Utility Week Congress 2018: view from the chair

Everyone faces challenges, but some companies also see opportunities. That was the headline message from Utility Week’s 2018 Congress in Birmingham.

The winds of change are blowing through an increasingly unpredictable utilities landscape, this year’s Utility Week Congress agreed.

However, the takeaway message from the two-day conference, held in Birmingham on 9 and 10 October, was that those within industry most keenly meeting the decarbonisation, digitalisation and decentralisation challenges were those taking on board the views of their critics, and changing business practices in response – be it through braver and bigger thinking, becoming more relevant to their communities, transforming business culture via latest technologies, or embracing the advantages of collaboration.

Top industry players and thought leaders from companies and stakeholders across utilities revealed that utilities are thinking more dynamically and ambitiously than ever before in the face of an uncertain political and regulatory ­backdrop and changing consumer demand, coupled with the ongoing needs of building more resilience, encouraging investment and ­creating innovation.

Day one of the Congress focused on three big issues exercising utilities today across the piece, one of which was the prospect of renationalisation. Although something widely viewed by conference as a highly retrograde step, it did raise the question of how the public debate had come to get here, and how utilities could work to change the national dialogue around PR issues such as leakage and executive pay. This fitted well with another key theme about the increasing importance of legitimacy and trust for utilities. It focused on how localism and raising customer awareness about the vast work being done by utility companies is vital, as is sharing more about the role consumers can play in valuing water and energy and ­reducing consumption.

The fast-developing narrative around regulation was picked up enthusiastically by delegates, with one big six supplier firing a polite warning shot about the unpopular price cap mechanism. He warned that the full impact of the cap on the market and consumers has yet to be revealed.

Conference also seized the chance to tap in to the recent announcement by the National Infrastructure Commission (NIC) about its root and branch review of regulation, including the potential of a super-regulator. Certainly, those regulators present seemed to accept the case for working together more closely. But perhaps most interesting was the debate around what successful regulation could look like – which revealed a new focus on fairness, as opposed to trust, and a sense that pure play economic regulation is giving way to a wider role, “upholding the social contract”, as one regulator put it. This is a far cry from the regulation envisaged at the time of privatisation, and a clear response to changing politics.

Day two built on those key insights and framed them against the need to also drive resilience, investment and innovation.

Among many salient messages, delegates heard how digital transformation and artificial intelligence (AI) will be vital business enablers going forward; how meeting the UK’s infrastructure needs will be imperative for protecting the country’s interests and future investments in energy and water – particularly with the rising challenge of climate change; how customer-led efficiency must be the sector’s new mindset; why electricity is not the only game in town for heat and transport; and how mutual working and learning lessons from each other could help ensure the agile approach and competitive advantage utilities increasingly need.

Leaders and delegates left the Birmingham Conference and Events Centre enthused – and with much to think about.