The risks of cyber-attack, slow policy development and supply chain vulnerabilities as a result of rising geopolitical tensions on a global stage now sit at the top of utilities sector risk register according to a landmark research report published by Utility Week.
The UK Utilities Risk Report, created by Utility Week Intelligence in association with professional services firm Marsh McLennan, gives a detailed account of the sentiments of industry leaders towards a range of major risks facing the sector over the next five to 10 years.
Now in its third year, the latest risk report shows that rising political tensions at home and abroad, combined with continued efforts from utilities to access the benefits of technological advances and digital innovation, have pushed concerns about cybersecurity, policy agility and supply chain resilience ahead of last year’s top risk – extreme weather – and its impact on infrastructure and service delivery, though this risk remains high on the agenda. One senior commentator in the report endorsed its findings as reflective of a world which “feels more volatile”.
Speaking at a launch event for the report at the House of Commons, Basil Scarsella, chief executive of UK Power Networks, said it provides “a helpful addition to the toolkit for senior leaders in utilities in a complex world”.
He added: “I would expect the report to be a reference point for a number of us as we ensure that the risks in our organisation’s risk register match those identified by the report.”
Another attendee at the report’s launch event, Giles Stevens, director of regulatory strategy and innovation at Thames Water added: “The launch of this report is extremely timely. Demonstrating the varied and important risks that the utilities sector face, and because the report is in its third iteration, how the relative weightings of those risks move over time and within sectors.
“It’s clear that more in depth and better risk management – especially as systems necessarily become more integrated and we need increasingly more strategic investment – will be essential in the years to come. I am already looking forward to see how things will change in next year’s report!”
Reflecting on the significance of this year’s research findings in the foreword to the UK utilities risk report, Carl Ratcliffe, utilities practice leader, and Ben Brennan, client relationship leader at Marsh McLennan, said: “An unpredictable and politically charged market environment is testing the resilience of the industry.
“Cybersecurity threats, geopolitical volatility, climate change, and regulatory policies are dominating concerns. This report highlights that the way senior leaders manage interdependent risks and effectively respond to these complex challenges will be crucial to keep pace with the rate of change.”
The report is based on the results of an online survey of senior leaders at energy and water companies, combined with insights gained through in depth interviews.
The full UK Utilities Risk Report is available to download now.