The EIC (Energy Innovation Centre), in collaboration with the energy networks, recently published its Innovation and Industry Charter, designed to further support SMEs bringing new innovations to the networks.
It came about following surveys with SMEs, which found over a third of them experienced challenges at procurement and 41% found the procurement process “prohibitive”.
Three actions covering creating a single innovator engagement platform, a unified set of guidance on project lifespans and the simplification of the stakeholder engagement process were identified.
Current± spoke to Denise Massey (DM), managing director at the EIC, and Ian Cameron (IC), head of customer services and innovation at UK Power Networks, about the need for the Charter and what the next steps are.
What led to the decision to do the surveys and later create the Charter?
DM: The reason [the EIC] was brought about was because the large energy companies recognised they couldn't work with small businesses, because small and large businesses don't actually work well together. It's not unique to this industry; it's just the nature of how business is.
As we've gone on, we've wanted to get to know more and more about the challenges that SMEs and small innovators have in trying to access industry. Prior to 2017, we'd done it very much by word of mouth and learning by experience through working with the SMEs. We wanted to get under the skin of that in 2017.
So in 2017, that was the first time we did a survey. . . then in 2019, we did a survey again and the feedback we got was that yes, we're getting better, but still some really big key issues that we need to get going on as an industry. That’s why we came together and formed a charter.
What issues were SMEs running into prior to this that were acting as blockers to the integration of innovation within DNOs?
IC: Not too long ago, every time you engaged with a different company, it might need a different level of procurement involvement or it might need a different contract for an SME. If you think from their point of view, they're trying to invent a product that would be applicable across all the DNOS and so it can become quite challenging where we’ve all got different processes and some of those'll be different in terms of pace, some of them being complexity etc. It's no small feat to try and get all those companies to do it in the same way, but we've seen some fantastic movements in the last 12 months or so.
Why is it so important to create a charter committing to help support innovators?
IC: In the old era there was this view that you just manage the energy system, but now you've got transport to consider and you've got heat to consider. There's a changing regulatory environment around us and a high level of digitalisation going on around us as well that we are trying to adapt to. Our customers are expecting more from us, and on top of that there’s disruption, which includes COVID-19. It's now more than ever that we need the wider critical mass of innovation to help us challenge ourselves and support ourselves in these challenges.
Over 75% of our innovation projects in UKPN involve some form of SME or third party to help us deliver. That tells me as a leader of that business, I can't do it without them. But if I'm not managing that relationship, as a senior leader, I'm at risk of that pool either focusing elsewhere ,or that value that I'm getting through that collaboration or that relationship diminishing.
Is this a complete fix for the problem or is it the first step in a longer journey?
DM: It's not a silver bullet, and it's not the first step.
The charter is to me a real clear indicator from the CEOs that they are serious about this [and willing] to come together to increase pace of innovation and make it easier for these small businesses to work with them.
IC: Ultimately, this is the first cultural step from the top, and it's by no means the only step but it is a big step for us as an industry. It almost creates the roadmap for breaking down some of the further barriers as we go, because we will do this annually and on an annual basis we will make a commitment with the EIC that these are the actions we're going to do to make ourselves better, make ourselves more accessible, etc. It’s a first step, but I would say that there's multiple steps to be had.
DM: What we do see in the industry now is it is a cultural transition. It's a cliché, but it's not just a destination, it's a journey. So this is, you know, one of many steps that will need to be taken and at pace.