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Disrup on: the results and why they ma er By Dr Simon Harrison, group strategic development manager, Mo MacDonald, and Energy Policy Panel chair, Ins tu on of Energy and Technology (IET) " This list reflects the range of views in the u lity sector regarding how radically energy in par cular but also the wider u lity space will be disrupted. If within the foreseeable future we see complete disrup on from the network edge, turning business models upside down across the whole sector, we might expect the disrup ve drive to come from companies currently marginal to the sector, or even players that we can't yet iden fy by name. If however we believe that progress will be in the form of con nuing incremental change from the status quo, then disrup on takes on a different meaning. It would then become much more about how exis ng or new entrant players can disrupt broadly within the exis ng governance and regulatory frameworks, and point to new entrant or exis ng suppliers and network companies. It's interes ng that the only water sector entry falls in this la er category. Meanwhile Na onal Grid is perhaps a special case, no ng its role as system operator, and its custodianship of what have become the standard scenarios to map electricity and gas industry futures. Looking back over the last few itera ons of those scenarios shows how far what was previously considered wacky has become core mainstream thinking, and how issues that were once new and marginal have come to dominate the agenda. So who is missing? Network companies (power, gas and water) are striking by their absence, except for Na onal Grid. Some might think that a poor reward for the innova on deployed via LCNI in recent years. But whilst many talk of the u lity death spiral, we've not yet seen too many signs of the radical reinven on of the network companies that some futures might demand for them to succeed as businesses. I know some of them are talking about it internally, but perhaps RIIO2 and AMP7, and delivering on the current price controls, are a dominant focus for most. And which form of disrup on would create the most value for consumers? A Silicon Valley- led energy revolu on would likely reinvent the consumer value proposi on in the hyper- connected and digital era, transforming the consumer experience in a posi ve way …for those consumers who want it. But it could also threaten resilience and increase network costs unless we adopt proper 'whole system thinking' and fix the governance to enable that. The more limited sort of disrup on could drive lower bills and be er customer service within the tradi onal set of u lity/consumer rela onships. But which of these do consumers want? I recently a ended the launch of the Material Cultures of Energy project at the Science Museum in London. This humani es-based research programme had looked at the societal response to historic energy transi ons to see what we could learn. One finding was that energy transi ons were messy, par al and proceeded haphazardly over many years. Some consumers benefited from the transforma on early on, but for many it was easier to transi on gradually with the old and new alongside one other for many years. But will the future be like the past? Nobody knows – but my gut feeling is that the tech company agenda will prove a more powerful engine for change than the u li es in the end – and quite possibly sooner and more disrup vely than we might expect. A Silicon Valley-led energy revolu on would likely reinvent the consumer value proposi on in the hyper-connected digital era, transforming the customer experience WHO: TESLA What's the deal: Founded in 2003, the American automo ve 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 residen al ba ery products, and says its ul mate 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 forecasted produc on plan was to be rolling out 500,000 vehicles a year by 2018. Why it ma ers: You won't be shocked to hear automo ve 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 ba ery storage solu ons. The company was said to be driving innova on, 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 leave others in their emission- free exhaust fumes. And if further proof of this were needed, last year Tesla won a bid to build the world's biggest lithium ion ba ery for South Australia, which has suffered a string of blackouts over the past 18 months – a radical and poli cally- charged move in a country that s ll relies on fossil fuels for two-thirds of its electricity. Say what?: "If their ba ery storage schemes went mainstream we would massively reduce our carbon footprint, and that's something we're more and more aware of." "The commercialisa on of energy storage is a game- changer for the sector, and disrupts every business model." – Survey respondents WHO: GOOGLE What's the deal: If you haven't heard of Google, the rock you've been living under must be very heavy, and there must be no Wi-Fi signal there. The brainchild of Sergey Brin and Larry Page in 1998, more than 70 per cent of worldwide online search requests are now handled by Google. Originally a web-based search engine, today it offers more than 50 internet services and products, from e-mail and online document crea on to so ware for mobile phones and tablet computers. Its 2012 acquisi on of Motorola Mobility meant it can also now sell hardware in the form of mobile phones. Google's broad product por olio and size make it one of the top four influen al companies in the high-tech marketplace, alongside Apple, IBM, and Microso . Why it ma ers: The internet giant's ability to glean and mone se data insight was noted as key, as well as its work with ar ficial intelligence (AI), and its poten al to become an energy pla orm in its own right – and as a result of all three, the capacity it has to offer innova ve new products. Say what?: "Google and Amazon feel like they are wai ng and seeing whether the energy sector looks appealing enough to make a true market entry. However, having spent many years circling the energy encampment, if they decide to pounce more aggressively through Google Home or Alexa the whole sector will be in for a shock. Owning no assets but millions of customers and without any reputa onal baggage, they could redefine the sector's business model, cas ng all the incumbents into the dark ages." – Laura Sandys, former MP, entrepreneur and CEO of Challenging Ideas 14 WET NEWS FEBRUARY 2018 P R E S E N T S

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