Disable your ad blocker to enjoy the full interactive features of this document.
Insight
Can DSOs put the customer first?
SSEN’s advisory board chair is challenging DSOs to rethink how close they are to customers, and we round up our recent series of reports produced with the network on the future of the operator.
“It’s the end of the beginning of the transition. And now we’re getting into the really fun stuff.”
Gareth Miller, chair of the SSEN advisory board
“It’s the end of the beginning of the transition. And now we’re getting into the really fun stuff.”
Describing the formidable challenges facing DSOs as ‘fun’ might not be for everyone. But it soon becomes clear that Gareth Miller, chair of the SSEN advisory board, has a glass half full perspective when it comes to decarbonising the economy. And as someone who’s worked in energy in a variety of industry, policy and advisory roles, he has the experience to back the point up.
“It's tremendously exciting,” he enthuses. “It’s exciting because the gradient of the challenge has just got steeper as we move from decarbonisation of generation to creating net-zero homes and businesses. You can see that as daunting, or a prompt to use all the skills and capabilities we have developed over the past 20 years, plus plenty of new innovation, to come through it successfully.”
The advisory board is a check and balance for SSEN: a means of taking a step back from what Miller describes as the “whirlwind” of daily operation to look at the big picture.
Whether targets are the right ones, and whether they are being met.
Whether decarbonisation is being accelerated or hindered.
And perhaps most of all, whether customers are being served effectively.
“If you think about successful organisations in any sector, they identify who their customers are, think about their needs, particularly those that are underserved, and take action to serve them better.
“For DSOs, the regulatory framework takes you part of the way there, but I don’t think it takes you all the way to that mindset.”
He says DSOs have a golden opportunity to become more customer-centric organisations but have to grasp the nettle and change mindsets quickly. “I think most in the industry would accept more work needs to be done on getting closer to customers, understanding their needs and making sure they are served effectively, not just by network companies but by suppliers.
“I don’t think this is unique to DSOs: but given the enabling role DSOs can play for a range of stakeholders to deliver for customers, it is vital DSOs further develop that customer-centric mindset as part of their DNA, recognising the variety of customers they serve.”
Who are my customers – and what do they want?
So how might DSOs go about having a laser-like focus on customer service in the transition? For one thing, they shouldn’t be making assumptions about what customers want. “The first step in understanding customers is to speak to them, actively listen, including really understanding barriers to participation in different aspects of decarbonisation.”
SSEN’s DSO team, for example, has developed customer personas internally to “build a picture of the plurality of customers they are serving”, points out Miller.
While it is obviously crucial that networks continue to supply electricity efficiently, securely and safely, DSOs will increasingly need to engage on a human, and not just asset, level. “We need to think about the hopes, aspirations, dreams, fears and motivations of all of the customers on the network. What do they need from us?”
For example, customers may want to get involved in the energy transition, but not know where to start. Local authorities may want to plan better for net zero, but not be
aware of best practice among their peers. Service providers may have an innovative idea for flexibly serving customer and network needs, but not know where best this might be deployed on the network.
A switched-on DSO would assist those types of journeys, becoming an enabling partner for reducing cost and emissions.
“I think recognising that this is about more than just choices between network investment and flexibility solutions is key. A binary approach has limitations given the diverse demands of network users.
“This is about having a customer-centric mindset as opposed to an infrastructure-centric, or procurement-centric, mindset. Where it’s less about the engineering, and more about the customer. Where engineering is flexed to facilitate better customer solutions, not the constraint around which customers are asked to bend their needs.”
Going beyond the regulatory treadmill
This shift requires an effort on the part of DSOs that is led from the top. “SSEN’s DSO management is up for that: they are not paying lip service to it,” believes Miller.
“I think there is an authentic desire to be challenged. The danger in business is you get caught up in the whirlwind of day-to-day operations. It’s important to have a group of people [the advisory board] to remind you to step out of that and look at the bigger picture.
“It’s early days, but our interactions with the SSEN management team have been constructive. They are open-minded, willing to listen, and they are taking onboard our advice.”
The advisory board includes a range of skills, with some members particularly focused on the Just Transition, while others have economics and research backgrounds. There are also people around the table from National Grid to pass on TSO experience and best practice to their counterparts at the network.
“This is not a talking shop. We intend to make a real difference. We have specific questions in mind tagged to SSEN’s DSO strategy, that if answered, we think will genuinely help SSEN become a better DSO.”
Doing so also means moving beyond the immediate demands of the regulatory environment, which Miller describes as a “treadmill”.
“It's quite difficult when you’re on that treadmill to to sit back and take stock. You may be doing everything according to regulations and licence obligations, but there are bound to be other activities or goals that could have big impacts, and the risk is they get being pushed aside in the constant running of the regulatory laps.
“I would say we are challenging SSEN to take a broader perspective, one that is ‘outside-in’ and led by what customers and the market require – and not just ‘inside-out’ and driven by regulatory compliance.”
