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UTILITY WEEK | 7TH - 13TH AUGUST 2015 | 3 Leader Ellen Bennett This week 4 | Seven days 6 | People & Opinion 8 | Interview Juliet Davenport, chief executive, Good Energy 13 Policy & Regulation 13 | News Ofgem could give back £706m to networks 14 | Analysis New model Centrica 15 Finance & Investment 15 | News Gas storage is 'dead' without subsidy 17 | Analysis The future prospects for the Green Investment Bank 18 Operations & Assets 18 | Market view Heat and the connected home 20 | Game changer Upside's plans to use UPS for demand-side response 22 Customers 22 | News Smart meters delayed another four months 23 | Analysis Ofwat sets out its vision for PR19 and beyond 24 | Market view How far does the general public trust water companies? 26 Markets & Trading 26 | News National Grid looks to extend balancing 28 Community 28 | Analysis One month left to enter the Utility Awards 2015 31 | Disconnector Transformational change is here What will a successful UK utility look like in 2020? The answer is becoming clearer over the summer, as energy and water businesses alike position themselves for five years of transformational change. Here are five predictions for what we have in store in the second half of the decade: 1. Centrica chief Iain Conn went a step further than the CMA last week, effectively calling time on vertical integration with his announcement of a £1.5 billion strategy swing towards retail services. Centrica hasn't formally split out its fossil fuel generation yet, as Eon plans to do, but this can be read as a signal of intent. The split between the two functions of the traditional integrated energy business is likely to widen. 2. Indeed, the whole linear value chain is breaking down right across utilities. In energy, the potential for demand-side storage and aggregation is just beginning to be realised, with the market for domestic power storage exploding (see Game changer, p20). 3. The same is true in the water sector, where Ofwat has opened a discussion about water trading and upstream reform that could begin the disaggregation of the wholesale value chain as early as 2020. With pressure building on incumbent water companies to legally separate (news, p4), the notion of water retailers and water wholesalers will be commonplace by 2020. 4. Energy networks too must find their place in this brave new world. Gas and power networks can either embrace distributed energy, demand-side aggregation and battery storage, and use it for their own objectives, or get le behind by more agile market entrants. Increasingly, the networks are realising this, and by 2020 the pace-setters will be seeing the benefits. 5. Not every utility will survive. As the old value chains break down, business models will follow suit. Winners will emerge, having adapted to the new environment and absorbed their rivals in so doing. Pan-utility models are likely to have a role, as the old distinctions between energy and water become less important to retail-focused businesses. There will be losers too, with disruptive market forces coming from several angles. It's going to be an interesting five years! • Celebrating success, rewarding colleagues and inspiring your peers has never been more important. Take the time this summer to enter the Utility Week Awards 2015, and tell us how your business is preparing for the future. See p28. Ellen Bennett, Editor ellen.bennett@fav-house.com GAS 13 | News Fracking appeal could take 16 months 15 | News Gas storage is 'dead' without subsidy 26 | News Imports down in 2014 WATER 6 | Chief executive view Cathryn Ross, Ofwat 23 | Analysis Ofwat sets out its vision for PR19 and beyond 24 | Market view How far does the general public trust water companies? ELECTRICITY 8 | Interview Juliet Davenport, CEO, Good Energy 17 | Analysis The future prospects for the Green Investment Bank 20 | Game changer Upside's plans to use UPS for demand-side response 22 | News Tesla battery on sale in UK in early 2016 26 | News National Grid looks to extend balancing ENERGY 13 | News Ofgem could give back £706m to networks 14 | Analysis New model Centrica 18 | Market view Heat and the connected home 22 | News Smart meters delayed another four months Knowledge worth keeping Visit the Downloads section of Utility Week's website http://www.utilityweek.co.uk/ downloads Schneider Electric: Modicon M580. It's a revolution. Every time. http://bit.ly/1FZogqK Cognizant: Using Predictive Analytics to Optimise Asset Maintenance in the Utilities Industry http://bit.ly/1cBKZP0