WET News

w w w . u t i l i t y w e e k l i v e . c o . u k TOP TEN COMPANIES DISRUPTING UTILITIES 1. Tesla 2. Google 3. Amazon 4. A company that doesn't exist yet 5. Water retailers 6. Small energy suppliers 7. Centrica/Bri sh Gas 8. Na onal Grid 9. SSE/Npower 10. Supermarkets WHO: AMAZON What's the deal: Amazon is best known for being an electronic commerce and cloud compu ng company. Founded in 1994, in Sea le, USA, the amazon.com website started as an online bookstore and later branched out into videos, MP3s, audiobooks, so ware, video games, electronics, clothes, furniture, food, toys, and jewellery – in short, diverse doesn't quite cover it. Amazon is the world's largest provider of cloud infrastructure services, and the fourth most valuable public company in the world. Why it ma ers: The company's poten al entry into energy retail and service provision is making big waves among those in the know. In 2015 the company launched a trial home services unit in the US and experts believe an interna onal expansion may be on the cards in the next couple of years, providing a challenge to exis ng energy retailers who are trying to find a new lease of life in the same market – for instance Bri sh Gas and its Local Heroes pla orm. Amazon is also the point of origin for Amazon Echo – or Alexa as the smart homes device has become more fondly known. Since its UK launch last year, Amazon Echo has come to dominate the market for smart home tech. And it has already collected energy related "skills" which help customers choose be er tariffs, monitor their energy use and manage costs. Say what?: "Quite simply they already have the ability to manage and analyse real- me big data." "They could move into offering bundled retail services that include water and energy." – Survey respondents WHO: A COMPANY THAT DOESN'T EXIST YET What's the deal: As technologies advance apace and the industry con nues to fluctuate and advance accordingly, there are inevitably new ideas, concepts and business models just around the corner – it is believed these will have a disrup ve impact on the energy market. Why it ma ers: The u li es industry is on the cusp of a period of great change – our growing and ever-diverse climate change challenges and targets will con nue to impact all u li es well into the future, heralding new approaches to resilience and sustainability – par cularly around urban and suburban areas with expecta ons for further significant popula on growth. Market evolu ons, meanwhile, are bringing opportuni es to shape and reshape the u lity arena with new business models, modes of compe on and consumer interac on. Although the fundamentals will remain unchanged – water, electricity and gas will s ll need to be provided to customers in the UK – the way the industry operates to deliver these modern life essen als will con nue to evolve. In the retail space for example, whole-house solu ons are surely just around the corner, and with the con nued growth of variable, low carbon and decentralised energy increasing the difficul es of managing the system, and the ingress of storage providing a poten al solu on, there are opportuni es for new business models across the sector. Similarly, the rise of the independent energy company has several by-products, such as energy price comparison websites. Say what?: "New technologies and ideas that we haven't even considered are likely to be just around the corner – the Uber or AirBNB of tomorrow is what will be making a difference in the industry." – Survey respondent WHO: WATER RETAILERS What's the deal: As of April 1 2017, all eligible businesses, chari es and public-sector organisa ons in England, regardless of the amount of water they use, can now choose who provides their water and wastewater retail services from the retailers serving England. If a premises is currently served by a supplier based wholly or mainly in Wales, it can only choose a water retailer if the business uses 50 million litres of water or more a year, in which case it can choose from one of the water retailers serving Wales. Businesses and organisa ons with mul ple premises, or those using large amounts of water, may consider 'self-supply', which requires a self-supply licence. Why it ma ers: A change in regula on surrounding the water industry may change water retailers' priori es, but the general consensus is that because they are driven by cost reduc on, the sector is ripe for – and will see – significant innova on in the years to come. Say what?: "There are tariff changes that water u lity companies cannot pass on due to regulator pressure – this will be disrup ve." "Private water companies will come to the fore, (for retail & domes c supply) because of the pressures on 'regional' water companies and the compe on for service providers." "Water companies have lost sight of their own purpose, and this will con nue to be increasingly disrup ve." "A change in regula on may change their priori es, but ul mately they are driven by cost reduc on, which is primarily leading to disrup ve innova on." – Survey respondents WHO: SUPERMARKETS What's the deal?: Supermarkets have long been a local focal point na onwide, but now rumours abound they could move beyond groceries and become energy producers, for both themselves and their respec ve surrounding communi es. There has been no official word on this to date, but it wouldn't take too much imagina on to foresee a me when lithium-ion ba eries in supermarket car parks could stockpile excess power generated by other systems in the building. Electric vehicle (EV) chargers could then distribute that extra power to customers who want to top up their car's ba ery while they shop, (which helps overcome the infrastructural limita on that is o en associated with public EV chargers). The surplus power could also be stored and used to light up the car park outside daylight hours. Alterna vely, supermarkets could create a new supplier model to power or even partly-power local homes and businesses – because as the not- unrelated saying goes, every li le helps. Why it ma ers: The supermarket of the future could transform the energy grid and poten ally help it to become safer, cleaner and more flexible. Supermarkets could become a key part of the decentralised energy system of tomorrow, and set a new standard for efficiency by sharing surplus energy with their neighbours, reducing energy costs and providing a backup power source. Say what?: "They understand their customers so much be er than many of the 'tradi onal' energy suppliers – they have near-daily access to consumers in a space where they're used to seeing new and affordable proposi ons, like homeware, travel money, banking. It just wouldn't be radical to see a supermarket-led energy proposi on, and obviously the economy of scale is on their side, so they could provide the service at a good price. It could happen." – Survey respondent FEBRUARY 2018 WET NEWS 15 I N A S S O C I A T I O N W I T H

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