Utility Week

UTILITY WEEK | 20TH - 26TH SEPTEMBER 2019 | 23 Operations & Assets Taking care of people is increasingly recognised as important for the develop- ment of a positive corporate reputation, for getting pro- jects started and delivered more efficiently and effec- tively, for developing and recruiting quality employees, and in some cases for per- mission to operate. Why the change? For years, the supply of services and goods has been informed by what companies think people want or need. But social media has given a wide group of people the ability to say what they actu- ally want and need – which are sometimes quite different to suppliers' assumptions. In consumer markets, customers have always had the power to vote with their feet if they don't like the products, services or treatment they receive. In the utilities sector the seller-buyer relationship has been contractual, with consumers held captive. But now, in some markets, the digital revolution and new technologies are freeing people to buy services from other providers or become providers themselves. Responding to these social drivers isn't easy, because people are inher- ently complex and diverse. What is right for one community or sector isn't necessarily right for another. It requires companies and those that advise and supply them to think and behave differently. Where utilities were until now focused on compliance with regulatory, technical or commercial require- ments, there are new social questions that utilities firms should consider: • Do people have good and equal access to the service provided and its benefits? • Are all elements of society asked about their prefer- ences and what matters to them; is decision-making based on information rather than assumption? • Do planned interventions create opportunity for affected individuals and communities, as well as to the organisation undertaking them? Are the benefits fairly distrib- uted? • Are the services and benefits provided resilient and dependable in the face of physical, eco- nomic and technological threats? • And in addition to the service provided, does the behaviour of the company, contribute to the physical and mental wellbeing of the individu- als and communities it interacts with? Answering these ques- tions is no simple task, but the key is to ask them in first place. Creating strong, sustainable businesses and delivering better services for communities depends on it. For more information, visit: www.mottmac.com EXPERT VIEW KERRY SCOTT, GLOBAL PRACTICE LEADER FOR SOCIAL INCLUSION, MOTT MACDONALD Turning the tables The success and sustainability of utilities hinges on their ability to deliver projects that are socially inclusive and equitable. It calls for new skills and behaviours. And the nature of the data-rich environ- ment, illuminated by insights from AI, will mean more consumers becoming active in their engagement with energy systems. No more just 'on' or 'off '. For example, they could take advantage of buying cheaper energy at off-peak times, dipping in and out of different supplies to get the best prices, and make more choices about the source of energy generation. There's the potential for AI to help suppliers better understand and make more reliable predictions of consumer energy behaviours and preferences, leading to more tailored offerings and deals. Other benefits for industry include being able to have a stronger understanding of the supply from renewables, so forecasting likely changes in the variability of wind and solar from particular locations, across different seasons; and being able to support mainte- nance planning and resources by predicting when assets are likely to be deteriorating or will fail. Take-up of the opportunities from AI has been slow. The tech is there; some discrete projects have been started, with some indus- try discussions under way on how to opti- mise the UK's electricity system, for example. Ultimately it's a case of when the pieces will fall together in terms of external market pres- sures, commercial opportunism from new entrants, consumer demand and having established players willing to put resources behind a revolution in energy systems. The most likely push to the tipping point will come from the uptake of electric vehicles and mass electrification of transport, creating new problems from clustering of demand. The sticking point to progress may be in culture and access to expertise. The need for – and benefits from – radical change have to be recognised first of all. That will take a shi' in attitudes among leaders and managers. Then there's going to be the need to get on top of data, finding a way to get access to the full picture across the supply chain, with col- laboration between generators and suppliers. The industry as a whole will have to upskill around data analysis and management. A challenge for the Internet of Energy when it comes, with all the commercial ben- efits and potential savings for consumers, will be ensuring it also includes measures to help with social equality. Groups less able to be flexible in their use of energy will be dis- advantaged, and it will be important for the sector as a whole to show a lead in terms of social responsibility. Dr Nazmiye Ozkan, senior lecturer in energy economics and head of the Centre for Energy Systems and Strategy, Cranfield University  Join the big debate: Kerry Scott will be joining the New Deal for Utilities Debate panel this Wednesday, 25 September, in Westminster at RICS, Parliament Square. The panel will also feature Lord Deben, chairman of the Committee on Climate Change; Jonson Cox, chairman of Ofwat; Phil Jones, CEO, Northern Powergrid; and Michael Lewis, CEO, Eon UK. For more details about the event, from 5 to 7pm followed by a networking drinks reception, visit: https://utilityweek.co.uk/new- deal-utilities-debate

• Cover