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Energy to grow: where the big grid players can lift SMEs

The UK’s Distribution Network Operators (DNOs) look after thousands of miles of underground cables and overhead power lines. Every day they power millions of homes and businesses. Day to day life at our DNOs is busy, challenging and rooted in tried and tested methods that they know will restore power or prevent loss. Even for those working in the wider energy industry, contact with DNOs is often limited to engineering-led power restoration or the process of getting a new property connected to the network.

Innovation and entrepreneurship are not always the words that spring to mind when thinking of critical infrastructure firms. But, hard at work in these larger regulated players, innovation teams are unearthing and supporting small and medium sized enterprise (SME) inventions that can shake up the industry. Northern Powergrid’s Innovation Project Manager, Andrew Webster shares why innovation is so critical and explains how networks can help SMEs and inventors on their journey to market readiness.

Ingrained innovation

DNOs are preparing for transformation from relatively passive electricity distribution businesses to active, flexible and agile Distribution System Operators (DSOs) – capable of the kind of network management needed to integrate more renewables and prepare for increased electrification of transport. This change means that DNOs across the country are looking for new and innovative ways to deliver more for customers, while ensuring robust cost control for network management. 

The drive to deliver ‘more for less’ through bold innovations is backed up by regulation under the RIIO (Revenue = Incentives + Innovation + Outputs) price control. RIIO actively incentivises network operators to look up from the day job and focus on long term innovation ideas that will reduce network costs and improve service for future customers. This incentive looks set to continue. The current price control (RIIO-ED1) ends in 2023 and its RIIO-2 successor is muted to build on the positives for RIIO-1 when it comes to innovation.

See also: 

Northern Powergrid launches app encouraging customers to save energy 

Northern Powergrid announces £83mn programme to make the North a low-carbon leader 

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More than one road to reward

For SMEs and inventors this is great news. It means for those with savvy ideas that could save network costs, DNOs will still enjoy a regulatory environment that allows them to spend time proactively seeking and managing long term innovation projects.

With direct and indirect (i.e. via broker organisations such as the Energy Innovation Centre (EIC) and Innovate UK) investment routes available, dynamic innovators can be in line for a plethora of benefits when working with forward thinking DNOs.

Cash flow is one of the biggest challenges facing an SME in the engineering and manufacturing arena. Space and equipment can be expensive – even just to create an early stage prototype. Involvement in a DNO programme can ensure the cash flow is there to support the development of a product or idea as it makes its way through the Technology Readiness Levels (TRL).

Field testing and in-depth knowledge of how a concept will perform in the real world is another significant barrier. Access to hundreds of experienced engineers and project managers via the DNO workforce can be invaluable for emerging ideas. 

Similarly, professional future funding and legal advice can be a huge support with safe knowledge that as DNOs cannot own IP, an SME’s great ideas are not only supporting real world network improvements but also protected for their own use and business growth. In fact, the EIC has its own legal department to further support inventors it matches with DNO projects. 

 

Come out of your sheds

From direct programmes to those funded via the EIC, InnovateUK, and bodies such as the National Infrastructure Commission (NIC) there are many routes to DNO support. Working in partnership with DNOs to find innovative ways to improve the electricity networks brings a wealth of financial and technological support – making such partnerships win-win for both SME and operator.  DNOs’ message for those with ideas is clear: “Come out of your sheds and workshops and let’s grow ideas together.”

 

SME success stories

Many great businesses have hit significant development milestones working with Northern Powergrid’s innovation team.

GenGame is a spin out from two small engineering consultancies, with a vision of using gamification to support domestic demand side response (DSR). Following a three-year trial with Northern Powergrid as part of the “Activating Community Engagement” (ACE) project, GenGame have a flagship reference. The company now employs eight staff along with a number of part time freelancers as a fully established business, managing five projects with customers including a French energy efficiency company, a UK disaggregation start-up and an IoT hardware provider as well as being a partner on a UK/Korea/Thailand Smart Grid trial. In addition, the lessons from ACE are now being used in a follow-up project, “GenDrive” with Northern Powergrid teaming up with Ecotricity, Gengame, EnAppSys and Newcastle University to explore how gamification can motivate electric car drivers to use their vehicles to support the UK energy grid.

Pollywood is a great British innovation that has the chance to change the face of construction. The new material has a greater strength to weight ratio than steel and could be used as a replacement for existing solid wood electricity poles as they are currently coated with soon to be banned creosote, because it is a health hazard. Pollywood Poles will be made to order, dramatically reducing long lead times for existing poles and the space-consuming stockholdings of DNOs: increasing their ability to respond flexibly to serious weather events. The material, which can be used alternative to metal or plastics, has gone from inception to TRL 3 with Northern Powergrid’s support and is now the subject of an industry-wide funding call.

 

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