Utility Week

w w w . u t i l i t y w e e k l i v e . c o . u k 5. THE DISRUPTION: PROSUMERS The rise of the prosumer is both a challenge and an opportunity for u lity companies. For water companies, prosumers could open the door to an era of enhanced engagement on issues like water scarcity. They might also provide an impetus for greater bundling of water services with broader, technology-enabled smart home services. It's in the energy sector, however, that the prosumer is having the most notable impact. Here, flexible energy technologies linked to consumer-grade control tools provide the scope for individuals and communi es to move off- grid. The prosumer concept is promp ng compe ve innova on, market reform and even fear of industry "death spirals". But U lity Week Live's research reveals the rise of the prosumer is also shaping the way in which supply chain partners to u li es see their future. Asked to what extent prosumer trends will impact organisa onal strategies in the near, medium and long term, supply chain respondents said they expect increasing levels of influence. On a 15-year me horizon, respondents rated prosumer impacts on business strategy at a significant 7.2 out of 10, up from a middling 6.5 out of 10 in the coming five years. Why it ma ers: In one sense, it's li le surprise to see the supply chain expects increasing levels of business impact from prosumers. It makes sense that suppliers are thinking about how they can support their major clients in developing and delivering new opera ng and services models that match these. However, the expecta on for prosumer-driven disrup on among supply chain partners may also hint at more disrup ve possibili es. For some suppliers, for instance, increasingly confident prosumers may offer the opportunity to develop direct rela onships with end customers, cu ng out the u lity middleman altogether. For example, increasing levels of investment in establishing independent energy communi es are already exci ng big providers of technology and asset management. A leader at one such er 1 u lity supplier recently told U lity Week that investment levels in micro-grid infrastructure and maintenance agreements have mul plied exponen ally in recent years and now represent a significant revenue stream. Furthermore, the same spokesperson said working with these prosumer communi es tends to be more exci ng than working with mainstream u li es, because there is greater openness to experimenta on and innova on. Another opportunity area for today's supply chain par cipants to usurp conven onal u lity-customer rela onships is peer-to peer trading. Retail market constructs, which create the need for an intermediary to purchase energy on the behalf of consumers and manage market risks for them, look cumbersome and unnecessarily complex in the shadow of technology pla orms like blockchain – a fact Ofgem has acknowledged with the launch of a workstream to look at alterna ves to the "supplier hub" model. Whether today's supply chain players have the appe te to seize these opportuni es wholeheartedly remains to be seen. But one thing's for sure, whether at one remove or directly, prosumer trends will have a defini ve impact on the whole u lity value chain of the future. I N A S S O C I A T I O N W I T H UTILITY WEEK | 20TH - 26TH APRIL 2018 | 11 I N A S S O C I A T I O N W I T H

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