Utility Week

w w w . u t i l i t y w e e k l i v e . c o . u k cost and concluded it could cost up to £90 billion. On top of that, the SMF es mates the government would also have to pay out £100 billion to meet the industry's investment needs over the next 25 years. Much to the chagrin of u li es leaders, however, polls and consumer surveys show strong public support for rena onalisa on. In recent research conducted by U lity Week in partnership with Harris Interac ve, over a third of respondents said they supported the concept for energy and a similar propor on advocated it for water. Earlier research conducted by Conserva ve think-tank Populus in September 2017 showed even stronger public support for rena onalisa on. According to the poll, 83 per cent of consumers felt na onalising water would be a posi ve step, and 77 per cent supported bringing Na onal Grid under public ownership and crea ng a new set of regionally- focused public energy supply companies. With the popularity of the current government eroding, the likelihood that Labour will get a chance to make good on its promises is increasing – and credit ra ngs agencies such as Moodys and S&P Global have correspondingly issued statements warning of a nega ve impact on investor confidence in UK u li es as secure defensive stock. It's not only Labour that poses a threat to established u li es. Other bodies too are calling for the overhaul of the ins tu onal organisa ons that govern the sector and are challenging assump ons about the structure of the market. Dieter Helm's cost of energy review, Imperial College's "Reshaping Regula on" report and the Future Power System's Architecture project – run by the Ins tu on for Engineering and Technology – all call for a fundamental rethink of energy system governance arrangements in order to open up distributed flexibility opportuni es. Conclusion U lity Week Live's survey shows that concerns about regulatory stability abound. The growing urge for poli cians to intervene is disrup ng not only the energy retail market, but also water companies and energy networks, which have tradi onally been more sheltered. Today, ques ons over public trust and legi macy mean poli cal influence over the shape of regulatory frameworks is keenly felt. Responses to the survey show a low level of confidence from u li es professionals in the ability of regimes such as PR19 and RIIO to con nue delivering the outcomes the sector needs while responding to heightened poli cal pressure. There is (marginally) more confidence in the RIIO regime to accommodate the scale of change facing networks than there is in the PR19 framework to accommodate the change facing water companies. In the face of this disrup ve environment, the best course of ac on, says Richard Khaldi, water sector expert at PA Consul ng, is not to resist change, but rather see this me of regulatory uncertainty as a call to arms: "Companies must focus on driving value from disrup on and not be passive par cipants. They should push the regulator to adapt the regulatory regime to accommodate the new business models needed to deliver for customers going forward. Companies should be demanding of their regulator just as customers are demanding of the companies." Survey responses show many u li es are ready to answer this call, recognising the benefits of crea ng more agile business models and inves ng in innova on. At U lity Week Live, industry professionals with a zeal to successfully ride the wave of disrup ve change sweeping the sector will gather to share their strategies, express their concerns and catalyse thinking on poten al solu ons to transforma on pain points. I N A S S O C I A T I O N W I T H UTILITY WEEK | 6TH - 12TH APRIL 2018 | 11 I N A S S O C I A T I O N W I T H

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