk for those companies.
“You’ve got to have your leadership completely on board and have responsibility at board level. You need that to get over that organisational inertia that companies can have.
“It’s also making sure people have the right skills and understand why they need them, in a digital context, not an IT context. If digital transformation is seen as an IT thing then it’s probably going to fail. You need the wider buy-in.”
Getting that buy-in can be a tricky prospect. Former Npower chief executive Paul Massara, who recently took on the same role at blockchain start-up Electron (whose co-founder Jo-Jo Hubbard is interviewed on p9), says the success or otherwise of digital transformation comes down to the people involved.
“There’s been a mixture of success and often it comes down to culture,” he continues. “Often companies say the old market is dead and we have to move away; we get the guys in jeans and black T-shirts to fly around the world scouting out new ideas.
“They come back and the first thing the CEO does is ask his engineers to test it. Meanwhile you’ve been telling the engineers that they are historic and don’t know what they’re doing, so the first thing the engineer does is he looks at it and gives 101 reasons why it won’t work.
“That cultural problem is definitely one we run across. How much does the venture arm integrate with the old, traditional business? There can be a massive culture clash.”
Although it is operating in a different market, Northumbrian Water understands that buy-in has to be across the board if innovation is to take hold. “We don’t have an innovation department,” explains Watson. “Part of our culture is that it is everybody’s job.”
The company has used some of the techniques found more often in Silicon Valley than Teesside, such as data hacks and innovation festivals (see box p15), to develop new ideas to tackle the challenges of a digital age. But being able to demonstrate real-world instances of how changing the way you do things can transform the business is the most valuable tool.
Watson gives an example of some of Northumbrian’s data analysts looking at the performance of sewage pumping stations to predict when they might fail. On encountering scepticism from engineers in the field, they agreed to meet at a station they believed to be on the point of failure and were found to be right. But Watson accepts that events won’t always play out like this.
“We’re right about seven times out of ten because data is imperfect. We want to get that to eight or nine but it won’t be ten out of ten.
“So it’s about culture and being humble and being brave. We need to say what we’ve got isn’t perfect and ask our people to work with us.”
But what about the energy sector? Is there enough successful innovation being deployed to keep existing companies in the game and to satisfy ever more demanding consumers?
According to techUK’s Evans, the sector “is in a relatively good place” because of its strong engineering focus.
“There is no sector – even tech – that has the right skill level to manage the digital revolution we’re all being disrupted by,” he expands. “In energy, I’m relatively positive about the skill set, but there needs to be a greater willingness to collaborate both within the sector and outside of it, and a mindset change when it comes to data and sharing it.”
The situation could be helped by the regulator (see box p13), Evans says. “The regulator can play a role by ensuring those already in the market are allowed to change. There have been instances where innovation in the sector is challenging because of the regulation that exists. There’s good reason why it does exist, because of safety or to keep the lights on, but we have to make sure the balance is right because carrying on doing things as we are is not going to be sustainable or safe or keep the lights on.”
And indeed there are myriad examples of companies not carrying on doing things in the same way, particularly when it comes to the relationship between supplier, end user and the grid.
Ovo Energy recently won praise from the government for its smart meter-enabled electric vehicle platform, VCharge, which allows drivers to sell energy back to the grid.
Massara’s new venture, Electron, similarly reimagines the traditional relationship between consumer and supplier. It is working alongside National Grid and two DNOs to build an asset register, using a blockchain solution, to enable hundreds of thousands of new, smaller consumer-owned devices to help balance the grid.
So while there are very real threats from across the board, the utility sector is trying to adapt. It just needs strong leadership.
“It’s a top-down change,” concludes Limejump’s Nygard. “So you need CEOs that are maverick, not old-school corporate leaders.
“There’s a lot of good stuff happening. The challenge is making it work, and letting it be more than just rhetoric.”
What about the regulator?
Ofgem’s new sandbox aids innovation
It’s fair to say that a regulated industry and disruptive innovation may not always be the easiest bedfellows.
However, Ofgem has made a concerted effort to embrace new technologies and ways of working. In December 2016, it launched its ‘Innovation Link’ to offer feedback on the regulatory impact of new ways of working. It also provides a ‘regulatory sandbox’ for testing products and services.
“The energy sector is transforming at a faster pace than most people expected, so it is hard to predict which technologies will have a transformative change,” Daniel Kirk, head of Innovation Link tells Flex. “Our job is not to back any particular technology. Instead we make sure that regulation is fit for purpose, and does not hold back any new developments that could
So far, more than 150 organisations have sought feedback through the Innovation Link, with more than 80 per cent of these not companies already involved in the energy sector.
Among those making use of the sandbox are innovators developing peer-to-peer trading platforms, ‘concierge’ services that help switch consumers to the best tariffs automatically, and smart devices designed to reduce
“It is always good to see the breadth of ideas people approach us with,” adds Kirk. “We are also finding that everyone, from small non-profit organisations to large corporates from other sectors, is interested in innovating in energy.”
Northumbrian Water – data hacks and innovation festivals
Having recognised that innovation isn’t simply a ‘nice to have’ but an essential tool, Northumbrian Water has made it part of its culture.
This July saw it host its second Innovation Festival at Newcastle Racecourse: an event that attracted more than 140 businesses to come together to solve real-world problems that were affecting the business (pictured above). As part of the festival, Northumbrian invites teams of data scientists from other companies or universities to take part in a data hack, sharing its own data. During one of these ‘hacks’ looking at spills from sewage pumping stations, a correlation was found between water flow, power usage and when the asset would fail.
The team of scientists then came into the business to work with field crews, resulting in an 80 per cent reduction in those incidents.
Download the complete issue of Flex in pdf format here: Flex October 2018
In the first of a new series, the co-founder and chief operating officer at Electron, a developer of blockchain-enabled trading platforms, talks us through the important tech in her life.
By Denise Chevin
What’s the most exciting bit of technology you are working on at the moment and why?
At Electron we’re developing shared digital infrastructure for the energy sector. For example, an asset register that creates a digital twin for all energy assets in the UK, whether generation, storage or gas and electricity supply points.
This might sound fairly basic at first, but it provides the foundation for a truly optimised, distributed grid. Without knowing what and where the capabilities in the system are it is impossible to make efficient use of the asset base we already have, let alone all the new assets, such as electric vehicles, that are about to hit.
Moreover, this platform will provide a basis for an ‘app store’-type model in which various service providers can interact with asset owners. Think any sort of contract from supply, aggregation, insurance, data procurement… The energy service model is about to change very fast.
We have the data framework in place and are launching a project to populate it in October with National Grid and two network operators. It’s early days, but it’s the first step as we see it to a digital grid.
What technology, piece of kit or process advancement has excited you most in your working life and why?
First solar and then batteries – now EVs. Can I have three? What unites these technologies is that their roll-out is consumer-led, and that means very fast and not subject to central planning.
Taking solar in the UK alone, nothing in 2000; more than one million installations today and likely closer to five million by 2030. These technologies just get adopted and it changes the game that everyone can play around them. One day we are on a chess board, the next day it is a surf board! The markets have to play catch-up.
How do you like to communicate?
Face to face. We are all drowning in daily emails and messaging apps. It feels like someone else’s to-do list being forced upon you. If you really want to know what someone thinks, you sort of need to look them in the eye…
What bit of technology couldn’t you be without at work?
My Uber app. That’s going to be a deeply unpopular answer and I may get black-balled by the London Cab Association. But I travel a lot – four-plus flights a week and outside of Europe. It means a lot to land somewhere foreign and walk out into a car both from an efficiency and a safety point of view.
The resource efficiency of the Uber business model is also very compelling. No wonder people have been claiming “the Uber for X” business models for so long. What could it be in energy? Uber for batteries? Surge for batteries?
…and at home?
This one is so obvious. I’m famously attached to my phone. My husband has threatened to buy me one of those collars that dogs wear round their necks after an operation to stop me checking it all the time!
If money was no object?
BMW i8? Actually, I don’t think it will ever make sense to own a car in the city. Maybe a microgrid with a bunch of kit on it for experiments.
Most admired entrepreneur or business leader
I’m not sure there is any one individual. I’m sort of an iconoclast so it is easier to align with causes than individuals. For example, everyone in cleantech owes a huge debt to Elon Musk for dropping the cost of capital for the industry at a much-needed time.
The other day I read a pretty inspiring interview with Whitney Woolfe (the founder of Bumble, an online dating platform) about not being afraid to cannibalise your own market in order to better serve your customers and stay on the front foot of transforming a market. She is extremely impressive.
Technology can never replace…
Physics. Ethics. Relationships…
Book/talk that has inspired you?
I still remember a talk by Zadie Smith (a British novelist) that I heard when I was at Oxford entitled “Fail Better”. It was about the relationship between one’s work and one’s sense of self. The need to get started, create something, make mistakes, forgive oneself, go again and then fail again but in a new way. Viewing the act of creation as iterative rather than finite is empowering.
Jo-Jo specialises in digital transformation and the distributed grid. She started her energy career in asset financing for renewable projects before moving to McKinsey as a strategy consultant with a focus on digital transformation.
She co-founded Electron in 2016 with a mission to create more efficient energy and flexibility marketplaces.
Adriana Karaboutis: Find your North Star*
How do you go about driving digital cultural transformation throughout a utility colossus straddling both sides of the Atlantic? National Grid’s Adriana (Andi) Karaboutis tells us first you must find your North Star*
By Suzanne Heneghan
She’s no stranger to big remits, but technology guru Andi Karaboutis is the first to accept that her job at National Grid is huge.
It’s just a year since she took on the newly created role of chief information and digital officer at the multinational utility behemoth. In fact, “one year, two weeks,” as the US-based, entrepreneurial thought leader happily points out. “But I’m not counting, I’m celebrating,” she laughs.
Despite the miles, the reputed trademark enthusiasm that’s brought her renown for driving innovation across a gamut of industries, including automotive, high-tech, big pharma and defence, is unmistakable during our transatlantic call.
And that Karaboutis, who has worked with such global titans as General Motors, Dell, Ford and Biogen, has offered to chat during what for most people on the eastern seaboard is the early hours of a public holiday, speaks volumes about her passion for this latest role.
Her ambition for harnessing key emerging digital opportunities that will bolster the company’s adapting UK and US business models comes through loud and clear. As does her conviction to see them play vital roles, particularly in terms of security, resilience and customer service, as well as bringing real value through technology for National Grid.
A top electronic computer control systems graduate with a CV so strong she could work pretty much anywhere on the tech career spectrum, it soon becomes abundantly clear that the energy sector is now her inspiration.
She is quick to cite the thoughts of one of her heroes – Microsoft’s principal founder – on the subject. “I often quote Bill Gates, who says if he were to start all over again, one of the top three areas he would go into would be energy. And I used to think to myself, I feel that way as well.”
This, she reveals, is what made the opportunity with National Grid unmissable. “The energy sector is at a great crossroads where technology can influence it tremendously and bring great value for consumers, producers and utilities alike.
“I see an appetite in the energy and utilities sector, a willingness to really look into what technologies can bring and what the opportunities are, and I see that both from the regulator’s side as well as the provider’s. And I really wanted to be part of that, it’s exciting.”
Fundamental to this has been the broad scope of the role, combining both National Grid’s IT and its digital operations to help the company meet its vision to ‘exceed the expectations of customers, shareholders and communities today and make possible the energy systems of tomorrow’.
And her appointment (in July 2017) came during a period of pivotal movement, both for National Grid itself (including the separating out of its system operator function from the rest of the business), and the increasingly dynamic and flexible energy landscape it works within.
“I was brought on board as the CIO and digital officer, which is hugely important. Because while it encompasses information technology, it also recognises the need for digital – which is how do we drive things like distributed energy using technology, better customer experience and customer enablement, frictionless working, frictionless employee and digital asset management. All of those things are under the umbrella of digital, and IT is core to all of that. So the recognition that those two things are partners and come together into one role was very exciting for me.”
The post itself, with oversight in both regions, sees Karaboutis working very closely with her executive direct reports in the UK and US. It’s a technological realm that incorporates everything from running the corporate systems, to the company’s cyber-security and physical security. Safety and reliability of service are naturally paramount, ensuring ‘seamless capability’ in a 24/7 company she deftly characterises as being “always up and always on”.
“We have a strategy that encompasses everything, so yes my role and remit are big. But that strategy involves a significant and heavy partnership between the UK and US business units, which talks about what needs to be done and how well we need it done.
“The role I have is to ensure we have an IT and digital organisation that executes on it and gets it done to the region specificity – and brings new technologies to the table. So when you think about blockchain, analytics, machine learning, all of those things, I feel accountability with my colleagues in the business to see how we leverage those.” A “huge focus”, she adds, is on the customer, “delivering energy when needed, where needed and in the quantities that are needed”.
Yet neither the job’s breadth, nor its being within a publicly traded utility, holds any concern for Karaboutis – quite the opposite. “I think it’s very exciting that this huge British multinational is able to do great work on both sides of the Atlantic, and that just added to the attraction for me. Because you’re dealing with two sets of regulators, two sets of legal formats, you’re dealing with opportunity. There are some very advanced stories in the UK, and in the US. In many ways that just adds to the intrigue. And I’m also very interested in the global aspect of energy and what can be done.”
Critical to driving technological change at National Grid, says Karaboutis, has been the openness of the executive committee, led by CEO John Pettigrew – its willingness to look ahead, albeit “with huge respect for its separate entities and regulators”.
Particularly notable has been a commitment to recently setting up its venture capital team in California’s Silicon Valley, as well as two digital innovation labs, one on either side of the pond, at Warwick and in Massachusetts.
The digital labs are charged with bringing in new technology and working on use cases identified by the business, to see if they can answer questions or provide fresh insights on issues such as customer engagement, asset management and distributed energy services.
Additionally, the venture capital team brings innovation to existing components of the business, such as engineering. It looks into new ideas, for example around battery technology or new opportunities for the cloud.
A lot of this Californian activity can then land in the US and UK digital labs, which monitor and apply it to business problems. It all adds up to a compelling partnership, says Karaboutis, and one that is already paying dividends.
Yet being agile enough to innovate and embrace constantly changing opportunities and needs can be extremely demanding when combined with running any utility, let alone a gargantuan, global one. Karaboutis’ answer is: “You never lose sight of the basics – the 360° view of the business and the needs and the opportunities.
“We start from a position of safety, safety, safety, never-to-be-compromised security, and not interrupting what we need to do for our consumers. That is the cornerstone.
“Then we look at the next thing we need to do to drive more of that, and efficiency and customer satisfaction. And then we take a very measured approach – and it’s never IT’s or the digital team’s alone – it’s always with the business in mind, it’s always a partnership.
“I always say you have to have a North Star. And then you say ‘where are we today, what is the right path, and at what pace?’. You need to ensure that you’re taking the right amount of risk – and never too much.”
What was your first computer?
A 286 IBM PC, and when the 386 came out it was pretty exciting.
Is there one piece of tech you can’t live without?
Can I choose two? My phone and my car.
Who is your technology hero?
There’s two again. Obviously, Bill Gates. Also, Michael Dell – a brilliant man who knows how to sniff out a way to bring technologies and companies together.
Did you have a technology mentor?
The Group CIO at General Motors, Ralph Szygenda. He mentored me not only on technology but on leadership. And he did not mince his words. He constantly challenged me and called me out. And in this world being honest with each other, calling each other out, is really important.
Where is your favourite place in the world?
I’m Greek, I was born in the US but my family are first-generation immigrants, and so I love to go back. That’s where my roots are. Both my parents are from Cephalonia.
Do you have a favourite film?
I feel I should really say something like War and Peace. But it’s actually Pretty Woman, because the underdog won.
Q&A: Adriana Karaboutis
Q How did you approach being a newcomer to the sector?
You have to have a ton of humility and really be understanding. The other thing is to think not just technology but also renewable technology. We’re going from a world of coal, oil and gas to solar, wind and power. And a combination of all of those. So really understanding what the trends of the future are – micro grids, distributed energy, and the services around that.
Q Can you give a standout example of what’s been developed through the NG Digital Labs this year?
We’ve got several but one that’s pretty exciting for us is how do we apply technology to be able to do much better asset management? Where the assets have sensors and can have some edge computing that will allow us to call out, without having to do all the manual inspections or drone inspections. To be able to have those assets actually do what I call, “phone home”.
Q Do you feel that National Grid is keeping up well with today’s challenges?
I joined the company because the vision and the optimism and the opportunity are there. I think we run a really tight ship. I think we have our priorities in the right place. I wouldn’t have joined if I didn’t think that.
Equally, there are huge opportunities for technological innovation across the industry – and I think National Grid is there as well. We have started pulling together these use cases, and how we marry technology through things like National Grid Ventures and our digital labs. We’re not just talking about it, we’re doing it.
Q What do you see as the biggest challenges?
I think the first-off challenge that we will never lie down is cyber-security. Also, the onset of new technologies – how do we understand and leverage them? Technology changes and is ubiquitous in every industry. Almost daily there are new technologies hitting the market, and everyone wants to talk to us about them.
Q How do you think the transformation work has gone so far?
Very well; I am fortunate enough to have a set of colleagues who recognise I’m very cautious and am making sure I learn the business, but who are very supportive in cultural change and in driving further. Our board asks about digital and what we want to do. So I’m very pleased.
We’ve got a great set of people that have been here for a long time who are actually helping with the understanding of what the journey’s been. And I’ve brought in some new leadership to help with outside-in thinking and making sure we end up with a very balanced team. That’s helped with the culture change of embracing the new technologies and thinking about the future and where we need to be – which the company’s always done – but with the base of how technology is really shaping these things.
Q How key has the team been?
The team is everything. I see that at every position I’ve gone to. No one person can do everything, and if they think can, they’re mistaken.
I spent a considerable amount of time in my first year ensuring that we formulated a great leadership team. I’ve added some new roles to that – data management is one, and a chief enterprise architect to lay out the enterprise architecture to match with the business architecture.
Q Is there an important lesson you’ve had at any point in your career about dealing with cultural transformation?
Yes – a very important lesson. You have to consciously think about moving at the speed of the business, especially if you come from outside the business. If you move too slowly you’re incompetent, incapable and not effective. If you move too quickly you’re not listening. Be very, very conscious of deciding which way you need to push… but don’t get over your skis.
And technology is different for every business. When I was in the tech industry, every three months there was something new. In the auto industry 24 months was the product development life cycle. In biotech it takes 12 to 15 years to bring a drug to market, so you have to literally understand the industry and the company you’re in to say “move fast, let’s go, let’s do”, whether it’s regulators or risk management. You really have to appreciate that and be very thoughtful.
Q What will success look like to you in a year’s time?
It would be a fully vetted digital strategy. Very strong use cases on where we are. And good delivery. It would be a greatly improved system, being able to execute to our plan and show that it has been executed.
It would be a team that is hungry and looking for what new technologies can bring to this industry. I hope to be able to say our teams know where we’re going, we’ve achieved our objectives, we’re cyber-safe – to the extent of what our cyber-security strategy has said (because we’re constantly on the move there) – and we’ve adopted more technology to be able to do more for our customers and consumers.
Q What would be your one piece of advice to other utility executives overseeing tech change and wanting to capitalise on it?
Try to think a little differently. Continue to try to drive improvements. Though it’s very real, don’t get tempered by the folklore of “what we used to be able to do”.
Really embrace the new technology, the opportunity to work with regulators on future vision. Because I’m seeing it on both sides of the Atlantic. The regulators are looking for the same thing we are – best cost, best efficiency, best customer experience. So don’t get bogged down, respect the history and learn from it, but really look to the future.
And look outside the industry, too. It’s so easy for any industry to say “we’re different”, and the truth is we are different. But there’s so much that we can glean from other industries. We should really take the opportunity to do that.
Download the complete issue of Flex in pdf format here:
Does the onset of digital technology mean a better deal for consumers?
By Nadine Buddoo
From self-service systems to chatbots, today’s consumer is faced with a world increasingly shaped by new technologies. But is digitalisation really improving customer experience, or will the pursuit of these disruptive technologies leave consumers disengaged?
For Michael Jary, managing director of smart energy start-up Verv, digitalisation is integral to the business and its customers. Verv is an intelligent home hub that allows users to control their energy usage and reduce their energy bills and carbon footprint. The system samples electricity consumption at up to a million times a second using an Internet of Things (IoT) box that clamps to the mains line and can be installed by the customer. Using machine learning, this box analyses the specific electrical signatures of the appliances in the home.
“From this, we can tell exactly which appliances are on, how much they’re consuming and in some instances whether they are about to break,” explains Jary. “With that information you can start to provide a really useful service to customers to help them reduce energy consumption, alert them if they’ve inadvertently left a device on, and enable the next step in smart grid development by promoting user-friendly demand-side response and dynamic pricing.”
The Verv concept was born out of a frustration with the challenges of smart meter uptake. “The key barrier to the smart meter rollout is the choice of technologies,” says Jary. “IHD [in-home display] is really 1990s technology. There’s so much more that can be done with energy data in far smarter ways.”
Jary insists that smart meter programming is an example of digitalisation done poorly. He laments that it’s not uncommon for customers to look at their IHD screen for a couple of weeks and then abandon it to the dark recesses of a kitchen drawer because it’s taking up a socket or valuable worktop space. “That choice of technology and that approach to digitalisation was wrong from the start,” he says.
It seems the IHD technology fails to speak to any specific customer segment: digitally enabled consumers generally want their data in real time on their mobile phone, while those who are less digitally inclined are unlikely to attempt to interpret complex data on an LCD screen. “There are better technologies, which can drive genuine, enduring consumption reduction and better engage customers,” he adds.
But while the energy sector focuses on how to unpick the challenges around the smart meter rollout, businesses risk falling behind and missing out on the opportunities that digitalisation offers.
Laura Sandys, chief executive of consultancy Challenging Ideas, agrees that utilities could miss a trick if they don’t start looking beyond the smart meter conundrum. The former Conservative MP believes energy businesses need to move quickly to adopt a very different approach to customer service and customer experience through digitalisation. And key to this change is harnessing the benefits of big data.
“Digitalisation isn’t the end point, it’s merely the mechanism,” explains Sandys. “Let’s say that the energy sector got totally digitalised, if they don’t know what to do with the data it’s a pointless exercise. It’s all about how that data, once it is made accessible, can be used by businesses in terms of opportunities.
“I think new business models will emerge as we get more data out there, and I think that will be transformative.”
But following a series of high profile data scandals and the introduction of the General Data Protection Regulation (GDPR) earlier this year, the misuse of data and the ensuing impact on consumer trust remains a key issue.
“There are examples of companies that have played fast and loose with customers’ data and they have and are being punished, and rightly so,” admits Jary. “However, I’m not of the view that customers can’t get value out of that data.
“If our customer’s washing machine was about to break we would know this because of the electronic signature given off by the appliance… It might be of value to that customer to be offered the opportunity to have a third party come and fix that washing machine before it breaks. However, if I was to take that data and bombard the customer with washing machine adverts, that wouldn’t be acceptable and you’d quickly lose customer trust. As long as the customer’s interest is at the heart, you can really do some amazing things.”
Ultimately, says Sandys, energy customers want lower bills, a reliable service and to feel that they are getting a fair deal: “As a sector, we are going to have to get reskilled in a very big way or we’ll find that the retail and consumer end is going to get taken over by a lot of people who really do understand consumers and can aggregate information about consumers in a very effective way through knowledge and data.”
The human touch
So, as more companies embrace digitalisation, AI-powered chatbots and self-service technologies will likely have the biggest impact on customer services. With this shift comes an obvious decrease in human interaction, but will this detachment lead to less empathy for the consumer? That really depends on the customers, insists Jary. “If you look at Amazon, the company has some of the highest customer service satisfaction scores in any industry and yet their interaction with consumers is almost exclusively digital,” he says.
“But it is true, and particularly for the energy industry, some customers will still want that human touch, but a growing proportion – if not the majority – appreciate and want really efficient interaction. They don’t want to spend 20 minutes on the phone waiting in a queue to get an issue resolved. Digitalisation is absolutely compatible with strong customer service, when it is done right.”
And getting it ‘right’ is the key. Creating a digital strategy that doesn’t alienate non-tech savvy customers, engages digital natives and simultaneously delivers a reliable and efficient service is the holy grail for all companies, not just utilities firms.
The challenge for energy suppliers might well involve the cannibalisation of profitability by exploring different business models at potentially lower margins. But the risks of not embracing digitalisation are even greater. This is no longer the stuff of sci-fi literature or future-gazing Ted Talks; the digital revolution is already upon us.
“[Utilities firms] are not going to get away with the sort of approach that we’ve had in the past,” says Sandys. “In every other area of a consumer’s life they are having a digital experience… and they are then faced with an energy sector that’s stuck in a totally old-fashioned world.”
By exploiting new technologies, the possibilities to improve customer experience are hugely exciting for an energy sector that has been criticised for its sluggish approach to digitalisation. Failing to do so will surely see new players entering the market and delivering the digital engagement that consumers are increasingly demanding.
Three ways technology is changing customer interaction
Machine learning capabilities, like those used by Verv, allow computer systems to use algorithms that learn from data, without being specifically programmed. Essentially, the more data it receives, the smarter the system becomes. “Our raison d’être is making the reduction of energy consumption easier for customers and taking the hard work away by using our machine learning capabilities,” says Verv’s managing director, Michael Jary. “With that kind of insight you can be far more helpful to customers.”
Retail giant Marks & Spencer recently unveiled plans to replace its call centre staff with AI software, and earlier this year Google announced its Duplex tool will schedule appointments and make dinner reservations for users. Businesses primarily switch to chatbots in a bid to reduce costs: unlike call centre staff, chatbots are available 24 hours a day without the need for pesky lunch or loo breaks.
Natural Language Processing (NLP)
This AI technology allows computers to understand language as it is spoken. One area where NLP can be particularly useful is sentiment analysis, allowing businesses to analyse text and computational linguistics to understand the drivers behind public opinion. Companies can delve into this data and strategically target the issues that are most important to customers.
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Are auto-switching sites the next big thing?
By Adam John
Auto-switching websites are becoming an increasingly common commodity, with several now in the UK market vying to get consumers a better deal on their energy bills.
Auto-switching is where customers sign up to a third-party site and have their tariffs automatically changed to the best deal, or deals, tailored for the customer, such as green energy tariffs, for example.
Recently, two entrepreneurs received the “best equity deal” in the 13-year history of the BBC show Dragons’ Den for their switching service Look After My Bills.
Look After My Bills is not the only energy auto-switching service on the market. Consumers have several options on the table, including Labrador, Flipper, Switchcraft and Switchd. Their financial model varies. Flipper charges a £25 annual membership fee, while Look After My Bills charges the energy company it switches the customer to.
But how do such websites work and how much impact will they have in changing switching behaviour?
Automated switching sites are generally based on software that uses algorithms– a process or set of rules that the computer is programmed to follow.
Ryan Thomson, a partner at Baringa Partners, explains: “The word algorithm is very open to interpretation; a simple maths equation could be considered an algorithm. Effectively what they [energy switching services] are doing is taking your current pricing and looking at your current consumption and they are automating the process of looking for what prices are on the market.”
However, some would claim to be more intelligent than that and consider wider factors such as exit fees and customer service ratings and are also more selective in terms of the energy retailers they look at.
Flipper, for example, uses its own savings algorithm, which examines several aspects of a tariff to calculate which is the best for a particular customer.
Andrew Mostert, Flipper’s digital marketing manager, explains: “We have our own savings algorithm, known as ‘Joules’, which doesn’t just look at the unit rates but also includes exit fees, switching times and the time left on the current deal in its calculation.”
Switchcraft founder Andrew Long says his site likes to emphasise its “tech credentials” and has developed its own auto-switching algorithm.
“Our system uses tariff data from a third-party application programming interface but the auto-switching algorithm is our own work.”
He explains how the auto-switch process works: “In advance of the end of their plan, the user gets three emails explaining what we are doing on their behalf and giving them plenty of time to cancel if they are not happy. We want the user to be completely in control even though we are organising things for them. Since we’ve been live for more than a year now, we can confirm that almost all customers are happy for us to process their repeat switches.
“Right now, the user gets switched to the cheapest deal respecting their preferences (just the cheapest with no other factors, green only, large suppliers only, fixed-price plans only, plans without exit fees). We are working on ways to make that decision in a more balanced way – for example, a user might be prepared to pay £20 more for a green plan but not £200. The decision is rarely as stark as that in practice, but you get the idea.
“The public is finally waking up to the scale of overcharging in the energy industry and we think that auto-switching is the solution.”
While each website promises it has the technology and algorithms to find customers a better deal, others remain to be convinced. One industry expert believes the current market needs to offer more in order to make the switching services live up to their potential.
Former Npower boss Paul Massara, now chief executive of blockchain company Electron, says there must be more product differentiation in the types of tariffs offered before switching sites can really take off.
He argues the paid-for services are offering only what consumers can do themselves and until there are more time-of-use tariffs, auto-switching sites are just choosing between standard and fixed tariffs.
“At the moment the only time-of-use tariffs that people are offering are Economy 7 or standard, so that’s really the only choice that they can make. So the question is, why would I sign up to a site to do that if you are only offering me those two options?
“Their time will come when there’s multiple time-of-use tariffs, when there are tariffs tailored much more to individuals. At the moment there isn’t a lot of that, so therefore the automatic switcher is really somebody who is just scanning the existing sites saying which one should you switch to. Why are you paying for that? I guess you’re paying for it if you’re too lazy to switch yourself.”
While the options are limited, the market does offer some time-of-use tariffs. Octopus Energy has launched a number of time-of-use tariffs.
Green Energy UK also launched a time-of-use tariff in January 2017.
Time to ring the changes
The clock is ticking for incumbent utility firms to embrace technology and change internal culture and mindset, says Neil Pennington.
There is a revolution taking place in the utility sector, driven by advances in technology and the recognition that customers increasingly expect products and services when and where they want them, and all at a low cost. In short, the future is decentralised, digital, on demand and straight to mobile.
This is well known to utility companies; they are not stupid. The issue is not recognising the need to change, but how to change, especially when business success to date has been based on doing exactly the same thing they have always done: sell commodity cheaply and provide traditional services.
The established retail business model of the separation of ‘core’ supply of commodity (electricity, gas or water) from ‘non-core’ services, such as energy services, metering and connections, has existed for 20 years (since competition in the late 1990s). In the same way, the traditional business model for networks, across gas, electricity and water, of being centralised, based on large assets, focused on reliability and interacting with people only in extremis has also dominated for the same period.
But these models have fundamental flaws when faced with the customer of the 21st century, such as the existence of separate models of customer service and separate IT/CRM systems; often with different internal cultures. Today’s customers no longer recognise the distinction between core and non-core, expecting their utility company to be responsive to all needs. If the traditional model gets in the way of this, then companies such as Amazon, Google, Facebook and Tesla will happily provide alternatives based on experience from outside the traditional sector.
As a result, utilities are facing a perfect storm that will disrupt everything: an informed and connected customer, combined with technological advances that are redefining business – from large centralised networks to autonomous connected local grids; from single utility offerings to cross-retail services. The Utility Week Live 2018 report on disruptive technologies identified ten that are reshaping utilities.
Artificial intelligence (AI)
Internet of Things (IoT)
Renewable energy advances
Water reuse technology
It would be easy to point to those technologies, especially blockchain, IoT and AI, and ask why large incumbents are not moving quickly to change. The difficult truth is that institutional mindset and internal culture get in the way; established processes, complex and expensive IT systems, demanding shareholders all act against speed and change.
That’s why a change in internal culture is needed. And now.
Large incumbents must:
Let go of industry mindset: we talk and think in terms of the ‘industry’ (energy, electricity, gas, water, utility) as if it exists in some homogenous form; people don’t care about industry, they care about relevance and what you can do for them.
Leave constraints until last: regulation, legislation, existing processes are often brought into play far too early and stifle an idea before it can be explored.
Place customer-led innovation at the heart of your business: if not, at best you will become irrelevant and a commodity; at worst, you will slowly go out of business.
At the heart of customer-led innovation there must be an internal mindset to act fast, fail fast and use customer insight as the fundamental basis of everything.
And this isn’t all off in the future at some point. Change is already occurring across the existing utility space.
In energy retail: Centrica has long been on a journey to change the retail model; the most notable poster child being its investment in and growth of Hive. But recognising the critical role of the decentralised smart grid, they are also now active in Cornwall in partnership with LO3 Energy, trialling ways blockchain technology could revolutionise the way consumers buy and sell energy.
Energy networks: Western Power Distribution, with a geographical footprint that has abundant wind and sun, has established an internal innovation unit that integrates well internally, catalyses change and engages regularly in open innovation with a wide range of external stakeholders.
Water: Northumbrian Water is leading the innovation agenda with initiatives such as the Innovation Festival, where some of the world’s leading businesses and most innovative minds gather to tackle major social and environmental challenges.
Government: with the announcement of the national Renewable Energy Scheme, RESS, the Irish government is placing community investment and benefit at the heart of the renewable low carbon energy future.
Technology start-ups such as Share & Charge, Solo Energy, Electron, Green Running and EWF in particular are pointing the way to the future. And scale-up new entrants are also at a distinct advantage. It’s easy for incumbent players to point to the advantage in cost structure, absence of specific regulatory requirements, ignoring the role played by culture and mindset. However, it is perhaps the creation of a different mindset that is allowing the likes of Bulb and Ovo Energy to deliver success in embracing innovative technology to engage customers in a different model, unencumbered by history, and with an absence of the ‘this is how we have always done things round here’ mindset.
So, as well as embracing technology and getting closer to the customer, perhaps the biggest and most difficult challenge for existing utility companies is one of changing internal culture and mindset. And there isn’t much time to change.
Failure to respond will likely mean an acceleration to commoditisation or severe business distress, with value migrating further to new entrants and household brands with wider value to customers: Tesla, Google, Apple, Amazon, John Lewis, Mercedes, to name the mere tip of the well-funded iceberg.
Dr Neil Pennington is working with a number of organisations, including Rivetz, DISC, Grid Singularity and the Energy Web Foundation, to develop blockchain and digital identity for use in micropayments, messaging and decentralised energy. He is former smart programme director and UK innovation director at RWE.
Expert view: The importance of culture in digital transformation
By Michael Wignall, CTO, Microsoft UK | @mdwigs
Technology doesn’t drive transformation, culture drives it. The end users – the people in your organisation – will be the ones who bring about digital transformation.
One of the biggest challenges organisations face is having the right internal structure and culture to effectively transform. For maximum impact, everyone from the boardroom to the field needs to be empowered.
Digital transformation is not just a technology project. It’s identifying the business outcomes you want to achieve and then looking at how technology can support that.
Businesses that use digital transformation to drive business change need people who are adaptable, flexible, keen to learn, and willing to collaborate on solving wider problems that are instrumental to their success.
Focus on connecting and empowering employees with the organisation’s goals. Successful businesses are open to sharing from all areas. Sometimes the best ideas come from the employees out in the field, seeing customer challenges first hand.
The organisations that work in silos and lack the tools that empower their employees are the ones that get left behind in digital transformation. Taking a holistic approach to your transformation and bringing your employees along the journey with you is key to success.
The first element of digital transformation is to ensure all employees are empowered to do the work they need to, at the right place and the right time. More employees than ever are working remotely, with half the UK workforce expected to be remote by 2020. This brings in new requirements for collaboration and security.
A large part of these remote workers are first-line or frontline workers. These employees often form the backbone of the utilities industry. They’re the ones engaging with customers, performing triage at the power stations, or maintaining day-to-day running of vital services.
To ensure employees are achieving their full potential, we need to ensure every single employee is connected. This is mostly about providing simple, secure technology for everyone to use. Organisations need to ensure frontline workers are getting all the benefits of digital transformation while staying secure.
Microsoft has had a long and strong history of being secure: one of the key tenets is providing the capability to ensure data is secure and protected – both at rest and in transit. We want to make sure technology is as seamless as possible and that the security is transparent to the end user. Importantly, this security is implemented across all devices and the cloud, so the protection is across all devices, whether it’s a PC in the office, a laptop in the field, or a mobile device on the train.
This means it’s easy for frontline workers to access the information and the tools they need right then and there, without putting your data at risk. They often need to collaborate with other people in the office or on other sites. Using these tools in the field means they get the work done when it matters. These people need to be productive collaborators, which is why it is vital for them to stay connected.
Wessex Water, for example, has 2,500 workers across the organisation. When an incident occurs, they instantly link the frontline worker straight to incident rooms via the Surface Hub, providing the right information at the right time and resulting in less downtime on services and more productive employees.
While we’re seeing an increase in voice and video for point-to-point contact to provide fast solutions, we’re also seeing Microsoft Teams being used to curate a library of information and chat history.
In the here and now, we’re looking at the Surface Go as a powerful device for the frontline worker, which gives the full rich experience of Microsoft collaborative tools in a super-portable and connected way to create a seamless employee experience.
Excitingly, in the future, I’m looking forward to seeing mixed reality such as the HoloLens being used to help frontline workers visualise, collaborate and be more confident while working. For example, if a piece of machinery went down, a technician can see through the eyes of the frontline worker to help guide the repair.
What’s most important, however, is frontline workers will continue to be connected with smarter, more flexible devices that allow them to be more productive in the field than ever.
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Expert view: Should collections departments be considering a ‘digital first’ approach?
Jon Hickman, chief executive, Flexys Solutions
As a society we have recently been described as “always on” and, according to the 2018 Deloitte Consumer Review Digital Predictions Report, “The smartphone is likely to become increasingly fundamental to how we operate on a day-to-day basis as it offers solutions for both our work and social lives.”
As a result, the opportunity to engage with consumers digitally when they have fallen behind on payments has an increasingly significant benefit. It provides customers with the space, time and information to make an informed offer of repayment, helps them avoid the significant embarrassment factor associated with discussing the issue and potentially leads to earlier debt resolution.
The inexorable move to digital across all generations
Ofcom reported in its 2018 Communications Market Report that people claimed to spend a total of one day a week online (24 hours) – more than twice as much as in 2011. And this is across a range of generations. Research by TouchPoints in 2017 found that among UK under-35s, more than 80 per cent agreed that the internet was an essential part of their lives, but the steepest increase was among over-65s, with 36 per cent considering the internet to be essential, up from 22 per cent five years previously.
A changing world
At the same time, the regulatory frameworks under which collections take place have changed. Driven by the Financial Conduct Authority, Ofwat, Ofgem and Ofcom, the emphasis has moved away from confrontational debt management to a more customer-focused, collaborative approach. In particular, any consumer vulnerability must be taken into account when resolving customer debt episodes.
Implementing a digital solution – the key to collections success
Adapting quickly to this new digital world is critical for any utility business. Implementing a well-designed digital solution, built by collections specialists and harnessing new technology such as machine learning, can deliver impressive results:
Increased customer retention and loyalty due to a more collaborative approach to debt resolution.
Reduction in days outstanding through faster debt resolution.
An enhanced reputation for the business through earlier identification of vulnerable customers and providing immediate access to skilled collections agents.
Reduced cost to collect as a result of ‘self-service’ digital engagement.
A digital first approach gives collections teams the opportunity to resolve debt episodes and collect outstanding arrears in the most cost-effective way.
Five key questions to consider when shortlisting solution providers:
1 Transparency – can the vendor show you exactly what is “under the hood” of their solution?
2 How easy is it to implement it as part of your existing infrastructure?
3 Does the vendor truly understand the intricacies of collections and the frustrations your team experience?
4 Can they provide real world business examples to highlight understanding and best practice use of Machine Learning and user experience design?
5 Can they demonstrate continued investment in pure research and development in new and emerging technologies and their use in collections?
To find out more about the areas covered in this article or to discuss the Flexys Intelligent Debt Resolution solution contact us on 0117 428 5741 or email: firstname.lastname@example.org
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Operation & Assets
16 apps that will change the way you do business forever
By Alice Cooke
Utility companies are faced with steeply rising costs and the need to be more efficient with the resources they have. This ongoing effort to upgrade and modernise infrastructure and improve services drives the need for new technologies that streamline processes and enhance productivity, and that’s where mobile applications – or apps – come in.
From safety inspections to backflow device test reports, utilities and energy apps can help get tasks done faster and more accurately, all through mobile devices. They can also allow the workforce to share and react to information in real time, taking back control of your work day and increasing your productivity, not to mention sparing a fair few trees along the way.
Here, we look at 16 apps that are new to the market and look set to change the industry.
Utileyes from Northumbrian Water
This allows technicians from Northumbrian Water Group to remotely view potential problems inside customers’ homes and beyond, and was recently named Customer Service Initiative of the Year at the 2018 Water Industry Awards. Launched in July 2017, it has since virtually validated more than 400 leaks.
Mobile Worker from iTouch Vision
The Mobile Worker app means utilities workers can receive their work orders to their phones as well as an inspection visits schedule. They can then use the app to auto-route the task, update the status of the request, log meter readings and co-ordinate with back-office executives.
It also includes safety features such as a check-in button to notify colleagues of their whereabouts and wellbeing. An offline synchronisation feature integrates information and stores it locally, even without network availability.
dNet from i2O
Set to launch this winter, dNet enables water utilities to place accurate, reliable and affordable i2O loggers at points of interest in the network, then configure them, view and analyse data from their entire logger estate.
Joel Hagan, CEO of i2O told Flex: “A phone is cheaper, easier and quicker to use than a ruggedised laptop. We work tirelessly to improve the cost effectiveness of our solutions.”
Vehicle Check-Out from Lanes Group
This new app is being used by drivers to carry out and digitally record daily vehicle safety checks, and is designed to improve the effectiveness of wastewater fleet management.
The Vehicle Check-Out app allows drivers to complete the mandatory checks quickly and effectively, and report defects in a way that is fully compliant with latest vehicle inspection legislation. Lanes Utilities, part of Lanes Group plc, is using the app to manage 350 specialist vehicles operated to fulfil its role as Thames Water’s wastewater network services maintenance partner.
Andy Brierley, Lanes Utilities’ director, says: “The Vehicle Check-Out app has been transformational for us as an organisation that operates a fleet of vehicles, many of them HGVs.”
Field Squared from Field Squared
This app claims to take the guesswork out of scheduling by enabling effective work order management and asset visibility. It allows technicians to capture field data via digital smart forms, and ensures everyone has the most up-to-date information, all in real time.
Its field data capture elements include space to upload photos, as well as mark-up and barcode scanning functions.
Crew Tracker from iRestore
This is a tracking and location forecasting solution that estimates times of arrival to tasks in the field, and then tracks and manages outside contractor crews and mutual aid crews, so that everyone knows where the whole team is all the time.
Responding crews or crew foremen download the app, pick the utility they are responding to, and then touch a single button (Start Job). This turns on location tracking and enables utility users to view colour-coded crews and/or crew foremen as they make their way to their assigned work centre.
Electrical Certificates, Inspection & Testing from iCertifi
This is a range of apps rather than a single one, because electrical certificates come in many shapes and forms, and one app cannot fit all, but they each make the job of testing, inspection and certification faster and easier, with less room for error. Once subscribed, electrical contractors are free to send unlimited electrical certificates, with no pay-and-go pricing or paying for certificate references. The company recently developed a version of iCertifi for Network Rail, which is now used across the UK for electrical certification of the UK’s railway infrastructure.
Planning and Scheduling Optimisation from IFS
Being successful in field service means sending the right technician to the right job with the right parts – and doing it at the lowest total cost possible. At the heart of this app is the Dynamic Scheduling Engine. This automates scheduling decisions based on configurable and reconfigurable business requirements. It also offers ‘what-if’ analyses of how business, volume and staffing changes could affect the ability to deliver on customer requirements.
Resolver from Resolver
This is a complaints app that allows your customers to say exactly what they want to you in the correct format, through an app. It explains their legal rights to them, helps them word an email, and creates a case file so the complaint can be instantly logged and tracked, so they can see progress and responses in real time. Although it wasn’t designed specifically with utilities in mind, both GB Energy and OVO have recently started using Resolver.
Powershop from Powershop
This is an innovative approach to selling energy, which sees customers purchase ‘powerpacks’ of energy credit via an online shop. First marketed in New Zealand, it is now set to become available in the UK, having signed a franchising agreement with Npower earlier this year.
Having purchased the powerpacks, customers use online tools or a mobile app to track consumption against their credit. There are pricing incentives for paying upfront for energy, but unlike a traditional prepaid plan, customers aren’t disconnected if their usage exceeds the credit they’ve purchased; instead, they pay for any excess consumption at the end of the month using a default payment method. In New Zealand and Australia, Powershop has around 110,000 customers and reports high levels of customer satisfaction.
EcoStruxure Field Device Expert from Schneider Logistics
Designed to improve how engineers commission, configure and maintain field devices throughout the life cycle of the plant, Field Device Expert’s Intelligent Commissioning Wizard completely automates detection, configuration, commissioning and testing of HART field instrumentation connected to an EcoStruxure Foxboro distributed control system.
A Schneider spokesperson tells Flex: “Automatic binding and configuration of HART devices has been shown to reduce commissioning schedules by more than 75 per cent, leading to faster time to profit, and that’s exactly why this app is so important.”
FieldEZ Pro from FieldEZ
Better asset management, scheduling, planning, dispatch and job closure are some of the key benefits of this app, according to FieldEZ. GPS and traffic updates enable better route planning and management tools, while remote access to the range of available spare or replacement parts save time and money. The stock and chat options are designed to minimise errors and make for greater time management and efficiency.
Service Request Manager from iTouch Vision
The app is designed to manage incoming service requests for inspections, leak repairs, maintenance, installations and any other issues that need to be fixed at the customer location.
The service desk element then allows for optimised smart scheduling; despatching tickets, task allocation as per worker’s availability and expertise, SLA management, dynamic scheduling, designing e-forms and automated workflows to trigger actions to match business processes.
The latest virtual and augmented reality systems can help streamline the design of facilities and equipment, de-risk staff training and enhance operations in the field.
By Stephen Cousins
A wave of innovation in virtual, augmented and mixed reality has opened the door for energy and utilities firms to become pioneers in immersive digital technology.
The widespread availability of more affordable hardware – a result of rising consumer interest in gaming, coupled with growing industry awareness of potential end-use applications in design, operations, training and other departments – has driven the rollout of various trials and real-world deployments.
Designers are exploring the potential of virtual reality (VR), which is able to place project stakeholders into a photo-realistic simulation of a proposed scheme, or enable engineers to test the usability and ergonomics of prototype equipment.
The technology is also becoming a valuable training tool to test out potentially hazardous scenarios without the danger of injury or the need to temporarily close down operations. The ability to plug employees into VR is typically much cheaper than ferrying them to remote training sites.
“Up and down the utility value chain, people are looking at digital tech as a turbocharger for productivity and VR is already getting real-world applications, particularly for training, with a positive return on investment on deployments,” says Jason Glickman, leader of the Americas Utilities and Renewables practice at US consultancy Bain.
According to forecasts from market analyst ABI Research, energy and utilities will account for 17 per cent of global AR headset shipments in 2018 and the market is expected to reach US$18 billion by 2022.
The technology, which overlays context-specific data (and in the case of mixed reality, holograms) onto the user’s regular view of the world, is able to enhance the capabilities of technicians in the field.
Imagine the scenario of a lineman responding to an outage. Wearing a mixed reality headset such as HoloLens, which provides a form of augmented reality that overlays virtual 3D objects, or holograms, onto the user’s view of the world or when holding a tablet, they need simply look at (or point the tablet camera at) damaged equipment to gain access to important data such as the asset type, product number or maintenance history. This makes it simpler to troubleshoot the problem and order replacement parts.
The technology can also make the unseen seen, says Leila Martine, product director, commercial mixed reality at Microsoft: “There are great examples of how HoloLens enables the discovery of GIS [geographical information systems] and CAD data, so users see things that aren’t immediately discoverable, such as hidden pipes and networks, along with data from the Internet of Things and other data to give them additional context.”
Headsets like HoloLens can provide trainee field technicians with real-time access to remote experts to assist with diagnosis, or render an annotated image or video stream to the headset visor. This can serve as a form of on-the-job training and cuts the cost associated with transporting expert staff to the job site.
Utilities giant Dubai Electricity and Water Authority (DEWA) has adopted Microsoft HoloLens to visualise its Smart Power Plant, provide an interactive 3D model for the plant’s equipment, and offer remote expert assistance, including access to maintenance job cards, equipment, training manuals and other operating procedures. HoloLens will allow DEWA to obtain virtual estimations related to the remote maintenance of the power plant.
Microsoft runs a Mixed Reality Partner Program, which includes more than 150 partners – companies developing industry-specific or company-specific applications. One of interest to utility companies is vGIS, whose product vGIS Utilities provides the ability to ‘see’ through the ground to simplify utility locations and assess hidden infrastructure. In another development, Trimble has worked with Microsoft to integrate the HoloLens holographic computer with an industry-standard hard hat.
Irrespective of the application, skills transfer is seen as one of the big winners. Utilities are expected to lose roughly half their workforce over the next 10 years as older employees retire, taking with them a wealth of specialised knowledge and skills.
These new technologies provide an opportunity to plug the gap by digitally enhancing the capabilities of less experienced or new staff.
“We hear often from our utilities companies that they have an ageing workforce with a lot of expertise. At the other end of the spectrum, you have the utilities companies having a challenge to recruit and maintain young talent. HoloLens is really a great use of both a way to do knowledge transfer, but also to give modern tools for a modern workforce,” says Martine.
Metawater, a leading Japanese provider of repair and maintenance services for water and sewage infrastructure, has seen the benefits of using augmented reality technology to help transfer the skills of ageing employees to new recruits (see box).
That said, VR and AR systems are still nascent and may not be suitable for every situation or application. VR headsets tend to be quite large and need to be tethered to a powerful PC and the ability to collaborate with colleagues in virtual environments is unproven. AR is at present unable to map and tag all the complexity associated with legacy electricity grids, gas or water networks, which comprise multiple ‘sedimentary’ layers of assets built up over decades.
“A transformer on a pole at one intersection may be totally different from one a block away. Multiply that by thousands of miles of circuits in any given territory and the number of contextual permutations is huge,” says Glickman. “We are still in the early stages of assembling the right datasets and algorithms to be able to interpret the context and provide the right cues for AR. Machine learning may be able to resolve this in future.”
So, what is the difference between virtual, augmented and mixed reality?
Virtual reality (VR) aims to completely immerse the user in a simulation, viewed through a headset, such as Oculus Rift, HTC Vive, or Gear VR. The headset display is stereoscopic and the eye adjusts to it to create a 3D image, it tracks where you look and reflects that movement in the virtual world.
Augmented reality (AR) is any type of computer-based system that overlays data on top of the user’s current view of the world, while still allowing them to see the world. AR is therefore more suitable for use in day-to-day work, providing the user with context-specific information to enhance their understanding of
Mixed reality is a form of augmented reality that is somewhere between VR and AR and is the merging of real and virtual worlds to produce new environments and visualisations where physical and digital objects co-exist and interact in real time.
So, for example, wearing a mixed reality headset, virtual 3D objects, or holograms, are projected onto the user’s view of the world. Objects are locked into position and look as if they are part of the real world. For instance, a 3D model of a building projected onto a table top will remain static as the user walks around it. Microsoft HoloLens, Magic Leap and Meta 2 headsets all aim to convey this form of augmented reality.
AR helps Metawater transfer skills to new recruits
AR technology is attracting a new generation
Metawater, a leading Japanese provider of repair and maintenance services for water and sewerage infrastructure, turned to augmented reality to improve efficiency and transfer the skills and experience in water facility repair and maintenance of the engineers approaching retirement.
“Working with Fujitsu, Metawater began placing augmented reality markers and tags on the infrastructure assets being visited by engineers,” explains Graeme Wright, CTO manufacturing, utilities and services, Fujitsu UK & Ireland.
“Engineers predominantly use the technology; wearing a pair of augmented reality glasses and a tablet, they can check the state of different components without the need for in-depth knowledge, because the system stores a repository of images from different malfunctions. As a result, it can detect any issues, thus dispensing with the use of technical handbooks.
“These tags can be recognised by the tablet’s camera and subsequently trigger asset and operational information to be displayed on the screen. With the tags in place, it became possible to attribute different data to those assets: from information recorded at previous inspections, to sound recordings of what a healthy pipe should sound like, or on-screen repair instructions that can be overlaid in real time and used by a more experienced engineer to walk trainees through a fix process without having to be there in person.
“The benefits of using tech technologies in the field are three-fold. It speeds up monitoring and controlling activities; reduces field activities costs thanks to the possibility of employing less-specialised labour; and improves the decision-making process through faster interventions. It also makes the work more attractive to the next-generation workforce and in passing on knowledge from one generation to the next.”
Baker Hughes reduces operational downtime
The US firm’s Smart Helmet brings expertise closer to the field
An augmented reality helmet has enabled oil and gas company Baker Hughes to cut operational downtime associated with maintenance activities by up to half, as well as reduce the need to send its engineers across the globe to troubleshoot problems.
The Smart Helmet is an adapted hard hat fitted with high-definition cameras that project images onto a visor to enable the wearer to view documents, videos or illustrations needed to complete tasks. Integrated headphones and a microphone allow for two-way audio communication with technical support teams.
Baker Hughes, a General Electric subsidiary, wrote its own software for the system and co-created the hardware with Italian developer VRMedia.
The device was developed to bring expertise closer to local field service engineers in a way that would fit with the logistic constraints they have to operate in. Lorenzo Tanganelli, chief information officer for Turbomachinery Services at Baker Hughes, told Flex: “We needed something hands-free and capable of working in harsh and noisy environments without putting the safety of our people at risk. By augmenting a traditional safety helmet, there were no big cultural challenges associated with the adoption process.”
The device proved its worth during upgrade work on an outdated Baker Hughes turbine at a petrochemical plant in Johor Bahru, Malaysia. Under normal circumstances, part replacements would halt operations at the facility for at least ten days and cost around US$50,000 to fly in specialists 9,000 miles from the US. Using Smart Helmet, it took just five days and air travel was eliminated by using a single on-site technician, who was monitored and coached remotely, through the helmet, by engineers at a Baker Hughes site in Pomona, California.
The system is also underpinning a transition of the workforce, says Tanganelli, by enabling fewer senior engineers to execute a complex outage with remote expert support, or a fresher in a technician role expand their experience in a controlled way.
Yorkshire Water cuts development costs
The water company’s use of VR has paid dividends
A virtual reality system implemented by Yorkshire Water in collaboration with the University of Sheffield has resulted in £180,000 of direct cost savings and better-quality designs.
The university’s Advanced Manufacturing Research Centre (AMRC) developed the custom VR software, experienced via HTC Vive headsets, to enable engineers at the water company to prototype new equipment and test plans for treatment works in immersive 3D.
“Traditionally when we design a new asset we asked a manufacturer to build a prototype, which can cost anywhere between £50,000 and £100,000,” says Steve Wright, standard product and solutions manager at Yorkshire Water. “The creation of ‘digital twins’ of proposed products in VR is comparatively cheaper and enables us to interrogate designs more closely.”
Rigorously testing in a virtual environment helps the company improve construction accuracy and underpins a drive to manufacture more equipment off site.
At a macro level, the team created detailed VR models of Irton water treatment works in Scarborough, which is undergoing a £17.5 million upgrade, and Knostrop waste water treatment works in Leeds, based on 3D models supplied by the main contractors.
The system enables engineers to visualise different design options and detect clashes, while facility operators and maintenance engineers can check access requirements and the orientation and height of valves or other equipment.
“It’s all very well using 2D design drawings, but when you are stood virtually in a space you can actually check the physical dimensions. The HTC Vive is set to the specific users’ height and your arms are visible in 3D in front of you; you are essentially present in the space,” says Wright. “The beauty of VR is almost anyone can interact with an environment, you don’t have to be a technical person, which takes collaboration to a whole new level – people from across the entire company can get involved.”
AMRC was established to bridge the gap between advanced manufacturing technologies and end users in business. Its industrial clients include giants such as Boeing, Rolls-Royce, BAE Systems and Airbus.
A professional designer and a gamer were assigned to the project, whom Yorkshire Water challenged to develop the system to enable multiple users to collaborate and communicate inside the same VR model.
“We just completed a demo with two people inside a model who were able to see each other, as 3D avatars, and talk to each other, which we understand is a first for the construction and water sectors,” says Wright.
The culmination of the project will be the launch of a VR suite with dedicated computers and a high-definition screen, where engineers will import Inventor, Revit and Navisworks models into VR and explore and interrogate them on a daily basis.
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Water companies go into space to detect leaks
By Loise Vallely
What’s the issue?
For the water sector, leakage is a huge problem.
Targets are getting tougher, and this means companies are having to come up with ever more innovative ways to tackle leaks on their network. Some have started to use space technology such as satellites, which have the potential to double the number of leaks detected on the network compared with traditional methods.
Water regulator Ofwat has taken a tough line on leakage as part of the current price review PR19, challenging the sector to reduce it by 15 per cent by 2025, and says it will take tough action against companies that do not meet their leakage commitments.
Water companies have to maintain thousands of kilometres of water mains every day. However, leaks are often hard to find, especially on trunk mains – the large pipes that run through rural areas where the terrain and geography are a challenge. And in city centres, tackling leakages is both expensive and disruptive for the public.
Companies use a variety of different methods for detecting leaks, including sniffer dogs, divining rods, and leakage inspectors on foot. However, all these methods are time-consuming and can be inefficient.
As leakage targets get increasingly tougher, water companies need processes that are as streamlined and cost-effective as possible.
What’s the solution?
Firms including Yorkshire Water, Northumbrian Water, Thames Water and United Utilities have started looking at how satellites could help streamline the process of leak detection, teaming up with Israeli satellite company Utilis, and solutions firm Suez UK, to do so.
The satellites capture detailed images that cover 3,500km2. These pictures are then cross-referenced with maps of pipes and other aerial images, before teams are given an exact location to investigate.
The process happens quickly with no impact on customers or the public. It could result in problematic leaks in some of the most remote areas of the region being fixed and water being saved more quickly than ever before.
Northumbrian Water network performance technical specialist Joseph Butterfield says the new technology is “extremely exciting” and opens up a whole world of leakage detection benefits. “The sheer speed of the process, the detail it gives and the distances the images cover is fantastic and should really help us improve our performance around finding and fixing leaks and saving water,” he says.
What have water companies found?
Yorkshire Water has completed stage one of its £300,000 satellite leak detection trial, which has been “hugely successful”. The project helped the leakage team covering Huddersfield and Dewsbury find double the number of leaks compared with traditional methods been used. This, in turn, saved 0.5 megalitres of water a day. The firm is now moving into the second phase of the trial, which will focus on trunk mains in rural Yorkshire.
Severn Trent carried out an initial trial with the satellite around Birmingham, Coventry, Worcester and Gloucester, from which it took away numerous learnings for a second trial in Staffordshire and Nottinghamshire. The company managed to double its leakage hit rate and, in fact, if you take the number of leaks found per satellite point, its hit rate increased to 75 per cent. Hit rate is the number of satellite points the company investigated where it found at least one leak as a percentage of the total.
During the hot weather experienced by the UK recently, the company was able to take a high-res satellite photo of the region and pick out green patches in areas above its pipes, which suggested it had a leak issue in that area. This allowed the company to focus its teams on areas it might not otherwise have spotted.
Although it is still early days, water companies see a role for the technology. Yorkshire Water says it wants satellites to help it meet a leakage reduction target of 40 per cent over the next seven years. It also says it is working with other water companies, discussing how the industry can make the most of the technology.
Meanwhile Severn Trent’s head of innovation Dr Bob Stear said at the time the company announced its trial in November last year that the technology was promising. “We can see clearly the value that this level of geospatial data insight can deliver, and we fully expect to be able to improve our costs and efficiency by making better informed decisions when finding and fixing leaks.”