The new energy consumer - Shifting expectations - Also this issue: Energy and Utilities Alliance

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The new energy consumer - Shifting expectations - Also this issue: Energy and Utilities Alliance
I S S U E 1 9      W I N T E R   1 8 / 1 9

 The new
 energy consumer
 Shifting expectations

Also
this issue:
• Events round-up
• Hydrogen for Heat
• The first MEHNA News                        www.eua.org.uk
The new energy consumer - Shifting expectations - Also this issue: Energy and Utilities Alliance
W E L C O M E

                                                                                                                     Welcome
                                                                                                                                    T
                                                                                                                                             he Department for Business, Energy & Industrial Strategy is exploring low carbon technologies to support heat decarbonisation. This issue we
                                                                                                                                             update on the Hy4Heat project which is looking at whether replacing natural gas with hydrogen for domestic heating and cooking is feasible

                      Events
                                                                                                                                             and could provide a plausible pathway to help meet decarbonisation targets. You can also read about EUA’s Second Low Carbon Gas
                                                                                                                                            Consultative Forum which focused on UK hydrogen projects.

                                                                                                                               Our Winter seminar, Gas 2018, examined the future of heat, identifying that over the coming years the energy sector will go through a huge period of transition
                                                                                                                               and disruption. However as the event report concludes, it was clear from presentations on the day that gas is expected to play a vital role in the drive towards a
                                                                                                                               decarbonised energy future.

                                                                                                                               A new division of EUA, Manufacturers of Equipment of Heat Networks Association (MEHNA) has been established, specifically to support and promote best
                                                                                                                               practice in the design and operation of heat networks. The group gives a shared voice for the heat networks sector and the move has been welcomed by
                                                                                                                               BEIS, with the group already working with the Heat Network Delivery Unit and Metering and Billing. We look forward to reporting more on the
                                                                                                                               development of this group in forthcoming issues.

                                                                                                                                                             The main feature this issue looks at a series of consumer research being carried out by consultancy Accenture. Their
                                                                                                                                                               New Energy Consumer research looks at emerging trends with a view to identifying new opportunities and
                                                                                                                                                                 challenges for the marketplace. They suggest that as much as changes in the sector are being driven by rapid
                                                                                                                                                                  energy transition and decarbonisation, consumers experience in other sectors such as retail, travel and
                                                                                                                                                                   media is impacting just as significantly. Consumer attitudes are evolving and their approach to energy
                                                                       ICOM                                                                                        is changing because of new tools at their disposal. It is an interesting angle and certainly has long
                                                                                                                                                                    reaching implications for the large energy suppliers and the energy sector as a whole.

                                                                                                                                                                     Our Leading Voice this issue is Liv Hovem, CEO of DNV GL - Oil & Gas. Their recent
March 7      AMPS Conference                                                                                                                                         Energy Transition Outlook shows major implications for all industries and she shares
                                                                                                                                                                     some of the key emerging trends and how this will impact the gas industry.
             One Great George Street, London
                                                                                                                                                                     Hope you enjoy this issue.

Mar 21       HHIC Annual Lunch                                                                                                                                                                                  Caroline Haine,

             The Brewery, London
                                                                                                                                                                                                                Editor, OUTPUT
                                                                                                                                                                                                                                                          Regulars
May 15       EUA & IGEM Gas Industry Awards                                                                                    Contents                                                                                                          4        Utility Networks News
             Hilton Park Lane, London
                                                                                                                                                                                                                                                          HHIC News
                                                                                                                                                                                                                                                 6        Hydrogen for Heat
June 4       ICOM Annual Lunch
             Royal Air Force Club, London                EUA President
                                                         Elaine Lancaster
                                                                                                                                Features                                                                                                         9        HWA News
                                                         (Groupe Atlantic - UK & ROI Division)
                                                                                                                                Events Round-up
June tbc     Utility Connections                         EUA Vice President/Treasurer                                           Gas 2018                                                                                                       10         ICOM News
                                                         Helen Bray (SGN)
             Midlands
                                                         Chief Executive
                                                         Mike Foster
                                                                                                                                 15                                                                                                            11         NGVN News
w/c Sep 9 Smart Metering Update                          HHIC Director
                                                         Stewart Clements                                                                                                                                               16                     12         President’s Column
          Midlands
                                                         ICOM Director
                                                         Ross Anderson                                                                                                                           The new energy
w/c Nov 4 Gas 2019                                       …………………......……...…........                                                                                                                   consumer                                13         MEHNA News
                                                         Editor/enquiries                                                                                                                  Shifting expectations
                                                         Caroline Haine caroline@eua.org.uk                                                                                                                                                               Leading Voice
For information on attending, speaking, sponsoring or    Energy and Utilities Alliance (EUA)
                                                                                                                                                                                                                                               20         Liv Hovem
                                                                                                                                                                                                                                                          CEO of DNV GL – Oil & Gas
                                                         Camden House, Warwick Road
exhibiting at any of the above events, please contact:
Natalie Burrows e:natalie@eua.org.uk or t:01926 513741
                                                         Kenilworth, Warwickshire CV8 1TH
                                                                                                                                                                                                                                               23          Member List
                                                         A company limited by guarantee and registered in England.
                                                         Company Number: 10461234

 2                                                                                                                                                                                                                                                                                          3
                                                         Design and Publishing: www.mhgraphics.net
The new energy consumer - Shifting expectations - Also this issue: Energy and Utilities Alliance
U T I L I T Y                     N E T W O R K S                          N E W S

      Utility                                                  gineering & Equi
                                                                               pm                                                              Smart                                          Terry Jefferson joins the
                                                                                                                                               update                                         Utility Networks Team

                                                           n

                                                                                                         en
      Networks

                                                  Network E
                                                                                                                                                                                               E

                                                                                                           t Gr
                                                                                                                                                                                                       UA welcomed Terry Jefferson to the team in

      News                                                                                                                                     Terry Jefferson,
                                                                                                                                                                                                        September. Terry takes on the role of
                                                                                                                                                                                                       Technical Services Manager for the Metering

                                                                                                               oup
                                                                                                                                                                                                      Technology, Metering Services and Smart

                                                                                        g                           o
                                                                                                                                               Technical Services Manager                     Connected Homes Groups.

                                                                                      in                                                           I
                                                                                                                                                            t is encouraging to report that
                                                                                                                                                             the Smart Metering
                                                                                                                                                             Programme for SMETS2 really
                                                                                                                                                                                              Terry has been in the energy and utility industry for all of
                                                                                                                                                                                              his career, starting life as a Gas Engineer with ‘The Gas

                                                                                                                       ur
                                                                                                                                                                                              Board’ and continued with many diverse roles including

                                                                  Shap
                                                                                                                                                           is starting to move forward        Metering Services, UAT Test Manager to Applications
                                                                                                                                                      with reasonable volumes of devices
                                                                                                  NEEG                                         being installed across the country (latest
                                                                                                                                                                                              Support Manager, Service Delivery Manager for Gas Distribution and Test

                                                                                                                          future
                                                                                                                                                                                              Assurance Manager for Gas Distributions Front Office Replacement programme for
                                                                                                                                               figures from BEIS stand at over 250,000).      National Grid. After National Grid, he worked on the Smart Programme for Npower.
                                                                                                                                               The end date for SMETS1 and Advanced
                                                                                                                                               Meter installations has now been
                                                                                                                                               confirmed via BEIS. For credit meters this     Hy4Heat Work Package 10 –
                                                                                                                                               ended on the 5 Dec 2018 and for
                                                                                                                                               prepayment it will be the 15 March 2019.       Hydrogen Meters
                                                                                                                                               The DCC has also uplifted their systems
                                                                                                                                                                                              Terry attended the launch meeting of Hy4Heat WP10 in December 2018.
                                                                                                                                               on to Release 2 in preparation for Dual
                                                                                                                                               Band Comms hubs (868 GHz).                     Hy4heat is a programme being carried out by the Department for Business, Energy
Peter Day, NEEG Manager                                                                                                                                                                       & Industrial Strategy (BEIS) to explore whether replacing natural gas (methane) with
                                                                                                                                               Over the past couple of months EUA has         hydrogen for domestic heating and cooking is feasible and could be part of a
                                                                                                                                               been working hard to expand the                plausible potential pathway to help meet heat decarbonisation targets. Work
                                                                                                                                               influence and coverage of its Metering         Package 10 requires safe and functional hydrogen meters to be designed and
         he NEEG November                      Caroline Ayres, Director of the British           whole systems, innovation and                 Group, by gaining seats within the SEC         delivered, providing a solution for the safe and accurate measurement and billing

  T       meeting took place in
          November and was very
         kindly hosted by member
                                               Plastics Federation (BPF) shared her
                                               thoughts on product specifications, skills
                                               and knowledge.
                                                                                                 decarbonisation, supported by good
                                                                                                 member company input. At the time of
                                                                                                 writing, we are responding to the specific
                                                                                                                                               Panels Testing Advisory Group (TAG) and
                                                                                                                                               the DCCs Testing Design and Execution
                                                                                                                                               Group (TDEG). With ongoing
                                                                                                                                                                                              of hydrogen gas delivery. See more on Hy4Heat overleaf.

                                                                                                                                                                                              BEIS want to develop innovation partnerships with Meter Manufactures which will
                                                                                                                                                                                              allow the hydrogen capable meter development to progress. The programme
      company ControlPoint at their                                                              (GD-2) methodology consultation which         representation on SEC Mods Groups, IMF,
                                               Les Thomas, Utilities Senior Assessor,                                                          TBDG, GBCS/TSIRS, 868 and SMOG, it is a        issued ITT’s in January 2019 with a date of March/April 2020 to utilise the meter in
headquarters in Chesterfield.                                                                    closes in March. Following this, a decision
                                               Lloyd's Register gave an insight to PAS                                                         really busy time for the Group.                initial trials and subsequently move across to community trials in 2021. The
                                                                                                 will be made in May 2019 - leading to a
                                               128: Specification for underground utility,                                                                                                    development of the meter will most likely follow a 2 phased approach - a solution
Members heard from a variety of key                                                              formal submission of GDN’s business
                                               verification and location.                                                                      In December 2018, the Joint Metering           design followed by development of the meter. EUA will monitor all activity of this
industry speakers on a range of topics                                                           plans to Ofgem in Q4 2019.

                                               Future plans
                                                                                                                                               Technical and Metering Services Members        work package and report back to the group.
and themes of interest to the group:
                                                                                                 For 2019, we are looking to refresh EUA’s     Meeting took place. This was an excellent
                                                                                                 Economic Report with content driven by        session with agenda items including the
Tony Nixon, Head of Gas Transmission,
                                                                                                                                               usual review and discussion (sharing of
Regulation at National Grid provided an
interactive session on ‘Shaping the Gas
                                               At the February meeting, NEEG members
                                               will hear from tRIIO’s Director of
                                                                                                 member company input, reflecting the
                                                                                                 different areas they operate in. If there’s
                                                                                                                                               experiences) of the current position of the
                                                                                                                                               Smart Metering programme, an update
                                                                                                                                                                                                                                                      Select
Transmission System’.                          Operations who will provide an update on
                                               tRIIOs delivery of the 8 year contract which
                                                                                                 anything you would like to see included
                                                                                                 which may be useful to your business,
                                                                                                                                               on the SMDA (Smart Metering Device
                                                                                                                                               Assurance), discussions from a number of
                                                                                                                                                                                                                                                      Committee
David Scarth, Project Director –
Routewide Logistics Utilities & Transport,
                                               it delivers for Cadent, as one of its strategic
                                               partners. April 2019 will see tRIIO enter into
                                                                                                 please let us know.
                                                                                                                                               programme governance meetings,
                                                                                                                                               contribution and representation from
                                                                                                                                                                                                                                                      inquiry into
                                               year seven of the contract - it will be an        We will also be looking to develop a
Phase 1, HS2 Ltd, discussed the context
utilities sit in within the wider HS2 world.   opportunity to look back as well as               technical/standards dimension,
                                                                                                                                               Steve Thun, DCC, and developments
                                                                                                                                               around Hy4Heat (see note right)
                                                                                                                                                                                                                                                      gas storage
                                               forwards. There will also be a sector update      particularly representation on IGEM
David Gill, NGN Head of Customer                                                                 committees and we’re identifying
                                               from the HSE, briefings from IGEM on                                                                                                                       n October 2018, Government held a Select Committee Inquiry into gas storage.

                                                                                                                                                                                                 I
                                                                                                                                               Our meeting calendar at Camden House
Energy Solutions spoke about whole             ‘contributing to standards’ and DNV GL on         member companies who might like to                                                                       Roddy Monroe, Independent Chair, joined the panel representing the Gas
                                                                                                                                               for 2019 is below:
                                                                                                 contribute to committees, working groups
energy systems and working together.           Human Organisation Technology (HOT).                                                            19 Feb 2019 (Review IMF Plan, SMDA                         Storage Operators Group (GSOG), one of four key witnesses in attendance.
                                                                                                 and panels. If you would like to be           update, Smart Next Steps),                               EUA along with GSOG members have been lobbying for over a year for this
Stephen Wielebski, Home Builders               As part of our ongoing dialogue with              involved in some capacity or require          21 May 2019                                    inquiry to take place and it was an excellent result for all concerned. Roddy has had follow
Federation, provided house building            Ofgem around RIIO-2, NEEG contributed             further details, please contact               17 Sept 2019                                   up meetings with members of the Committee since the inquiry took place and it is hoped
policy and utility connections updates.        to a number of Ofgem GD-2 workshops on            Peter@eua.org.uk in the first instance.       10 Dec 2019                                    that a report will come out of this which the GSOG group will have an input into it.

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The new energy consumer - Shifting expectations - Also this issue: Energy and Utilities Alliance
H H I C            N E W S

                                                 Hydrogen for Heat...
     HHIC                                                                                                                                                                                                                                     Work Packages 7 to 9
                                                                                                                                                                                                                                              With the safety of consumers and installers

     News
                                                                                                                                                                                                                                              a priority, a co-ordination group will
                                                                                                                                                                                                                                              enable gas distribution network operators
                                                                                                                                                                                                                                              to agree an approach for WP7 (safety

                                                                                                                                               ?
                                                                                                                                                                                                                                              testing) and aligning ‘Hy4Heat’ with other

                                                                                                                                               H
                                                                                                                                                                                                                                              hydrogen programmes and initiatives.
                                                                                                                                                                                                                                              WP8 will see the demonstration of the
                                                                                                                                                                                                                                              prototype domestic hydrogen appliances
                                                                                                                                                                                                                                              which have been developed in WP4. WP9
             he viability of hydrogen as a                                                                                                                                                     testing and certification committee to         is the planning and preparation for a

     T
                                                                                              methane. Hydrogen has very different                 Hy4Heat project board, industry experts
             fuel for the future has become                                                                                                                                                    provide guidance on hydrogen standards.        potential community trial.
                                                                                              combustion characteristics to                        from the Health & Safety Laboratory, DNV
             a hot topic for the plumbing                                                     methane and so current appliances                    GL, and the IGEM Technical Coordinating     In other words: the industry is readying for
            and heating industry.                                                                                                                                                              change.                                        Work Package 10
                                                                                              are unsuitable for use with hydrogen.                and Gas Utilisation committees.
                                                                                                                                                                                                                                              WP10 requires safe and functional
Steve Sutton, Technical Manager, looks at                                                                                                          Work Package 3                              Work Package 4                                 hydrogen meters to be designed and
                                                 The Hy4Heat programme will seek to
the work being carried out by the                                                             Work Package 2                                       WP3 focuses on certification for domesticThe development of domestic hydrogen
                                                                                                                                                                                                                                              delivered, providing a solution for the safe
                                                 provide the technical, performance,
Department for Business, Energy &                                                             The Institution of Gas Engineers &
                                                                                                                                                   hydrogen appliances. In 2018, a survey ofappliances is the core focus of WP4, as it
                                                                                                                                                                                                                                              and accurate measurement and billing of
                                                 usability and safety evidence for
Industrial Strategy (BEIS) who are                                                            Managers (IGEM) has been appointed by
                                                                                                                                                   Notified Bodies and Test Laboratories    looks to demonstrate the safe use of
                                                                                                                                                                                                                                              hydrogen gas delivery. The meters
                                                 hydrogen use.
exploring whether replacing natural gas                                                       BEIS to develop WP2.                                                                          hydrogen as a fuel to provide heat and hot
                                                                                                                                                                                                                                              procured in WP10 will be used for the
(methane) with hydrogen for domestic                                                                                                                                                         water in our homes. WP4, more formally
                                                                                                                                                                                                                                              WP8 trial.
                                                 BEIS has appointed Arup as the
heating and cooking is feasible and could

                                                                                     “
                                                 programme manager who will                                                                                                                      known as the ‘Domestic Hydrogen
                                                                                                                                                                                                                                              Where next?
be part of a plausible potential pathway to
help meet heat decarbonisation targets.
                                                 oversee the entire
                                                 programme (Work Package
                                                 1) and will also be                 Decarbonising
                                                                                                                                                    “         Clean fuels such as
                                                                                                                                                    hydrogen and bioenergy could
                                                                                                                                                                                                    Appliance Development Innovation
                                                                                                                                                                                                       SBRI Competition’, is being
                                                                                                                                                                                                         carried out with the ultimate
                                                                                                                                                                                                                                              Hydrogen presents many opportunities to
                                                                                                                                                                                                                                              decarbonise heat and to the wider energy
                                                                                                                                                                                                                                              network.
As outlined in the Government's Clean            undertaking the work to                                                                            be used for transport, industry, and                   aim of providing critical

                                                                                     heat is arguably the                                           to heat our homes and businesses.
Growth Strategy, there are a range of low        prepare and plan for a                                                                                                                                     evidence of safety, emissions     Innovative developments aside, the
carbon heating technologies with                 community trial (Work                                                                                                                                       and functionality of             progression of hydrogen as a fuel of the
potential to support heat decarbonisation.       Package 9), if BEIS                                                                                We need to test how they work in the                     hydrogen-fuelled products        future rests on the success of the research
BEIS is working with industry and other
stakeholders to build understanding of the
                                                 decides to do this.
                                                 Arup is working with
                                                                                     greatest challenge in                                          existing gas network, whether they can
                                                                                                                                                    fire industrial processes, and how they
                                                                                                                                                                                                             within domestic housing.
                                                                                                                                                                                                             Worth  up to £9 million, the
                                                                                                                                                                                                                                              and development conducted in the
                                                                                                                                                                                                                                              industry.
different approaches, to prepare for
                                                                                     meeting UK climate
                                                 technical and industry                                                                                                                                      competition seeks to
decisions in the first half of the next decade
                                                                                                                                                    could be used in domestic appliances.                   encourage appliance               A separate, Ofgem funded, programme
                                                 specialists: Kiwa Gastec,
about the long-term future of heat.              Progressive Energy,                                                                                Clean Growth Innovation Challenges -                   manufacturers to push              researching the possibility of re-purposing

Hydrogen gas as a replacement for
                                                 Embers and Yo Energy.
                                                                                     change targets                                                 Clean Growth Strategy
                                                                                                                                                                                                         forward the development of
                                                                                                                                                                                                       boilers (combi and
                                                                                                                                                                                                                                              the gas network ‘upstream of the gas
                                                                                                                                                                                                                                              meter' is currently underway. Ofgem has
methane is just one of several routes that
BEIS is considering to decarbonise heat.
The main advantage of hydrogen is that it
                                                 BEIS will appoint contractors to
                                                 deliver the other work packages
                                                 that all together make up the whole
                                                                                                                                    ”                                                          ”       regular/system), cookers (stand-
                                                                                                                                                                                                      alone hobs, ovens with grills and
                                                                                                                                                                                             integrated freestanding cookers) and fires.
                                                                                                                                                                                                                                              commissioned the Gas Distribution
                                                                                                                                                                                                                                              Network Operators (GDNOs) to research
                                                                                                                                                                                                                                              the technical and safety challenges of
does not release carbon dioxide during           programme. The Hy4Heat team will                                                                                                           BEIS is also urging competitors to use            using hydrogen in the gas distribution
combustion, unlike methane and all               oversee and manage all of these as part of                                                        reported that hydrogen appliances could  development funds to produce innovative           system which could ultimately result in a
hydrocarbons.                                    their main programme management role         Working in close collaboration with leading          be certified under the existing Gas      domestic hydrogen appliances.                     UK hydrogen conversion strategy, making
                                                 and the programme will run to March          industry partners such as HHIC, IGEM will            Appliance Regulation (GAR). In August                                                      a significant contribution towards the UK’s
To support this exploration, Government          2021.                                        look to develop functional gas standards             2018, the HHIC attended a stakeholder    Work Packages 5 and 6                             decarbonisation agenda.
has allocated £25 million to a study called                                                   for hydrogen for use within the ‘Hy4Heat’            event that explored the development of   Tenders have already been received for
Hy4Heat – a range of inter-related ‘work-        The programme is initially addressing two    demonstration programme. IGEM will                   test standards for the certification of  WP5 and WP6 which will see BEIS appoint           Hydrogen use in vehicles is a major focus
packages’ that will form a feasibility study     key challenges with hydrogen; firstly,       introduce three working groups that will             appliances fuelled by hydrogen. These    contractors to deliver comprehensive              of research and development too. There
to establish the parameters of employing         demonstrating the safety case associated     review areas such as DSEAR, materials,               are independent standards that           research reports on the feasibility of            are many examples of hydrogen already
hydrogen as a replacement for natural gas        with using hydrogen in buildings and         leakage rate, and ventilation; appliance             appliances must meet to receive a “CE    converting commercial sector appliances           being successfully employed in cars, buses
in heating our homes, commercial                 secondly, the need to have appliances        location, fluing, installation and air supply.       mark”. Additionally, the group discussed and industrial heat generation from natural       and vans with much interest in hydrogen
buildings and for use in appliances.             that can burn hydrogen rather than           The work will be peer reviewed by the                the potential to establish an appliance  gas to hydrogen.                                  as an alternative transportation fuel.

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The new energy consumer - Shifting expectations - Also this issue: Energy and Utilities Alliance
H H I C            N E W S

  HHIC                                                                          ECO3                                                                                                                                        In tune, up to
  News
                                                                         Consultation                                                                HWA
                                                            A step in the right direction                                                            News                                                                    date, let the
                                                                                                                                                                                                                               hot topics flow
      T
              here are many positives to be   Government listened to the views of the
               taken from the recent ECO3     HHIC, and other key industry players, that it
              consultation, and it is         is too early to insist all new installations
             encouraging that the ideas,      carried out under the ECO3 header should
          reservations and                    be accredited by the Each Home Counts
recommendations put forward by the
                                              review, especially since it is not yet up and
heating industry have been considered and
                                                                                                                                                             WA is constantly striving to

                                                                                                                                                  H
                                              running; nor have the requirements been                               ECO3                                                                        water storage solutions. From dispelling       The campaign, running both on and
incorporated into parts of these plans.
                                              agreed. HHIC is relieved that the ECO3                                                                          provide quality, topical          cylinder jargon to sizing a cylinder for       offline reaffirmed the position that hot
Stewart Clements, Director of the HHIC,
                                              scheme will not require Each Home Counts                                                                        advice and information to         individual household needs, this area of       water storage is a modern choice for UK
comments on the latest review.
                                              compliance until further                                                                                      support businesses and              the website is constantly being reviewed       home-owners, while highlighting the
                                              clarification is put in                                                                                     consumers of hot water                to ensure there is the right information to    many plus points of opting for a new
HHIC’s foremost concern was that amends                                                                                                         products. Let’s take a look at some of the      make an informed choice.                       cylinder, such as, instant hot water from
to the ECO scheme would result in greater     place. It is
                                                                                                        how the Each Home Counts plan           resources available.                                                                           multiple outlets simultaneously. This is
red tape for installers sitting alongside     certainly
                                                                                                        should look, as far greater                                                             Within the ‘homeowner hub’ there is also       especially key when people are in the
                                              prudent of
harsh cuts to funding. There was much
                                              Government
                                                                                                        inclusion will be needed before it      Website                                         a frequently asked questions area,             market to upgrade or replace their
included in the forty-two-question
                                              to consult
                                                                                                        can even begin to be seen as an         www.hotwater.org.uk                             containing questions and answers to            existing hot water system, or are in the
consultation, but encouragingly industry’s                                                              industry-led scheme.                                                                    things like; “Does a new cylinder have to      process of opting for a new build or
views and reasoning fed into the changes      the industry                                                                                                                                      be fitted in the same place as the old         renovation project.
that will take the scheme through to 2022.    further on                                                                                                                                        one?” and “I am thinking of installing solar
                                                                                                       The minimising of red tape, more
                                                                                                                                                                                                thermal panels at some point, but not
                                                                                                     flexible eligibility, recognition of oil
                                                                                                                                                                                                straight away. Do I need a twin-coil
HHIC had expressed concern                                                                       usage in rural areas and changes to
                                                                                                                                                                                                cylinder?                                      Part of the
about quality mark requirements                                                                 supplier obligations, should make a clear
and the proposed inclusion                                                                      difference to delivering the ECO scheme                                                                              Media                     consumer
                                                                                                                                                                                                                                               campaign
within this consultation and ECO                                                                where it is needed most.                                                                                                                       included
more generally. By bringing in                                                                                                                                                                                             Over the past
                                                                                                                                                                                                                                               the creation
                                                                                                                                                                                                                              two years the
additional red tape it was felt that                                                                                                                                                                                                           of a series
                                                                                                                                                                                                                               HWA has
installers - who are already highly                                                                                                                                                                                                            of useful

                                                                           What is ECO3?
                                                                                                                                                                                                                                been turning
accredited through other                                                                                                                                                                                                                       videos
                                                                                                                                                                                                                                up the heat
schemes - may be dissuaded                                                                                                                                                                                                                     which are
                                                                                                                                                                                                                                with a
                                                                                                                                                                                                                                               hosted on the HWA YouTube channel
                                                                                                                                                As well as the usual ‘about us’ and                                            consumer
                                                                                                                                                news sections, the website has a                                             campaign,         • Hot water storage in action: four
                                                                                                                                                dedicated ‘Resource’ section with                                         aimed at               bedroom property case study
                                              The Energy Company Obligation scheme (ECO) is a programme that delivers energy
                                                                                                                                                over 40 different resources available.                                  educating              • How do I choose the right hot water
                                              efficiency measures to low income and vulnerable households across Great Britain. Since           From engineer guides to product                                    consumers on the              storage system?
                                              the scheme was launched in January 2013, 2.3 million energy efficiency measures                   bulletins on topics such as:                    advantages and abilities of the modern         • Do I need to connect hot water storage
                                                                                                                                                • Guidance on the selection and                 day hot water cylinder. Despite the UK’s
                                              have been installed in approximately 1.8 million homes, helping to reduce energy                                                                                                                   to renewable energy sources?
                                                                                                                                                  installation of storage cylinders for solar   long standing love of storing towels and
                                              bills and making homes more energy efficient. The latest consultation on the scheme                                                                                                              • Why should I consider a hot water
                                                                                                                                                  thermal hot water systems.                    drying clothes in an airing cupboard,            storage system?
                                              concluded last year and recommendations were taken forward in the Autumn.                         • Using unvented cylinders with solid           many have been enticed away by the lure
                                                                                                                                                  fuels                                         of the cylinder free system.                   When you take into consideration how
                                                                                                                                                • Meeting current legislation                                                                  much the average household depends
                                              The current ECO3 scheme runs until March 2022 and the Department for Business,                    • Heat pumps and hot water storage              The consumer campaign is designed to           on their hot water system, keeping
from working under                            Energy Industrial Strategy (BEIS) received 239 responses to the consultation last year            • Stored Hot Water Solutions in Heat            raise awareness of the options available.      homeowners and engineers up to speed
the ECO; something which                                                                                                                          Networks 2018                                 The idea is to give homeowners the tools       is essential. With HWA’s suite of
                                              from a variety of stakeholders ranging from large energy suppliers and trade
would slow down the process of                                                                                                                                                                  to talk knowledgeably to their installers      information homeowners can make
homeowners having measures                    associations to individuals with an interest in energy efficiency and fuel poverty.               For customers there is information              and to enable them to enjoy the benefits       educated choices with the support of
installed under ECO.                                                                                                                            available to help with decisions on hot         of hot water storage.                          well-informed engineers.

  8                                                                                                                                                                                                                                                                                    9
The new energy consumer - Shifting expectations - Also this issue: Energy and Utilities Alliance
I C O M             N E W S                                                                                                                    N G V           N E T W O R K                      N E W S

      ICOM
                                                                                                                                                 NGV                                              Household brands
      News
                                                                                                                                                 Network
                                                                                                                                                 News
                                                                                                                                                                                                  proving the gas
                                                                                                                                                                                                  concept
                                                                                                                                                              n 2018 household brands such

Priorities for                                                                                                                                    I            as Sainsbury’s, Hermes, TK
                                                                                                                                                               Maxx and Ocado led the way in
                                                                                                                                                              committing to running
                                                                                                                                                           substantial numbers of their HGVs

transforming heating                                                                                                                          on natural gas. The John Lewis Partnership
                                                                                                                                              thrust themselves to the forefront of the
                                                                                                                                              movement, purchasing a 50-strong gas fleet
                                                                                                                                              and committing, along with their sister
Ross Anderson, Director ICOM                                                                                                                  company, Waitrose, to going diesel-free by
                                                                                                                                              2028. The move is set to save more than
                                                                                                                                              49,000 tonnes of CO2 annually,

      A
                recent document from the        However, as capacity from renewable             wider use of smaller heat networks            equivalent to the carbon
                 Department for Business,       sources such as wind and solar increases,       serving local buildings, so there will be a   footprint of more than
                 Energy and Industrial          this will become less of a concern – at least   growing demand for heat interface             6,000 UK households.
                Strategy (BEIS) provides an     when the wind is blowing and the sun is         units (HIUs) and metering systems.            Many other companies
            insight into the Government’s       shining.                                                                                      concerned about the
thinking with regard to energy and carbon,                                                      In all cases, other than standalone           public perception of
and a useful reference for ICOM and other       Because of a reduction in the average           domestic installations we will also see       diesel and wishing to
EUA members. Ross Anderson, Director of         carbon content of the power grid, electric      space heating and hot water systems           benefit from lower
ICOM, provides an overview                      heating is receiving a lot of attention from    served by a wider variety of heat             transport costs are
                                                BEIS so ICOM members must be aware              sources and this needs to be paralleled       trialling gas vehicles with
Entitled ‘Clean Growth – Transforming           of this situation. This trend is reflected in   by more sophisticated control than has        a view to replacing their
Heating’, the document reinforces the focus     the latest version of the Standard              historically been the case.                   diesel fleet.
on decarbonisation of the UK’s energy           Assessment Procedure (SAP 10) and is                                                                                                              enables truck manufacturers to build scale and     gas engines having less power than
infrastructure, noting that heating remains     also anticipated for the next version of the    For example, there is great potential for     Tighter regulations on diesel vehicles which        reduce the costs of gas vehicle production.        diesel. Feedback from recent trials is that
the largest source of greenhouse gas            Simplified Building Energy Model (SBEM).        hybrid systems combining heat pumps           produce toxic gases, harmful particulate                                                               the latest engines have overcome this
emissions. It also identifies gas as the        However, BEIS notes that widespread use         with gas-fired condensing boilers.            matter and carbon emissions in much larger          Natural gas is a genuine alternative for haulage   issue. Drivers also comment on the
predominant source of heating.                  of electric heating is dependent on the         However, these will only deliver the          volumes than cleaner natural gas, has buoyed        companies particularly now that major truck        engines being much quieter and driving a
“Whichever approaches are taken, the way        development of new, and reinforcement           required efficiencies if the control          interest in natural gas vehicles. The               manufacturers such as Iveco, Scania and Volvo      gas engine vehicle is much less tiring.
heating is supplied to nearly 24 million        of existing infrastructure to generate, store   system is able to manage the                  technology represents a significant proportion      are manufacturing trucks with gas engines.         Something rarely commented on but
homes, businesses and industrial users          and distribute low carbon electricity.          performance of each of these                  of new HGV registrations (10 per cent of the                                                           reported widely is that truck drivers are
connected to the gas grid will need to                                                          technologies to optimise overall              4×2 market) and is expected to continue to eat      Transport strategies aim to achieve zero           exposed to high levels of vehicle air
change,” it notes.                              Alongside these aspirations is a desire to      performance.                                  up diesel’s long-held market share, particularly    emissions but often the technologies aren’t        pollution and gas provides a cleaner and
                                                make wider use of hydrogen and                                                                following the introduction of 6×2 units at the      available or are impractical in day to day         safer environment for their work. Trials are
To that end, there is a predictable emphasis    bioenergy. In relation to hydrogen there is     At 136 pages long, the BEIS document          back end of last year.                              operation. HGV’s are the hardest vehicles to       demonstrating cost savings from gas of at
on promoting low carbon heat                    still work to be done on the safety aspects     covers these issues in much more detail                                                           decarbonise because of weight and space            least £6,000 per vehicle per year after
technologies such as heat pumps, biomass,       of converting the gas grid, a task that will    than is possible here, but the clear          Government recognises that they must act and        limitations, a fact recognised in the DFT’s        deduction of the higher lease cost.
biomethane and solar thermal, along with        be comparable to the change from coal           message is that there will be significant     incentivise the take up of low carbon               “Road to Zero”. Electric or hydrogen HGV’s are     Applied across the HGV vehicle park this
wider use of heat networks for the              gas to natural gas in the 1960s and 70s.        investment in areas such as heat              gas HGVs. In November’s Budget the                  impractical and likely to remain so for the        would save the industry £1bn per year!
distribution of heat. The focus on heat                                                         networks, hydrogen and bioenergy.             Chancellor announced an 8-year extension of         foreseeable future. The only viable low carbon
pumps is a concern, as most heat pumps          Clearly ICOM members have a key role to         The document is available on the ICOM         its policy of lower fuel duties on cleaner fuels.   alternative to diesel is natural gas and when      The pace of change in the transport
are currently driven by electricity generated   play in helping the Government’s                website and members affected by this          This fixes the tax differential between natural     used alongside zero-carbon biomethane, the         industry is expected to continue in 2019,
from highly inefficient gas and coal fired      commitments to reducing greenhouse              need to ensure they are well positioned       gas and diesel and extends the commitment           environmental advantages really stack up.          with more suppliers seeking to make the
power stations.                                 gas emissions. We can expect to see             to contribute to this transition.             to 2032. It provides investment certainty and       HGV drivers have previously commented on           move to natural gas and biomethane.

 10                                                                                                                                                                                                                                                                                              11
The new energy consumer - Shifting expectations - Also this issue: Energy and Utilities Alliance
P R E S I D E N T ’ S                                 C O L U M N                                                                                           MEHNA NEWS

                                                      A year in                                                                                                  MEHNA
                                                                                                                                                                                                                 A single voice for
                                                                                                                                                                                                                 suppliers of heat
       President’s
       Column                                         numbers
                                                         EUA President, Dr. Elaine Lancaster looks at how EUA’s activities
                                                                                                                                                                 News                                            network products
                                                    add up to help shape future policy direction within the energy sector.                                                                                                                                                                   Leeds District Scheme

   A
                s 2019 gets well underway, I            world class manufacturing, research and
                 thought it would be a good             development and leading services industries.
                 opportunity to reflect on the
                varied and excellent work EUA           EUA’s commitment to bringing member
               undertook in 2018.                       companies together to solve industry issues
                                                        and provide an enviable information source is
How much do you know about EUA as an                    a major driving force behind our outputs. Last
organisation and its workstreams? Are you                                       year we ran 121

                                                                                                                                                              A
aware of its size and breadth of                                                                                                                                           new division of the EUA,
                                                                                     member group
representation over a wide range of policy                                                                                                                                  Manufacturers of Equipment of
                                                                                         meetings and
areas? Do you know who your fellow                                                         EUA staff                                                                        Heat Networks Association
members are and what they do? Why not                                                  attended 189                                                                        (MEHNA) has been established
flick to the back page to see the full list. It’s                                 technical committee                                                                   specifically to support and
nice to know you are in good company!                                       meetings and other panels                                                       promote best practice in the design and
                                                                      (such as                                                                              operation of heat networks. Ross Anderson
EUA works to shape future policy direction on                    APPG’s, Boards,                                                                            explains.                                            the overall system, including heating plant,       ensuring that necessary changes are made
  behalf of members and the wider                          Working Groups, and                            Did you know that our member companies                                                                 pipework, valves, heat interface units (HIUs)      to the document.
      community. The longer term vision of              Stakeholder groups) on                            employ approximately 252,200 people, and          It is now well accepted that heat networks will      and metering. Many of these products are
          EUA is that by 2025 we will have              behalf of members, as                             if you include those indirectly employed, our
                                                                                                                                                            play a key role in the UK’s carbon reduction         supplied through members of divisions              Another early success for MEHNA has been
            shaped the UK’s heat and                    well as holding                                   sector accounts for one in every 40 people
                                                                                                                                                            strategy. Indeed, in 2017 the Department for         within the EUA, such as ICOM, HHIC, HWA            productive dialogue with the Building
               transport decarbonisation                over 200 meetings                                 in the UK today. A key part of our strategy is
                                                                                                                                                            Business, Energy and Industrial Strategy (BEIS)      and UN.                                            Engineering Services Association (BESA),
                    policy, paying due                  with BEIS, other                                  helping to realise the industry requirements
                       regard to affordability                                                            for a qualified, capable and diverse              noted: “Heat networks form an important part                                                            which publishes a test regime for HIUs.
                                                        Government                                                                                          of our plan to reduce carbon and cut heating
                         and security of supply                                                           workforce to meet the challenges of the                                                                For that reason it was decided last year, at the   Following input from MEHNA the test
                                                        departments, senior civil servants,
                         whilst continually                                                               coming decades. In my role as EUA                 bills for customers (domestic and commercial).       request of EUA members, to create a new            regime has been modified to more closely
                                                        MPs and policy makers.
                            acting on                                                                     President I will be focussing on skills issues,   More recently BEIS has launched a £320               division that would give a shared voice for        reflect the market and we hope to have
                                 members’                                                                 talking to members and asking them to             million Heat Networks Investment Project             heat networks - the Manufacturers of               future involvement in BESA’s steering group
                                                        These outputs saw success in:
                                      behalf.                                                             share ideas relating to their own recruitment     (HNIP) which will offer grants and loans to both     Equipment of Heat Networks Association             and technical committee.
                                                        • Securing the fuel duty differential rate for    practices and the specific challenges they        the public and private sectors in England and        (MEHNA). This move has been welcomed by
                                                          natural gas as a vehicle fuel to help           are facing. It is crucial we widen the talent     Wales, for networks serving two or more              BEIS and MEHNA is already working with the         Also challenging is the lack of standards in
                                                          decarbonise UK HGV’s.                           pool in our industry through gender and           buildings.                                           Heat Network Delivery Unit and the metering        some areas of the heat network system and
As President of EUA,                                    • Directly influencing new Boiler Plus            diversity and I hope to be able to share the                                                           and billing departments of BEIS.                   MEHNA is working with the British Standards
I have the privilege of presiding over                    legislation.                                    results of my findings with you soon.                                                                                                                     Institution (BSI) to remedy this shortfall. As
325 member companies across eight                       • Contributing to Government’s Smart meter                                                                            Gateshead District Energy Scheme
                                                                                                                                                                                                                 The role of MEHNA is to represent the              part of this, we have been instrumental in
organisational divisions:- Utility Networks               programme, around standards, testing and        Finally, we all know the energy sector is
                                                                                                                                                                                                                 product manufacturers in discussions on            resurrecting a dormant BSI committee on
(UN), Heating and Hotwater Industry Council               codes of practice.                              facing a period of massive disruption. New
                                                                                                                                                                                                                 regulations and standards with a view to           heat exchangers and will be involved in
(HHIC), Industrial and Commercial Energy                • Helping Government recognise the                technologies and demand-side response,
                                                                                                                                                                                                                 ensuring heat networks are designed to             writing a new standard for HIUs that will
Association (ICOM), Hot Water Association                 importance of gas as part of the energy mix.    combined with new market structures and
(HWA), Manufacturers’ Association of                    • Raising the profile of the work being           user platforms, are impacting the energy                                                               operate as efficiently as possible. As well as     bring a major change in the design,
Radiators and Convectors (MARC) British                   undertaken in the energy industry into          sector as we know it. While this transition is                                                         addressing product design and operation,           manufacture and operation of HIUs.
Energy Efficiency Federation (BEEF) and                   hydrogen as a future fuel.                      opening up exciting possibilities, it won’t be                                                         MEHNA is working closely with the
Manufacturers of Equipment in Heat                      • Helping Government understand the               without its challenges and there is a                                                                  Chartered Institution of Building Services         The progress made already is a clear
Networks Association (MEHNA). The current                 significance and implications of low carbon     significant amount of uncertainty in the                                                               Engineers (CIBSE) and the Association for          indication of the need for a single voice that
divisions all work side by side supported by a            gas - biogas, synthetic natural gas and         strategic role envisioned for the future of                                                            Decentralised Energy (ADE).                        supports the products in this growing market
common strategy but have quite different                  hydrogen – as a means to decarbonise UK         gas. However, EUA firmly believes that gas                                                                                                                and MEHNA has already attracted three new
areas of focus. Across these divisions we have            heating and transport.                          will play a vital role in the drive towards                                                            For example, CIBSE is reviewing its Code of        members that were not formerly involved
a wide range of members, from those                     • Raising business and consumer awareness         decarbonisation and that it can support                                                                Practice for heat network design (CP1) and         with the EUA. There is still much to do and
involved in fuel supply to the end user,                  through publication of a series of guides and   plausible pathways to a low carbon energy         One challenge, however, is that heat networks        MEHNA is involved in the review process by         we will continue our work to represent
covering all sectors of the economy, including            other industry resources.                       system.                                           use a number of different products to create         compiling members’ comments and                    member’s views in this area.

  12                                                                                                                                                                                                                                                                                                             13
The new energy consumer - Shifting expectations - Also this issue: Energy and Utilities Alliance
MARC NEWS                                                                                                                                           EUA EVENTS ROUND UP - GAS 2018

                                              Quality                                               We are extremely grateful to our event
                                                                                                    speakers, sponsors, DNV GL, Northern
                                                                                                                                                    Gas 2018... there’s space for gas
      MARC                                    assurance
                                                                                                    Gas Networks, Wales & West Utilities and
                                                                                                    Uniper and our exhibitors, ALH Systems,
                                                                                                    Bell Apparel, Pipeline Industries Guild.

      News                                    is key for                                                                                               in the decarbonisation drive
                                              MARC
                he UK’s radiator                               actual output.

      T
                 industry is                                   Radiators sold in the UK have
                 making a unified                              to conform and have outputs
                 call for zero             ITY
                                         AL
                                                               verified to BS-EN442 the
               tolerance on                                    European standard for
                                    QU

            companies who                         ✔            radiators. All radiator literature
mislead customers on the power                                 needs to display BS-EN442

                                                                                                       E
of their products.                                                                                                  UA’s flagship seminar, Gas      New technologies, like battery storage,
                                                    CE

                                                               compliance, which enables                            2018, examined the future       electric vehicles, and demand-side
                                       AS                      specifiers to show compliance
                                           SURA
                                                                                                                    of gas in the UK, for heat,
                                                  N

                                                                                                                                                    response, combined with new market
The Manufacturers Association of                               with the European construction
Radiators and Convectors                                                                                           transport, and industry. The     structures and user platforms, could
                                                               products directive.                              day was spent looking at a
(MARC), is committed to product
                                                                                                                                                    change the face of the energy sector as we      Other information presented included:
satisfaction and consumer                                                                           varied view of the next 50 years of gas and     know it.                                        The latest on Energy regulation. Ofgem’s
                                                          BS-EN442 shows that the                   speakers came from across the industry.
assurance and members have                                                                                                                                                                          innovation incentive under RIIO-1 has led to
                                             stated output levels have been                                                                         There are changes already taking place in
pledged to raise standards and compliance,                                                                                                                                                          cost savings but things are going to get
                                             independently verified, but some products              To highlight the sheer rate of change,          the energy market:- Decarbonisation:
through a series                                                                                                                                                                                    tougher and the next phase, RIIO-2, will be               The use of hydrogen, both 100 per cent and
                                                                        are getting into            delegates were reminded of what was new         Government needs to reduce Green
of initiatives.                                                                                                                                                                                     more consumer focused when it comes into                  blended, bio-methane, bio-SNG, bio-LPG,
                                                                        the country                 50 years ago:                                   House Gas emissions by 80 per cent by           effect in June 2021.                                      wind, solar, hybrid heat pumps incorporating
                                                                           without                  • preparations for decimalisation were          2050. Decentralisation: Energy generation
MARC’s pledge                                                                                                                                                                                                                                                 a gas boiler and many other small solutions
                                                                           undergoing this            being made and the new 5p & 10p coins         is moving closer to the point of use.
has been created                                                                                                                                                                                    Cuadrilla produced the first sample of Shale              will all add up to the final result.
                                                                           process.                   were issued                                   Digitalisation: New technology, devices
to ensure                                                                                                                                                                                           gas in the UK on 2nd November.
                                                                           Therefore,               • the North Sea gas conversion programme        connected to the Internet and IoT driven
industry wide                                                                                                                                                                                                                                                 In transport, buses and HGV vehicles are
                                                                           anybody buying             started in Burton on Trent                    smart home technology is a key driver of
compliance with                                                                                                                                                                                     Issues around changing the natural gas                    looking towards bio-methane and hydrogen,
                                                                           a radiator should        • Concorde was preparing for its first flight   change, transforming how customers
the Construction                                                                                                                                                                                    specification in the GSMR could give the gas              as electric does not provide a solution
                                                                           look out for the                                                         interact with energy. Sector convergence:
Products                                                                                                                                                                                            industry problems due to the speed of change              currently. Hydrogen powered trains are also
                                                                           British Standard         Looking ahead to where the industry will be     Fundamental changes in the market and
Regulations,                                                                                                                                                                                        of the specification, the range of the new                part of the mix.
                                                                           BS-EN442                 in 50 years was much harder. One thing was      new collaborations i.e. electric vehicles
which apply to all                                                                                                                                                                                  specification and the problems of metering.
                                                                           accreditation on         clear, energy is undergoing a revolution.       (EVs) are bringing partnerships between
products sold                                                                                                                                                                                                                                                 While energy transition is opening up
                                                                           packaging or on          The way we use it, the way we control it, and   car manufacturers and electricity suppliers.
into the                                                                                                                                                                                            Of concern for industry is the existing housing           exciting possibilities, it won’t be without its
                                                                           the product.             the way we access it are all changing.
construction                                                                                                                                                                                        stock. Government will have to help support               challenges. There is a significant amount of
                                                                           If substandard                                                           The scale of the challenge facing the
industry                                                                                                                                                                                            and incentivise households to help UK reduce              uncertainty in the strategic role envisioned
                                                                           radiators are            Speakers highlighted that over the coming       energy industry requires a shift in
including those                                                                                                                                                                                     emissions.                                                for the future of gas and high levels of
                                                                           installed,               years, the energy sector will go through a       approach. Many speakers emphasised
purchased                                                                                                                                                                                                                                                     uncertainty present a great challenge to
                                                                           customers lose           period of massive disruption.                      that there are no silver bullets and no
online.                                                                                                                                                                                             For the consumer it’s all about managing                  policy makers. However, this seminar
                                                                           out on warmth                                                                 one route is the answer, that there will   affordability. It is inevitable that costs will trickle   cemented the view that gas will play a vital
                                                                           and efficiency                                                                 be a combination of answers, which        down to the consumer for all these changes.               role in the drive towards decarbonisation
MARC will be                                                               and end up                                                                     are likely to continue to evolve.                                                                   and can support plausible pathways to a low
working across                                                             disappointed,
                                                                                                                                                                                                    The Cadent HyDeploy project to determine                  carbon energy system.
the whole                                                                  having generally
                                                                                                                                                                                                    the percentage of hydrogen that can be
industry to                                                                paid over the
                                                                                                                                                                                                    injected into the grid, has obtained the                  Over 100 delegates joined EUA for Gas 2018
ensure that all companies’ marketing             odds, based upon the stated outputs. That
                                                                                                                                                                                                    required exemption from HSE.                              at the National Space Centre in Leicester and
materials and product performance data are       cannot be acceptable in our industry.
                                                                                                                                                                                                                                                              the day concluded with a private show in the
correct. Tests conducted by MARC
                                                                                                                                                                                                    Bio-LPG will help protect the off-grid industry           digital planetarium of ‘We Are Astronomers’,
members on imported products have                MARC will be launching a series of initiatives
                                                                                                                                                                                                    and the consumers who rely on oil or LPG to               a 360° virtual trip into space, narrated by
shown stated outputs up to 68% higher than       to support the pledge later on this year.
                                                                                                                                                                                                    heat their homes.                                         David Tennant.
 14                                                                                                                                                                                                                                                                                                     15
The new energy consumer - Shifting expectations - Also this issue: Energy and Utilities Alliance
FEATURE: THE NEW ENERGY CONSUMER

The new energy consumer
Shifting expectations
               nergy is one of life’s

  E
                                                                                                                                                  The rise of innovative and
                                                The battle is already on to own the           The acquisition allows British Gas to launch a                                                      and influential or adopting a simple,                  asset light, have high scalability, attract a lot of
                essentials. But the way it is   ‘connected home’, with companies from the     family of smart home products to bring                                                              effortless set-and-forget mindset. All the             free publicity and use the shared economy
                produced, distributed and       technology, entertainment and telecoms        consumers innovative ways to help them              disruptive business                             while, the digitisation of everything is               (share goods and services facilitated by an
               consumed is undergoing           sectors seeking to gain customer traction.    reimagine how they live in their homes.             models                                          becoming a normal part of everyday life.               online platform).
            fundamental change. There’s         Google, Apple and Samsung have all made
already been a significant reduction in the     moves in this space. And while the            Customer attitudes are evolving and their           A growing number of consumers are filling       This hyper-connectedness is creating a
carbon content of the energy produced           connected home market remains                 approach to energy is changing because of           their homes with connected devices.             world in which companies, consumers and
and consumed, but according to the latest       fragmented, opportunities are emerging in     these new tools at their disposal and               Kitchen appliances, thermostats, lights,        everyday objects can digitally interact with
report from the Intergovernmental Panel         home energy management. For example,          changing customer behaviour is a huge               locks, phones and televisions are               each other. Connected everything has
on Climate Change (IPCC) published late         British Gas acquired AlertMe, a developer     challenge for energy companies. In the past,        becoming smarter and more                       raised the bar with consumers who now
last year, we face a stark future unless we     of platforms for running smart home           customers were relatively disengaged, only          interconnected. In fact, almost all energy      expect choice, control and convenience.
redouble our efforts to decarbonise.            devices which runs the Hive product,          seeking to interact with their energy               consumers now use some type of                  The characteristics of these innovative new
                                                allowing consumers to control their heating   company when there was a problem. But               connected device in their day-to-day lives.     business models adopted by companies
Decarbonising energy is not the only            and hot water remotely.                       not anymore.                                        With smart devices, consumers can               such as Uber, Airbnb and Amazon are
answer. Giving consumers more control                                                                                                             choose between being highly informed            heavily technology driven. They tend to be
over their energy is also required.
Technology can help by bringing the
source of energy production closer to the                                 Centralised             Decentralised
consumer, enabling self-generation and                                    production               prosumers
storage of their own energy and creating
smarter homes and businesses.                                                                                                                     Case study: The digital transformation by ENGIE
                                                     Physically
The shifting energy                                  connected
ecosystem                                            to the grid                                                                Off-grid

                                                                                                                                                     E           NGIE (previously GDF Suez)
                                                                                                                              opportunities                                                                                                              ENGIE plans to invest €1.5 billion in new
                                                                                                                                                                 has an ambition of being a
                                                                                                                                                                                                     “         As part of our ambitious
                                                                                                            N

                                                                                                                                                                                                                                                         businesses and digital technology. The
                                                                            D

Technology is now eclipsing competition
                                                                                                                                                                leader in energy transition.               three-year transformation plan                Group has set up its ENGIE Digital skills
                                                                                                               EW
                                                                       WORL

as the biggest single transformational force
                                                                                                                                                              Facing significant market             to become a forerunner of the future energy           centre to support its operational entities
affecting the consumer’s relationship with
energy. It is shifting customer expectations                                    The Shifting                                                       transformation, ENGIE sought to review
                                                                                                                                                   its retail operations and transform the
                                                                                                                                                                                                     world, we are making a big investment to
                                                                                                                                                                                                    digitise our company, redefine the customer
                                                                                                                                                                                                                                                           and created ENGIE Tech as a
                                                                                                                                                                                                                                                            development platform for an ecosystem
of what to expect from companies. The
                                                                                                                WOR

                                                                                                                                                   digital experience for its business and
online experiences customers are
becoming used to in areas such as
                                                                                   Energy                                          Flexibility
                                                                                                                                 in storage and
                                                                                                                                                   residential customers. Its
                                                                                                                                                                                                    experience and set new rules of engagement
                                                                                                                                                                                                                    in the industry.
                                                                                                                                                                                                                                                            of partners and a facility for developing
                                                                                                                                                                                                                                                             the business software to deliver its
                                                Predictable                                                                                        transformation includes reimagining the                                                                  products and services. In customer
                                                                     D

retailing, travel and media are setting a
new norm.
                                                   load                          Ecosystem                                           demand
                                                                                                                                    response       delivery of traditional commodity               Digital is central to the products and services we
                                                                                                                                                                                                                                                            relations ENGIE has developed a
                                                                   L

                                                                                                                                                   services, such as selling gas and             offer, a key driver of competitiveness, and a powerful
                                                                                                                    L

                                                                                                                                                                                                                                                           comprehensive package of online services
                                                                         O

                                                                                                                                                   electricity.                                       lever for changing our operating methods.
                                                                                                               D

                                                                                                                                                                                                                                                          for its domestic customers, ranging from
And from this, a more complex energy
                                                                                                                                                                                                                                                         energy self-management to information,
ecosystem is emerging with the                                                                                                                                                                                   Isabelle Kocher,
relationship between the consumer and
the way they manage their energy now                                                                            Lifestyle
                                                                                                                                                   It also includes designing new services to
                                                                                                                                                   disrupt the market, challenge competitors
                                                                                                                                                   and new entrants and, ultimately, position
                                                                                                                                                                                                            Chief Executive Officer, ENGIE.
                                                                                                                                                                                                                                                ”        online sales and digital billing. More than 30
                                                                                                                                                                                                                                                         per cent of customers are using the ENGIE
                                                                                                                                                                                                                                                         website to manage their own accounts.
more fluid and far-reaching. Customers                                Energy                                   connected                           ENGIE to move into new markets and
have choices around generating, storing                              products                                    energy                            regions. Among the possibilities: servicing   home solutions in ways that delight                     Case Study taken from Accenture report ‘The
and trading their own electricity as well as                                                                    services                           the new era of electric and self-driving      customers, and helping customers in their               New Energy Consumer 2017 – New Paths to
about energy management, efficiency,                                                                                                               vehicles, connecting the coming wave of       energy transition projects.                             Operating Agility’
automation, monitoring and control.

 16                                                                                                                                                                                                                                                                                                    17
The new energy consumer - Shifting expectations - Also this issue: Energy and Utilities Alliance
FEATURE: THE NEW ENERGY CONSUMER                                                                                                                       L O W C A R B O N C O N S U LTAT I V E F O R U M

                                                                         customer simply wants affordable warmth when it is needed. A new
                                                                         policy and regulatory landscape will be required for the new energy
                                                                         consumer, built around enabling them to benefit from the transition
                                                                                                                                                            Low carbon gas
              The New
                                                                                                                                                         examined at EUA forum
                                                                         and ensuring they are at the heart of the system and its policy
                                                                         framework. Lack of consumer action could become a central barrier
                                                                         to achieving a decentralised, decarbonised energy system.
          Energy Consumer                                                While consumers will continue to evolve, these new characteristics
                                                                         will remain at the core of the preferences and behaviours of next-
              Shifting                                                   generation consumers. Successful energy providers will be those that
                                                                         understand how and why the new energy consumer requires much
                                                                                                                                                       Hydrogen for a low carbon future was the focus of EUA’s second
            expectations                                                 more than the traditional utility service model. They will also
                                                                         recognise that strategies for interaction, new products and services,
                                                                                                                                                            Low Carbon Consultative Forum in December 2018.
                                                                         or in-home technologies should be integrated. Incorporating
                                                                                                                                                                       xclusive to members, the                                                        HyNet is to reduce carbon emissions from

                                                                                                                                                          E
                                                                         characteristics of the new energy consumer into next-generation                                                               Members heard from a number of influential
                                                                         strategies will influence how a provider identifies and approaches                             Forum provided an              speakers including;                             industry, homes and transport and support
                                                                         new market opportunities and, ultimately, determines its business                              opportunity for the industry                                                   economic growth in the North West of
                                                                                                                                                                       to engage with stakeholders
Time for change                                                          model.
                                                                                                                                                                     across heating and energy,
                                                                                                                                                                                                       Mark Wheeldon, SGN, who gave more               England. This project is ongoing. He also spoke
                                                                                                                                                                                                                                                       about HyDeploy, which has gained exemption
                                                                                                                                                                                                       details on their H100 project, which is
The current energy system was built to deliver reliability and low       With thanks to Accenture in the compilation of this article. Accenture’s     discussing current and future developments,      developing a hydrogen grid from first           by the HSE from the GSMR to enable them to
cost above all else, and energy providers have typically done well       multiyear New Energy Consumer research looks at emerging trends in           facilitating a unified and co-ordinated          principals rather than re-purposing the         blend up to 20 per cent hydrogen into the
in meeting those objectives. Historically, most have emphasized          energy and identifies new challenges and opportunities for the               approach to discussions.                         existing natural gas grid. This work is         Keele University network. Cadent are busy
the supply side of their business—offering standard customer             evolving energy marketplace.                                                                                                  progressing well and will give the networks a   obtaining the electrolyser and blending
service options and basic “fringe programs” for energy efficiency.                                                                                    Mike Foster,Chief Executive, EUA said:           better insight to the challenges of             equipment to be ready for the third stage of
                                                                         To find out more visit their website www.accenture.com/gb-en/insight-                                                         transporting and distributing hydrogen.         the project which is the live operation of a large
Energy providers have not historically been designed to provide          utilities-new-energy-consumer-2017                                                                                                                                            section of the network, starting next summer.
differentiated customer service or to support innovative energy-                                                                                                                                     Dr Charlie Dunnill, Swansea University gave a
efficiency programs at scale to the mass residential market. But
this well-reasoned structure fails to work in a digitalised and
decentralised world.
                                                                                                                                                        “
                                                                                                                                                        ‘        There are a number of
                                                                                                                                                        projects being undertaken across the
                                                                                                                                                                                                     presentation  on using hydrogen to generate
                                                                                                                                                                                                      electricity as well as producing hydrogen
                                                                                                                                                                                                        from electricity, both using types of
                                                                                                                                                                                                                                                       Oujen Hodjati-Pugh from The University of
                                                                                                                                                                                                                                                       Birmingham presented on the work they are
                                                                                                                                                                                                                                                       doing on solid oxide fuel cells and the
                                                                                                                                                        industry all aimed at reducing the carbon         electrolysers. As a simple demonstration     difference between low temperature and high
On the demand side, consumers also have been passive in their                                                                                           emissions of gas – from biomethane                 they brought along a bicycle which had      temperature versions. Fuel cells are a realistic
interaction with energy providers. Viewing energy as a basic                                                                                            injection to full scale hydrogen conversion.        a generator on the back wheel that         option going forward and the use of materials
service, they maintain a “low-value” relationship with their energy                                                                                                                                         produced electricity and then using an     other than expensive platinum seems to be
                                                                                                                                                        Our members are leading the way through
providers. Typical consumers interact with their providers just a                                                                                                                                           electrolyser, produced hydrogen.           increasing, which should help in reducing
few times each year. Research shows that the fundamental
                                                                                                                                                        innovation, and recognition that in order to                                                   costs.
                                                                                                                                                                                                            Some members had a go at
relationship between the consumer and energy provider has                                                                                               decarbonise heat affordably and without            producing hydrogen bubbles.
evolved at a very slow pace.                                                                                                                            the need for homeowners to change                                                              The final presentation was from Martin
                                                                                                                                                                                                                                                       Sperrink, Northern Gas Networks on the H21
                                                                                                                                                        their heating systems, the UK must                  Andy Lewis, Cadent gave an update on
Helping consumers manage and optimise their energy usage                                                                                                                                                                                               project which is gathering pace and more
                                                                                                                                                        green the gas in the grid.”                       HyNet, a hydrogen energy and Carbon
requires a new kind of relationship between the energy provider                                                                                                                                                                                        detailed planning is underway.
                                                                                                                                                                                                       Capture, Usage and Storage (CCUS) project
and consumer. Take the UK smart metering programme. This

                                                                                                                                                                                               ”
                                                                                                                                                    H yd ro g en                                       in the North West of England. The goal of
                                                                                                                                                                 fo                                                                                    Keep a look out for details of the next Forum
depends on significant levels of consumer participation and                                                                                         a lo w ca rb r
                                                                                                                                                                 on                                                                                    which will be communicated soon.
success hinges on scalable consumer adoption. This presents                                                                                            fu tu re
several unique challenges. Simply installing smart metering
devices and in-home displays will not drive lasting consumer
adoption. Energy providers must develop a more                                                                                                                                                                                                                H1
comprehensive competence in consumer energy support to
tailor products and service channels accordingly. Successful
energy providers that understand and leverage consumers’
perceptions, behaviours and values are the ones that will
ultimately generate the most value and achieve high
performance in the new energy era.

Energy policy and regulation has also been built around the
historical structure of the energy sector - gas or electricity, supply
or demand, efficiency or low carbon, renewables or fossil fuels.
However, customers think differently. They think in term of
warmth, mobility and power. A warm home or workplace is a
result of both building efficiency and the heating system, and the

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L E A D I N G                       V O I C E :                 L I V            H O V E M

                                   Leading
 people
                                     voice                                                                                                                 personal
performance

                      comment

                                                                                                                                          strategy
              words

                                                                                                                                         times
                                                   growth
                                                  opinion       view
                                       vision  background
                                feedback business         speak
                                                                point

In this issue we talk to Liv HovemCEO of DNV GL – Oil & Gas
             iv Hovem is CEO of                                                                                     remain in pole position in the lead-up to mid-       Our role is to help our customers prepare for the

        L
                                                      automation, energy efficiency, electrification and
              DNV GL – Oil & Gas,                     carbon capture - these technologies are causing               century.                                             transition and to remove technical obstacles to the
                                                                                                                                                                         growth of gas.
              which is a global                       rapid changes for oil and gas companies and their
                                                      suppliers, so there’s always something new and                Oil and gas operations will become faster, leaner
             technical advisor
           working in partnership
                                                      interesting.                                                  and cleaner towards mid-century, as gas fuels the    What should companies do to begin
 with operators, suppliers,                           An important part of my role now is to help
                                                                                                                    energy transition.                                   their own transition and plan?                           About DNV GL
 governments and industry                             customers navigate the energy transition and to               Significant investment will be needed in gas over    The attention of boardrooms and cabinets should          DNV GL is a global quality assurance and risk management company providing classification,
 associations to support progress                     help the industry collaborate and build the trust             the coming decades to increase capacity,             be fixed on the dramatic energy transition that is       technical assurance, software and independent expert advisory services to the maritime, oil and
 across the entire gas value chain.                   needed to adapt to digital advances.                          transform assets and transport a decarbonised        unfolding. In 2017, more gigawatts of renewable          gas, power and renewables industries, as well as within management system certification services,
                                                                                                                    mix of energies.                                     energy were added than those from fossil fuels and       digital assurance and digital solutions across industries. We have operations in more than 100
 Career to date/working in this                       What’s been the most important                                                                                     this is reflected in where lenders are putting their     countries.
                                                      lesson learned?                                               There are some regulatory challenges to the          money.
 sector
                                                                                                                    market position of gas — such as carbon pricing,                                                              DNV GL Group AS is 100 per cent owned by a free-standing, independent Norwegian foundation
 I studied Civil Engineering at NTNU, and then        We cannot work in separate silos anymore. The                                                                      DNV GL’s recently published research ‘A test of
                                                                                                                    emission caps, and pollution regulation — which                                                               whose long-lasting purpose is to safeguard life, property and the environment.
 went to the University of California, Berkeley for   technological leaps mean industries that were                                                                      resilience: the outlook for the oil & gas industry’,
                                                                                                                    could pose risks to the future share of gas in the
 an MSc in naval architecture and offshore            previously separate have to work more closely                                                                      based on a survey of nearly 800 senior oil and gas
                                                                                                                    global power generation mix.                                                                                  Around 5 per cent of DNV GL’s annual revenue is invested into research and development. 60
 engineering.                                         together and learn from each other. We have to                                                                     professionals showed that half (51 per cent) of senior   per cent of the research and innovation activities are dedicated to digitalisation. We also drive
                                                      think differently about collaboration and system                                                                   industry professionals will focus on actively adapting
                                                      integration; it is critical to achieve our (climate) goals.
                                                                                                                    How is DNV GL responding to the                                                                               more than 100 joint industry projects (JIPs) in our industries annually, more than any other
 Prior to becoming CEO of DNV GL – Oil & Gas, I                                                                                                                          to a less carbon-intensive energy mix in 2019, up        organisation, adding to our openly-accessible library of more than 170 industry standards,
                                                                                                                    energy transition and the pace of                    from 44 per cent last year. While momentum for
 was head of Continental Europe, the Middle                                                                                                                                                                                       recommended practices and technologies to advance safety and efficiency in a broad range of
 East and India at DNV GL – Oil & Gas,                DNV GL’s 2018 Energy Transition                               change that is being experienced?                    long-term decarbonisation is building, DNV GL’s          technologies.
 headquartered in Milan. I have also worked in        Outlook shows major implications                              Not long ago, the industry regarded the energy       research indicates that companies today are more
 the Maritime sector for many years.                  for all industries. Can you share                             transition as a transformation on the horizon,       likely to be doing so because they are told to, rather   The company operates 14 laboratories across three continents, combining advanced testing with
                                                      some of the key trends emerging                               however it has become clear that this significant    than because they want to.                               technical expertise and industry standards to help customers apply technology safely, efficiently
 It was never the plan to stay at DNV GL for 30                                                                     change is already upon us and it is influencing
                                                      for our readers and outline how this                                                                               Regulation topped the list of factors most likely to
                                                                                                                                                                                                                                  and cost effectively.
 years, but I have been given so many                                                                               the entire oil and gas value chain. DNV GL serves
 opportunities.
                                                      will impact the gas industry                                  both the renewables and oil and gas industries.      drive oil and gas companies to decarbonise their         In the oil and gas industry DNV GL has been involved in developing game-changing
                                                      Our Energy Transition Outlook (ETO) forecasts that            For us, and for many of our customers, the           operations in 2019. The energy transition and ‘doing     technologies such as the intelligent pig, polyethylene piping and the condensing boiler.
 There are so many fascinating things going on        natural gas will rapidly overtake oil to become the           energy transition itself is the greatest source of   the right thing for society’ came in ninth and tenth
 in the industry right now: digitalisation,           world’s primary energy source in 2026. It will then           risk – and opportunity.                              place, respectively.

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