Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/1171270
24 | 27TH SEPTEMBER - 3RD OCTOBER 2019 | UTILITY WEEK Operations & Assets Analysis L ast week we saw yet another record-breaking climate change protest sweep across the UK as hundreds of thousands of people walked out of work or education in support of Swedish schoolgirl Greta Thunberg's global climate strike. With such phenomena becom- ing almost commonplace, and a binding net-zero emissions target now in place for 2050, it is incumbent on utility sec- tor leaders – across both companies and reg- ulators – to take a moment to take stock and challenge whether their organisation is truly doing the most that it can to answer the pub- lic cry for stronger action against the threat of climate change. At Utility Week Congress 2019 (in Bir- mingham, 8-9 October), we will capture that moment. With keynote presentations, live interviews and debate sessions including participation from the Department of Busi- ness, Energy and Industrial Strategy (BEIS), both Ofwat and Ofgem's chief regulators and a smorgasbord of prominent industry chief executives, the two-day event will undoubt- edly attract some controversy. We hope too that it will spark inspiration and momentum across the sector as com- panies square up to their inherent respon- sibility to forge the more sustainable and resilient utilities of the future that climate change demands. But even as executives acknowledge the overriding imperative of climate change as a driver of future strat- egy, we can't ignore the fact that today's market is hurling pres- sures at ' rms that also demand immediate attention and resource. Regulated monopolies across the energy and water sectors are at critical moments in the relent- less cycle of their price controls. Dissent is swelling in the ranks as regulators continue to deliver promises for the toughest determinations yet, with some water compa- nies claiming Ofwat's dra" determinations will leave them unable to make the invest- ments that long-term resilience and sustain- ability require. Meanwhile, the energy retail market is in turmoil with insolvencies at the bottom end of the market and major deals fundamen- tally altering the shape of the market at the top as players seek elusive economies and slivers of extra margin. And water retailers are struggling to over- come the friction points that were built in at market opening two years ago, leaving an important opportunity to facilitate step changes in non-domestic water e— ciency by the wayside, according to some in˜ uential market ' gures. Utilities must ' nd ways to overcome these immediate challenges and progress long-term interests in tandem. Utility Week Congress 2019 will surface the best opinion and example of how to do so. A Congress for climate and sustainability Next month's two-day Utility Week Congress will explore some of the key dilemmas assailing a sector buff eted by contradictory political, environmental and fi nancial pressures. Jane Gray chairs dayone. The resilience rollercoaster Utilities are getting used to battling the unknown, says Suzanne Heneghan, Congress chair on day two. It's just one year on from the October budget statement by Philip Hammond, the now ex-chancellor, which con' rmed that the National Infra- structure Commission would be examining the resilience of the UK's infrastructure. Since then we have seen key parts of our national infrastructure tested to the limits – not least the fallout of extreme weather in Derbyshire that saw freak heavy rainfall cause a reservoir dam to crumble. We have heard warnings from the chief executive of the Environment Agency that England's water supply is facing a "jaws of death" moment, that there will be short- ages within 25 years as the eŸ ects of climate change and the demands of a rising popula- tion nudges levels to tipping point. Even more dramatically, this has also been a year that has seen the biggest electric- ity network outage in decades. On 9 August a lightning strike triggered a chain of supply events that sparked signi' cant chaos for the National Grid Electricity System Operator and brought disruption to the lives and plans of thousands of people. It's all played out against a political landscape of a cabinet in chaos, a long- awaited energy white paper that never was, a parliament in meltdown and a Brexit row paralysing decision-making on big ticket investments and long term-planning. If that wasn't enough, this year has marked a historic, world-leading pledge by the UK to achieve net zero carbon emissions by 2050. The response to our now "climate emergency" places utilities at the heart of the piece and sees the rising case for more renewables on the grid already changing the generation mix forever. The challenge Utilities are getting used to battling against the unknown and operating in a state of heightened alert. But day two of Utility Week