Thousands of visitors joined hundreds of exhibitors and speakers at Utility Week Live, the UK’s biggest utilities event, at Birmingham’s NEC last week. The buzz in the air was palpable as the electricity, gas and water industries joined together to tackle the biggest issue of the day: disruption.
The theme touched a nerve with exhibitors and visitors alike, prompting hundreds of stories of how utilities are being disrupted – by policy, by economics, by changing customer habits and expectations, and of course, by technology.
So why disruption? The theme reflects a unique moment in utilities’ history. Competitive players in the energy supply market face unprecedented political intervention, as well as seismic changes to their value proposition driven by the energy transition. This is driving business model change on a grand scale, with global deals such as the Eon/Innogy asset swap reshaping ideas of what an energy company looks like.
The landscape is no less challenging for the UK’s monopoly utilities – water companies and energy networks. As they prepare for their next regulatory settlements, there is huge pressure on them to deliver value for customers and drive efficiency in their businesses. There are major questions over what those businesses will look like in the future. Will distribution network operators (DNOs) become distribution system operators (DSOs), and how will they realise value from this? Will domestic competition disrupt the water sector, or will the consequences of extreme weather get there first?
Meanwhile, a new breed of utility company is emerging. New entrants are spotting the opportunities in the market and using emerging technologies such as artificial intelligence to challenge established business models.
Utility Week Live presented hundreds of ways to manage these challenges. With two days of presentations across five theatres, visitors heard about the massive amounts of data now available to utilities, and how they can turn that into valuable insight. They looked at mobile technologies and new techniques such as gamification, which can drive engagement with customers, as well as game-changing new technologies – artificial intelligence, the Internet of Things, blockchain. And they saw these new technologies and techniques on display from our industry-leading exhibitors.
Visitors also heard about the innovation and best practice happening on the front line of delivery: cleaning up the sewer network, for example, and improving customer experience techniques in the water industry.
Below, we present some highlights from two of our seminar theatres: energy networks, and wholesale water. Next week, we’ll look at what happened in the streetworks theatre, customer solutions theatre and the keynote conference.
Wholesale Water Theatre
Innovation Shop Window
Anglian Water’s initiative sought to encourage innovation across both the company and the supply chain.
One of the key topics of conversation at Utility Week Live in the Wholesale Water Theatre was how to tackle leakage. Ofwat is challenging all water companies to stretch themselves further and has set the sector a reduction target of at least 15 per cent by 2025 as part of the upcoming price review, PR19.
Steve Kaye, head of innovation at Anglian Water, gave a presentation in the Wholesale Water Theatre about how the company’s Innovation Shop Window initiative is helping drive a “culture of open innovation and collaboration” across Anglian Water and its supply chain.
Based in and around the town of Newmarket in Suffolk, it provides a place to showcase the combined effect of existing and future innovation across the entire man-made water cycle, “from where we take water out of the ground, treat it and put it into our networks,” Kaye said.
Just like a shopkeeper putting all their best products in the shop window, Anglian is doing exactly that in Newmarket where it serves 22,000 customers. It is working with more than 100 organisations across 95 projects in the town, with successful projects then rolled out across the business.
Kaye said: “The national average for leakage is probably still over 20 per cent. At Anglian we feel we’re doing pretty well with 17 per cent and going downwards but when we talk to our customers we got quite a strong reaction – it’s still too much.
“So we’ve put a massive effort into reducing leakage through traditional resources, through technology and also by engaging our customers more significantly.”
He added: “Through having an engaging project like Shop Window you can engage lots of suppliers to deliver innovation. For me, most of the innovation that exists in the water sector is in the supply chain – that’s where the investment is being made.
“By doing it in one area, which is what the shop window is all about, we can accelerate innovation. If we try to this everywhere in our huge region it would take a long time. Learning can be rolled out for the benefit of customers.”
Shop window goals
Anglian Water has set itself seven goals to solve “the most challenging questions” facing the industry.
It said it doesn’t yet know for certain how it will make the goals a reality – “it’s a journey, but they are already positively transforming the way we work”. The goals are:
• 80 litres per person per day usage;
• Zero leakage and bursts;
• Build a circular economy;
• Energy neutral;
• Zero pollution and flooding;
• 100 per cent compliant and chemical-free drinking water.
• 100 per cent customer satisfaction
Transport is changing
The age of the EV is now seen as inevitable, but with actual take-up still low, there is a lot of debate about the timing, and what networks should be doing to prepare.
There is no bigger disruption than the changes we are seeing in our transport system – the way we use it and the way we move around.
This was the clear message from Utility Week Live 2018’s Network Theatre session on “The role of transport in the energy system”.
Chaired by Luke Redfern of Cenex, it considered the outlook for low-carbon transport, where industry is going, key policy drivers and consumers. With poor air quality responsible for 40,000 UK deaths a year, and transport operations increasingly adding to pollution, he said industry was listening.
Almost every major manufacturer is bringing low-emission vehicles to market. A “remarkable surge” had seen UK sales rise 40 per cent annually, up from 3,500 in 2013 to 121,000 plug-in vehicles by October 2017.
Mike Potter, managing director of Drive Electric, has seen increasing numbers of people make the journey to electric vehicles (EVs). He said people were starting to look at energy systems very differently.
Battery cars account for 72 per cent of its sales per month, with 90 per cent of owners charging overnight at home and many households looking at energy storage.
And instead of affordability being the tipping point, he has found range anxiety to still be the number one issue for consumers. Larger 250-mile battery cars will be game-changers.
“These are going to change things in the same way as iPhones. We believe that’s in the next two years. Our belief is that by 2027, half the vehicles registered in the UK will be battery cars.
“They will be cheaper to purchase – once battery costs come down – and so, much cheaper to run – your costs go from £100 in fuel to £15 in electricity.”
And there will be a major impact on the sector, including networks, he said. “It wouldn’t take a lot of cars. An increase of about 10 per cent could affect up to 20 per cent of the network, particularly if people start to adopt this technology in clusters.”
Mike Foster, chief executive of Energy Utilities Alliance, said while some sectors had made real strides on emissions, transport had not performed at all on 1990 environmental targets.
Despite vehicles becoming more efficient, more traffic – including light-duty vehicles delivering online purchases – had created “a standstill situation”. Meanwhile, the economic cost associated with air pollution was now £54 billion a year.
The answer, he said, was biomethane for “the big stuff”: HGVs, buses and coaches. It could bring greenhouse gas emissions down by 84 per cent and also offered a cheaper option for fleet operators.
However, a lack of joined-up policy between Whitehall departments, including the Treasury, was causing unintended consequences, he feared.
Laura Morris, of National Grid Ventures, said everyone agreed more EVs were coming and would have a real impact, with an acceleration due in the next five to ten years.
“Over the next 12 years we are looking for around 100-times the investment that’s gone into [behind the meter] charging infrastructure to date to enable EVs.”
Long term, we will need seamless, integrated solutions to meet consumer needs about EVs and the charging infrastructure necessary.
“Different industry participants in the value chain will need to collaborate. There’s a real piece around infrastructure and customer services coming together, to understand what are the right solutions and how do we scale.”