Utility Week

UTILITY Week 30th June 2017

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

Issue link: https://fhpublishing.uberflip.com/i/842661

Contents of this Issue

Navigation

Page 8 of 31

The Topic: Flexibility UTILITY WEEK | 30TH JUNE - 6TH JULY 2017 | 9 FLEXIBILITY THE TOPIC change to business models is likely to fol- low the changes to the wholesale market. In energy, networks are beginning to come up against the restrictions of their licences, and are responding by both developing activities outside the licence and seeking reform of the licence and clarity over their potential role in markets such as storage. All this and more was on the agenda at Utility Week Live 2017, the UK's leading utility conference and exhibition, held at the NEC Birmingham in May. The following pages contains some of the best of the in- depth presentations and discussions there. WHAT'S IN THIS ARTICLE l Whole system solutions, p10 l Storage, p11 l RIIO, p12 l Water, p12 l Gas, p13 l Green gas, p13 l John Russell, Ofwat p14 A s energy companies reshape themselves in response to radically changing patterns of generation and consumption, flexibility is paramount. Flexibility has become a buzzword in power, where it refers specifically to the transformation of the power system via stor- age, demand-side response and intercon- nection. Yet it is equally applicable in gas, where the adaptability of the UK's gas infra- structure to new, greener uses is giving it a renewed impetus; and in water, where tra- ditional, vertically integrated companies are beginning the process of disaggregation that took place in energy two decades ago. A number of new markets are emerging across utilities, including: l Storage. The storage of power is increas- ingly seen as the silver bullet that will enable the transformation of the power system. Owning and operating storage is one of a number of new markets emerg- ing at the edge of the power grid – and the ability of traditional utilities to play in this space is yet to be determined. l Demand-side response. The identifica- tion, aggregation and selling of capac- ity secured via demand-side response is a nascent but growing business. As with storage, it is not yet clear what role energy networks can or will play in this new market. l Non-domestic water retail. The non-domestic water market opened to competition on 1 April, necessitating fun- damental structural change among water companies, which have had to split their retail and wholesale operations for the first time. Many water companies have separated out their non-domestic retail businesses altogether, putting them out- side the licensed business, and a number have sold them off. l Water wholesale. The water regula- tor, Ofwat, has made it clear that market forces will be introduced in key parts of the wholesale water business to drive efficiency and innovation. These include sludge, which will operate under a sepa- rate price control from the next price review, PR19, and the competitive pro- curement of major capital projects. In response, utilities are developing a range of new business models. In water, companies have been obliged to separate their retail and wholesale arms, and further Today's utilities need to be respon- sive and adaptable Report sponsored by: "New pools of financial value that require business model innovation or new investment add up to 30 per cent of the market by 2050, so we know that there's going to be a lot of business model churn." • Dr Stephen Hall, University of Leeds

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 30th June 2017