Utility Week

for new players – if proof were needed of this, just look at the army of independent energy suppliers steadily invading the centre ground of the retail market. If they get their way the big six will soon become the distinctly-average-sized six – or in fact five, once the SSE/Npower merger goes through, a move that in itself is set to cause disruption in the industry, if our survey responses are to be believed. 'Where are the u li es?' And as noted by the energy policy panel chair of the Institution of Engineering and Technology, Simon Harrison (see p14 ), water and network companies are striking by their absence (except for National Grid). He questions whether some might consider this a sign that the lessons learnt by network companies from innovation projects may not be being put to best effect. That is, of course, a matter of opinion – but what is unarguable is the need for change. As new business models rise to maturity, the door is opening for "asset light" intermediaries to make an appearance. So if there's one conclusion to be drawn, it is that utilities of all kinds must decide if they want to contest their traditional dominance or fall quietly by the wayside. Or as Laura Sandys, former MP, and now entrepreneur and chief executive of Challenging Ideas, puts it: "What we have learnt [in 2017] is that the old model is being well and truly tested by innovators. Reinvention or managing decline are going to be the big strategic decisions that will need to be made in boardrooms this year." 1. WHO: TESLA What's the deal: Founded in 2003, the American automotive developer has to date designed and manufactured three models of electric car. In sunny California it also produces solar panels and a line of commercial and residential battery products, and says its ultimate aim is a zero- emissions future. The company's Model S was the world's best-selling plug-in electric car in both 2015 and 2016, and at the beginning of 2017 its forecast production plan was to be rolling out 500,000 vehicles a year by 2018. Why it matters: You won't be shocked to hear automotive companies manufacturing electric vehicles (EVs) dominated survey responses, but Tesla was the name that cropped up most of them all, for EVs but also its battery storage solutions. The company was said to be driving innovation, which will encourage others to follow and challenge it. Formed in response to the mass recall of all General Motor's (GM's) electric vehicles, the company seems to know how and when to ride a trend – and how to leave others in its emission-free exhaust fumes. If further proof of this were needed, in December Tesla commissioned the world's biggest lithium ion battery, built for South Australia, which has suffered a string of blackouts over the past 18 months. It's a radical and politically charged move in a country that still relies on fossil fuel for two-thirds of its electricity. Say what? "With car manufacturers starting to create propositions for new vehicles inclusive of power consumption and packaged with home energy storage solutions, I wonder whether there are a few more names just outside the list, because EVs are – and will continue to be – big news." – Rob Doepel, EY, commenting on the results of the survey. "If their ba ery storage schemes went mainstream, we would massively reduce our carbon footprint, and that's something that we're more and more aware of." "They could reduce the requirement for network infrastructure and energy retail, which would change the ball game completely." "The commercialisa on of energy storage is a game- changer for the sector, and disrupts every business model." "The market launch of new technologies such as EVs and Powerwall will have a radical impact on both genera on and consump on, as well as DNOs." "Energy use will slowly move away from fossil fuels and towards electricity, and Tesla will set the standards for that." "They will drive innova on and compe tors will follow, even if the economics don't ini ally appear to add up." – Survey respondents Tesla is driving innovation, which will encourage others to follow and challenge it I N A S S O C I A T I O N W I T H UTILITY WEEK | 26TH JANUARY - 1ST FEBRUARY 2018 | 11 I N A S S O C I A T I O N W I T H

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