Utility Week

UTILITY Week 31st October 2014

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

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6 | 31st OctOber - 6th NOvember 2014 | UtILItY WeeK People & Opinion Utility Week community Conference report Utility Week Congress "This is an ambitious target that will have an impact on businesses' energy bills and ultimately the bottom line" Wayne Mitchell, head of Npower industrial and commercial, responds to new EU Climate Change targets. See more, p16 Smart metering and customer service, business model transformation and the regula- tory environment. These were some of the talking points that captured the attention of utility leaders at the recent Utility Week Congress in Birming- ham, attended by some of the industry's most influential individuals. The conference was opened by Amber Rudd MP, parliamen- tary under secretary of state at the Department of Energy and Climate Change. Reeling off renewables investment figures, Rudd outlined an ambitious government vision for energy policy and how it should support a more dynamic and competitive energy sector in the UK while also safeguard- ing security of supply. She explained how inspiration was being taken from the US "D3 agenda" for distributed, community-driven energy generation, which should drive down the cost of energy. While this vision was recog- nised by delegates, conversa- tions in networking sessions reflected a view that the scale of distributed generation, demand response and commu- nity energy systems envisaged by Rudd was "some way off ". More immediate require- ments for reform of customer interaction processes, business infrastructure and the regula- tory context, drove the majority of debate that followed over the course of the next two days. Ofgem chief executive Dermot Nolan's promise that the regulator would shi to a less "invasive" and more "principles-based" regulatory approach peaked interest, as did questions over trust and access to data aer the rollout of smart metering. In a question and answer session, Nolan expressed doubts about whether the smart energy codes being developed to govern supplier interaction with the smart meter system were "fit for purpose", but he said he had confidence a simplified system of codes and principles-based regulation could work well together. Later smart meter discussion clearly defined fail- ing industry trust as a limiting factor for technology optimi- sation, and a potential weak point that could allow third parties to capitalise on smart meter value. Not all the talk was on energy, however. A strong interview session between Utility Week editor Ellen Ben- nett and Ofwat chief executive Cathryn Ross ran through the implications of PR14 and the challenges expected in AMP6. Ross said the PR14 process had taught Ofwat some important lessons about how to conduct "conversations" with busi- nesses in the water sector. Recent and ongoing change in the sector make the need for close communication and understanding between the regulator and industry essential – as Tom Conway, executive director of United Utilities, made clear in a presentation about his firm's journey from utilities provision to service provision. He said this journey is not only about customer service initiatives, but address- ing resilience in a system facing unprecedented challenges from climate change, extreme weather and regulatory reform. Avoiding more capital expenditure, Conway explained that United is seeking to create flexibility and resilience in its asset base by imagining it as an "IS open architecture through which we can plug and play the capability of others in order to enhance our capability". Many more presentations over the course of the two-day conference defined the impera- tive for innovation through- out utility businesses, from infrastructure and internal data-handling technologies through to customer service. It is a challenge surrounded by questions over trust, change and resilience – three themes that will sit at the core of the agenda at Utility Week Live in April next year. Giving energy to the economy At energy UK's annual confer- ence last week, outgoing chief executive Angela Knight said: £25bn amount the energy sector contributed to the UK economy in 2013 £71bn additional value generated by the supply chain £96bn total economic impact of the energy sector in 2013 £6bn taxes paid to the exchequer in 2013 680,000 people employed in the UK energy sector story by NUMbErs 60 62 64 66 68 70 72 74 76 78 80 82 Intention to remain a customer 8.6 8.2 7.8 7.4 7.0 6.6 6.2 5.8 5.4 Northumbrian Dwr Cymru Yorkshire Anglian Water British Gas SSE Eon Wessex Water Severn Trent United Utilities Southern Water Npower Scottish Power EDF Energy Scottish Water Thames Water NIE First Utility South West Water Jo Causon, chief executive of the Customer service Institute, showed the return on investment of customer service in her presentation UK customer service index

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