Water & Wastewater Treatment Magazine
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www.wwtonline.co.uk | WWT | FEBRUARY 2018 | 17 I N A S S O C I A T I O N W I T H ASK THE INDUSTRY On a scale of 1-10, to what extent do you think your industry is in a state of transi on? "Some businesses are clearly transi oning more than others. The industry itself is probably around 5 or 6. There are some that are resistant to new business models, there are others who are grabbing it with both hands. The key to success will be keeping that process in your own hands and taking the opportunity to lead the transi on rather than changes being force onto you." David Ellio , group director, strategy and new markets, Wessex Water "I would es mate the industry to be in transi on scale 10." Mark Smith, CEO, WRc "I would score this at a 6-7, especially on core issues such as customer engagement, resilience and the environment. But it really is a mixed picture across the industry." Ian Barker, managing director, Water Policy Interna onal "Moving from a passive to an ac ve network", "Moving from the tradi onal last century model of a centralised push u lity to a modern push/ pull customer centric business," "improved data quality, agile working, and fl exibility in the workforce," were three responses we received from those working in networks. "Energy as a service rather than selling KWh", was one of the many comments that came from genera on and retail – with "moving from a centralised genera on and single supply to more fl uid and decentralised transac on," coming through as another key theme. Meanwhile for water, "Delivering customer expecta ons in a cost eff ec ve and effi cient manner," was a comment that characterised many coming from the water sector where customer service came through as a key tenet of transi on. The survey found that while many businesses believe transi on is underway, there is not a sense of complete upheaval across the industry. Marked between 1 and 10, the average state of transi on in u li es scored 7.1; with the average for individual businesses, scoring 6.7. Energy genera on & retail was the only category where respondents scored the state of transi on in their businesses (7.6) as being highly than across energy genera on and retail as a whole (7.3). Looking ahead to 2030, the UWL survey also inves gated to what extent businesses are expec ng to transi on over the next decade. The current average state of transi on of 6.7, is expected to rise to 8.0 by 2030. Overall, businesses an cipate their state of transi on will be more aligned with the industry as a whole by 2030. The survey found that on average businesses expect the impact of industry trends driving transi on to be 23 per cent higher in fi ve years' me. Key trends considered to be the major drivers for transi on include compe ve pressures (6.4 now vs. 7.0 in fi ve years), changing customer expecta ons or habits (6.1 vs. 7.4), changing policy and regulatory framework (6.1 vs. 7.2), sustainability considera ons (5.7 vs. 7.1), big data (5.6 vs. 7.1), smart meters (4.8 vs. 6.0), electric vehicles (4.2 vs. 6.3) and M&A ac vity (4.1 vs. 4.9). Other trends that are likely to drive transi on include climate change and step changes in sustainability, as well as changes in Government, changes in workforce and convergence of services. Headline trends rela ng to new technologies are likely to include the digitalisa on of energy, the Internet of Things and augmented or virtual reality. New technologies an cipated to facilitate transi on across all u li es include data analy cs, smart grid technology, water metering, water reuse, blockchain, robo cs and low carbon heat. Across all of the technologies surveyed, the average pping point for mass take up is expected to be 2027. THE SHAPE OF WATER With Ofwat preparing to publish its ini al assessment of business plans as part of the 2019 price review (PR19), the issue of transi on and planning for future challenges is understandably high on the water agenda. But what does this period of change and its resul ng uncertainty mean for water companies in real terms? The publica on of Ofwat's methodology for the 2019 price review (PR19) centred on four key themes that represent a step change for water companies and how they deliver for their customers, now and in the future. The regulator outlined the four pillars of the methodology as great customer service, long-term resilience, aff ordability and innova on. These core tenets are o en at the heart of any discussion around the concept of transi on in the sector. But transi on in theory is very diff erent to applying the themes in real terms to everyday business decisions that aff ect customers across the country. The UWL survey took an in-depth look at the state of transi on across the sector and some of the major barriers that risk impeding progress for water companies. Currently,