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Written by OB Insights
12/10/2017

Utility Week Congress 2017 - Highlights and Reflections

Our Sector Director, Sam Ramsden, travelled to Birmingham to catchup with the latest goings-on at ‘Utility Week Congress 2017’ - an event designed to bring clarity to the latest digital challenges in the Utilities sector.

The Utilities sector is entering one of its most pivotal moments in recent history, but on a positive note, the executives involved are showing signs of readiness, which aren’t always clear in evolving industries. This was particularly apparent at Utility Week Congress 17, where we picked out the following keynotes:

Customer Experience

We’re entering the era of Energy-as-a-Service, rather than a commodity. The public are slowly changing their perception of Gas, Water and Electricity consumption, to a point where it’ll be less about the actual product and more about the service they receive and how their supplier chooses to engage with them.

Michael Lewis, the CEO of E:ON UK, emphasised how customers are now very much individuals, urging suppliers to, “Build a bespoke solution for each customer based on their requirements”, whilst Steve Robertson, the CEO of Thames Water recognised that “People expect to be participants”, playing an active role in making savings and controlling their supply.

Technological Enablement

Better customer engagement will be made possible by developments like smart meters, IoT sensors and the customer-facing interfaces which surround them, but some consumers will be sceptical about adopting smart technology, wondering exactly how they could benefit. EON’s Michael Lewis, made a thought provoking observation:

Would you take your basket to the checkout at the supermarket and ask for an estimated bill!

- Michael Lewis, CEO, EON

The opportunities extend far beyond customer engagement - a smart network can help mitigate the risk of major events like pipe bursts or power surges from transmission, to distribution and ultimately supply, driving efficiencies across the board.

Ben Carter, Head of Critical National Infrastructure Services at Vodafone, highlighted that there’ll be 28-31 billion connected ‘things’ by 2020; by 2025 it’s predicted that there’ll be 2 million generators connected to the grid, and smart meters in every home.

P2P and Prosumers

Even the Utilities sector is vulnerable to the Peer-to-Peer revolution. Customer engagement is set to reach the kind of levels where many of us will be described as “Prosumers”. We’ll see people generating their own energy and selling-on in revolutionary new models of supply and demand. Technologies like blockchain can be a huge enabler here as the contractual basis behind this model.

William Rowe, Product Director at OVO, noted that, “Storage is an exciting trend in energy”, recognising that the next big innovation for the Prosumer will be next generation batteries. These batteries can potentially store excess power which could be sold back or used later, thus building the foundations of a more strategic dimension to the everyday power supply.

Vision for the Future

The event presented us with two different visions of the future, (from the Energy industry’s perspective):

The Utopian Future - which would involve engaged customers, who were happy advocates of their supplier.

Or,

The Dystopian Future - which involves these newly empowered customers flipping suppliers at will - changing as a habit and buying their energy through data analysis and artificial intelligence, without any loyalty to a brand.

Interestingly the dystopian vision of the supplier could easily be seen as the utopian vision of the new energy conscious customer, where data analysis and automated software rewards conscientious users. These complex dynamics need to be built into the business challenge

68% of digital users are satisfied with their energy provider, compared to 55% of non-digital users

- Ben Carter, Head of critical infrastructure services, Vodafone

Adopting a Design-Led Approach

Energy companies need a clear digital strategy which needs to be supported all the way down the energy chain. This will require unprecedented levels of collaboration between Transmitters, Distributors and Suppliers.

93% of IT directors have a digital strategy but 85% feel their networks won't support it 

- Ben Carter, Head of critical infrastructure services, Vodafone

The industry is starting to speak the language of the design-led agency, and as a company which has worked across sectors and witnessed first-hand a reluctance to adapt, Orange Bus knows that this is a hugely positive development.

On the Lean design concept of “failing fast”, William Rowe, the, Product Director of OVO sagely observed that, “From idea to fully invalidated idea is great!”.

You need to set yourself up to continually optimise what you have invested in

- Nigel Watson, Group Information Services Director, Northumbrian Water 

Advocating a customer first approach to design, Simon Coton, Head of Architecture, Business Information Services at Welsh Water, urged the industry, “Don’t give in to the excitement of tech at the expense of what the customer wants and needs”, recognising that, “There’s nothing like bringing in real customers”.

A view backed by OVO’s William Rowe, who reminded delegates to keep thinking outside of their own parameters and that they are not the user, consumer, or customer.

Making a Business Case

The Energy industry is already subject to the regulatory price control framework known as RIIO (Revenue = Incentives + Innovation + Outputs). These frameworks demand that innovation is part of the business plan for energy Distributors and Transmitters, but energy Suppliers may be harder to convince.

Chief Financial Officers need to develop a more ambitious vision of technological development than immediate returns might dictate. As Nigel Watson of Northumbria Water pointed out, “there won’t be overnight successes”, which would imply that the accountants may be wary of change - to mitigate this attitude, education and a much wider vision of long term success needs to be instilled across the company.

Final Thoughts

Despite good intentions, there’s a gap between technology providers/innovators and the utility companies themselves, which brings into question whether the utility companies are equipped to deal with new demands in terms of personnel and approach.

Utility companies need to build bridges with the tech sector to embrace and cater for changing digital behaviours, but with the right collaborative balance of industry vision and tech sector support, the industry can begin to tackle the biggest business challenge the domestic Utilities industry has ever faced

As specialists in the relationship between technology and human behaviours, Orange Bus is fully engaged by developments in the Utilities industry. If you would like to start a conversation on how to tackle this challenge, contact us on 0191 241 3703, or email sam.ramsden@orangebus.co.uk.