Last week Gentrack attended Future of Utilities – the leading event for senior industry figures to come together to discuss the future evolution of the energy and water industries. This year however, the feeling was very different. Taking place in the shadow of several smaller energy suppliers entering the SoLR process, and with energy prices hitting all time highs on the wholesale market, the summit took on a different kind of urgency.
With that in mind, our Regulatory Specialist, Samuel Van Arnold, comments on some of the big themes he picked up on.
With the news that two smaller suppliers had entered SoLR only hours before the conference kicked off, I was interested to see how the speakers at the event might frame their sessions. Clearly this was an industry that was on the cusp of a big change, triggered largely by unforeseen high global energy prices, as well as regulatory limits in the form of a price cap on energy retailers. How would the industry react?
There was an overwhelming sense that utilities were at a tipping point, that the need to achieve net zero was ever more vital, but at the same time, energy and water companies have to ensure that the costs of transitioning to a carbon neutral system are born fairly. There was also a focus on the need for innovation, as the answers to these challenges do not necessarily exist today, and that the industry had to collaborate in order to achieve the right outcomes for all.
Innovation and collaboration were dual themes that appeared strongly across the two days of the event, and in all areas – from energy and water supply, through to pipes and wires. But there was also a feeling that regulators needed to play their part by creating a stable environment in which companies could invest so they could create the innovative products, services and solutions needed. When regulators frequently ‘move the goalposts’ it makes it very difficult for businesses to make the long term decisions necessary to create the systematic change we need. There was a strong call for a framework in which investors can see strong enough rewards to want to invest – which in turn will create the investment and disruption needed. There was a recognition that new innovative suppliers were needed to drive a healthy competitive environment, move us towards Netzero targets and that faster decision making was needed. Slow decisions mean slow implementations and slow failures, meaning that it takes a long time to find genuine solutions to industry challenges. Many participants called for government and regulators to enable companies to ‘fail fast’ as that is the only way that solutions will be found.
Another element that was mentioned was how technology was a critical foundation and driver of innovation – and that utilities need strong technology in order to be able to innovate at pace. In a highly competitive and low margin market, cloud based and agile technology platforms are needed to enable utilities to deliver great customer experience, enable end users to make smart energy decisions, and drive profitability in order to innovate and create the right products and services that help us to achieve Netzero. Utilities need to collaborate with their technology partners, as well as other industry players in order to deliver on the requirements of the utilities revolution.
The final theme was that of the narrative driven by government and media – to drive confidence from consumers and investors. The challenges in the industry need to be solved quickly – and by those already working in the sector. If they are perceived as ‘the enemy’ then a lack of investor and consumer confidence could be hugely damaging.
As one participant said – we’re no longer just keeping the lights on, we’re the architects of the future!
Overall, it was a fascinating insight into how the industry plans to tackle the roadmap to a net zero future, and there was a strong sense of urgency behind the event – as one speaker said in a call to arms for the industry as a whole – ‘Avengers, Assemble!’