Smart Systems and Heat – a platform for innovators – by Phil New

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Energy Systems Catapult chief executive, Phil New, gave an introductory speech at ‘The Heat is On’ event held at the Royal Society, London on 15th November 2016 in collaboration with the Energy Technologies Institute.

By Phil New

Decarbonising domestic heat is a critical component in the necessary mix of measures if the UK is to meet its 2050 targets. Heating speaks to the very core of how we think about comfort in our homes. There is something very fundamental, and very personal, about it. Most of us are fortunate enough to take a comfortable home for granted and, of course we worry about people not being able to enjoy a warm home – in this country fuel poverty ranks alongside malnourishment in any hierarchy of deprivation.

It is curious that something that is so central to our lives is so poorly understood by most of the people who benefit from it. We get upset when it doesn’t work, or we think we are being cheated, but otherwise, we ignore it. But changing our energy use may mean having to change our habits, our behavior, or the fabric of our homes – things that go to the heart of how many of us establish our identity.

So changing the way that this cherished, precious, yet often overlooked service happens in each and every household in the country is a task that almost certainly has to encompass not only technical innovation, but also new thinking about the relationship between the energy system and the people who use it. And new thinking about the market and delivery structures to support these new relationships between household and provider.

At the Energy Systems Catapult we think that innovation is crucial if the energy sector is to transition – not just in heat, but in all elements. Like all Catapults, we have been set up to try to address the market failures that may be getting in the way of innovation.

One key issue is the lack of alignment on the way forward. We believe partly that this is due to the complexity of the system, and that the broader energy community is just starting to get to grips with understanding the whole system. Without this understanding it is very difficult for actors – whether policy makers, regulators, innovators, or industry players – to build confidence, and invest with confidence, in the future.

Another problem is the lack of an innovation runway – a clear path to market for new products and services. The issue here is the lack of sustainable market-based business models that can create customer pull. Business models informed by customer needs will enable better solutions and choice for consumers.

The Smart Systems and Heat programme (SSH) fits well with the Energy Systems Catapult. It is absolutely rooted in taking a whole systems approach and is exploring possible new business models. But SSH is not a silver bullet – problems of this complexity need the combined forces of actors across – and beyond – the sector, of established players and new entrants, if we are to get to a solution.

As our experience with SSH grows, it is becoming clearer that we are developing a set of platforms, insights and tools that can be of value to the sector as a whole in addressing the challenge. SSH is a vehicle for exploration and collaboration, accelerating innovation in three key ways:

  • It builds capability in better understanding the physical environment, modelling it, and so enabling Local Authorities and communities to develop effective energy strategies, laying out their own energy transition pathways, built around local priorities and physical realities.
  • It deepens our insight into the potential of the relationship between the energy customer and the energy supplier.
  • It will also create a dynamic whole-systems simulation to help stakeholders test and evaluate different models for ICT integration around new supply chains, business models and market platforms.

Increasingly we see SSH connecting with other work in the whole systems space – from the thinking on the future power system architecture, to the development of new ways of thinking about the house as a power station.

Our goal is that SSH develops into something that has value in its own right, but that also has value to anyone who wants to think about new technologies, new offers, new ways of working, and as something that can add value to other projects and programmes adjacent to it.