Leader: Big issues highlighted at Utility Week Congress

As Utility Week goes to press, the Utility Week Congress 2016 is in full swing. Our annual flagship conference set out to increase the confidence of business leaders in the utilities sector as they face up to some unprecedented shared challenges, with regards to ­changing competitive markets, new directions in regulation and shifting investment priorities.

Early insights from speakers spanning utility subsectors included:

• News that a new charter for the National Infrastructure Commission (NIC) has given the body greater weight and independence in its mission to bring confidence and clarity to long-term UK infrastructure needs. The charter will allow the NIC to “hold government to account” on its progress in delivering key infrastructure renewal and innovation ambitions – including those associated with smart power and resilient water systems. Taking a “system of systems approach”, chief executive Phil Graham said the NIC could act as an “infrastructure architect” – although he emphasised that this does not reflect a desire to conduct detailed central planning. Graham also urged industry to engage in the NIC’s forthcoming National Infrastructure Assessment ­consultation.
• More work is “urgently” needed to improve understanding of the resilience requirements of wastewater networks, according to Sarah Hendry, director of water and flood risk management at the Department for Environment, Food and Rural Affairs. While there is relatively mature thinking around a resilience strategy for water supply, Hendry said wastewater has been allowed to become the “ugly sister” in the water industry. Privately, leaders from water companies attending Congress agreed, saying the investment cycles associated with wastewater infrastructure need rethinking.
• Customers and investors will shape the direction of travel for utilities – not government or the regulator. This was the conclusion of Chris Loughlin, chief executive of Pennon Group, as he delivered one of a series of presentations exploring the challenges for utilities of all stripes in delivering market reforms. Loughlin observed that community and customer-driven changes to utility business models are forging ahead outside of the industry’s regulatory policy frameworks.

Other insights touched on the future approach of the Competition and Markets Authority to mergers and acquisitions and the investment priorities for distribution network operators as they attempt the distribution system operator metamorphosis. A full review of Utility Week Congress 2016 will appear in the next issue.