Utility Week

In the build-up to U lity Week Live, we got to the heart of the ma er by surveying a endees of previous events, and readers of suppor ng publica ons U lity Week, WWT, WET News and Network, about the impact disrup on is having on their sectors. Our research shows that other sectors are a key area of concern. It found the most disrup on to the industry is expected from consumer-facing organisa ons such as Tesla, Google and Amazon, as iden fied in our recent Disrup on and Companies report (U lity Week, 26th January 2018). Notably, it was thought these companies would have the most disrup ve impact on networks and energy generators, where changing habits of supply and demand were also high-impact disrup on factors. Here, we look at the top five customer-led disrup ons to the industry in the next five years, according to the results of our exclusive survey, conducted in associa on with Harris 2. DISTRIBUTED GENERATION AND MASS TAKE-UP OF EVs Consumers genera ng their own power and using it to run electric vehicles (EVs) are two issues that go hand in hand, and have been significant for our survey respondents throughout the disrup on series. This long-expected trend has the poten al to disrupt exis ng business models within the energy value chain on a grand scale. First, it will require a huge rollout of new infrastructure, and second, it will poten ally see consumers become much more ac ve in their energy transac ons – genera ng, storing and using their own power in electric vehicles that double up as mobile ba eries. These localised, two-way energy distribu on pa erns will require wide-ranging changes to how the energy system is structured and operated. However, despite the hype about EVs, they have yet to hit the streets in numbers that would jus fy a massive infrastructure spend. But given the government's recent announcement that new tradi onally-fuelled cars will be banned from 2040, it seems inevitable that a pping point will come. The only ques on now is, when? 3. GROWING AWARENESS OF ENVIRONMENTAL ISSUES This was of most concern to our water respondents, who voted it 5.9 out of a possible 10 in terms of the disrup on they thought it would cause. This is par cularly interest- ing in light of the upcoming PR19 periodic review, which is due to set water companies far more chal- lenging targets on leakage. This is driven by growing customer awareness of water resources issues, including leakage and consump on, and customer irrita on at leaks not being repaired. Growing aware- ness of environmental issues is also driving a trend for water metering – o en controversial for water companies – and abstrac- on reform. 1 HIGH EXPECTATIONS FOR SPEED AND EASE OF COMMUNICATION This came out head and shoulders above the rest in our research, and with good reason. Many large organisa ons struggle to cope with the rapid pace of technological change, in part due to costly legacy systems, which are expensive to maintain, update and replace. But not keeping pace with the technological change customers are seeing elsewhere, such as in retail and telecommunica ons, risks leaving them angry and frustrated – the last thing any monopoly provider wants. While in the compe ve markets, failing to meet customer service expecta ons leaves larger opera ons vulnerable to disrup ve new market challengers. Although high customer expecta ons were noted across the board, it was the water sector that considered these expecta ons to be most disrup ve, ra ng them 6.5 out of a possible 10. As ver cally integrated monopoly u li es (aside from the non-domes c retail market), water companies have to marry their tradi onal engineering and asset-based wholesale businesses with more nimble, agile and customer- centric retail opera ons – a ba le many are finding hard. This no doubt plays into the current legi macy debate, being led by Ofwat and environment secretary Michael Gove. I N A S S O C I A T I O N W I T H UTILITY WEEK | 4TH - 10TH MAY 2018 | 7 I N A S S O C I A T I O N W I T H

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