Issue link: https://fhpublishing.uberflip.com/i/936447
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. In the short space 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 allow consumer goods retailers to enter into the energy market." "They are constantly researching and launching technology to control the home, so an energy proposi on is surely on the cards." "They could move into offering bundled retail services that include water and energy." – Survey respondents Disrup on: the results and why they ma er By Dr Simon Harrison, group strategic development manager at global engineering, management and development consultant Mo MacDonald, and chair of the Energy Policy Panel at The 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. 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. 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." P R E S E N T S NETWORK / 22 / FEBRUARY 2018