Utility Week Live: Editor’s highlights

Jane Gray wraps up a few of the most high-impact comments and themes emerging from the conference sessions she attended at Utility Week Live 2016.

From threats for price regulation in energy retail to propositions for smart home partnership between automotive manufacturers and utilities, dull moments were few and far between at Utility Week Live 2016.

My own observations are largely limited to the Keynote conference event which I chaired across the two days, but reports of packed-out seminar sessions on the exhibition floor as well as discussion during networking events suggest that interest, controversy and debates ranged far more broadly – and all the while, a hubbub of activity on the exhibition floor buzzed on, with new connections being made, deals struck and ideas sparked.

A very brief review of my personal highlights from the Utility Week Live include:

1. Price regulation threat for energy suppliers: Ofgem’s chief executive Dermot Nolan was clear that there will be a fight on the energy industry’s hands should he see resistance to the CMA’s rulings next month. Speaking about the imperative for suppliers to embrace transformation and innovate for the good of customers, Nolan warned that failure to do so would result in the regulator, reluctantly, abandoning its hopes for more principles-based regulation and being forced into heavy-handed intervention – including the potential for price regulation.
2. Ambition for dissolution of monopoly energy networks: Leaping from one provocative statement to another, Nolan said in a panel discussion that he would advocate an end to monopoly rule in energy network operation. As he set out his personal desire to see regulation “wither on the vine” in the presence of successful competitive markets, Nolan continued to say that he would like networks to join suppliers in facing “real challenges” and the “they may not have their monopolies in 20 years’ time. It was a direction of travel fellow speaker Nick Winser, chair of the Energy Systems Catapult but a former executive director at National Grid called interesting – he agreed that it would be a challenge for the Ofgem to “blend together” monopoly regulation with the competition likely to arise to traditional network services from disruptive technologies like energy storage, and from a rise in local balancing.
3. Pro-market water regulation: Setting out an ambitious agenda for transformation in the water sector, Ofwat’s chief executive Cathryn Ross delivered an upbeat keynote which stitched together a wide range of developments, from non-domestic market opening to exploiting the opportunities of the sludge market. There were myriad high impact implications arising from her presentation, but key among these was the future for water company relations with third party suppliers and contractors. As Ofwat look to encourage market changes which will enable “transformational efficiency” in the sector, Ross says she looks forward to the growth of “direct procurement for customers”. This might lead, she said to “the appearance of third party solutions that include designing, building, maintaining and potentially even operating new infrastructure”. Prepare for the age of water network management as a service. A practical upshot of this might be a future in which water network management is conducted as a comprehensive service for water companies – shifting them away from the asset-centric core competencies they have nurtured for so long, and towards a more holistic approach to maximising high value transaction points in the water market.
4. Nissan energy storage ambitions: It was a pleasure to welcome a number of speakers from the automotive sector to Utility Week Live as we sought to highlight common areas of business transformation, from exploitation of the Internet of Things to increased focus on operational investment over capital expenditure. It was a real boon however to be able to hear from Nissan Europe’s chief information officer about the rationale behind its recent announcements in the field of energy storage. Writ large in recent news, Nissan has made launched the first UK trial of vehicle to grid mobile energy storage as well as a proposition for domestic energy storage devices which leverage second-life EV batteries and Nissan’s Stephen Kneebone made it clear that these are no dabblings. He was clear that Nissan is thinking about the scope for partnership with utilties – both in supply and distribution – to strengthen its own move away from simply making cars and towards becoming a vendor of “mobility”.
5. Cyber-security: Stakes are high for energy networks as they seek to embrace system transformation and the opportunities of connected assets, automation and digitisation while acknowledging that cyber-vulnerability is a natural bedfellow of such developments. In a panel session which also represented the first ever official event hosted by Network magazine, Utility Week’s new sister title, experts discussed the evolution of cyber threat for energy networks operators. Key points were made around the need for greater collaboration and a shared understanding of threats between IT and engineering/operations personnel, especially as operational and information technology become more closely intertwined. Warnings about the ease with which attacks can be planted in emails which are cunningly crafted to seem innocent to recipients made network resilience seem terrifyingly fragile, especially as one speaker outlined the nochalence with which cyber criminals can traverse the divide between back office IT systems and asset control technology. One speaker admitted that most CIOs probably suffer sleepless nights as they think about “how to portect their organisations” – though all emphasized that with careful management, cyber-fear should not be a basis for paranoid paralysis in networks. A full write up of this debate will appear in the June issue of Network.

Many thanks to all of our conference, seminar and exhibition sponsors for lending your support to the show and making it possible for us to bring together the speakers that produced these fascinating insights into the transformation of utilities.