March 27, 2018
Predicted to be worth over £100bn globally by 2020, the ‘connected home’ is transforming how consumers use their energy through smart technologies. The complexities of Big Data, increasing renewables, and thickening regulation are already having an impact, with skills shortages for suitable specialists felt across the sector – something we’re seeing first hand with clients.
But what about the ‘great beyond’: what will the market look like ten, twenty, fifty years down the line? And how will it affect its key players: generators, network operators, suppliers, regulators – and consumers?
Infrastructure and innovation
Ofgem estimates that the UK will need to invest around £100bn in its electricity infrastructure to accommodate future increases in demand, and this is surely only set to continue. The Electricity Market Reform (EMR) is already in place to incentivise growth in secure, low-carbon electricity, which aims to stabilise future demand at an affordable cost to consumers.
Today, there are only 100,000 electric vehicles (EVs) in the UK out of a total fleet of 31 million. Last year, the UK Government announced that diesel and petrol engine vehicles would no longer be sold by 2040, turning the conversation around grid availability from ‘if’ to ‘when’. The National Grid predict that EVs will require 46TWh annually by 2050. That’s around 11% of projected national demand, and an extra 30% on top of today’s total peak demand. There are no straight answers to meeting this demand by the cut-off, but battery storage technology is expected to progress at lightning speed.
In the water industry, we’re seeing increasing demand for ‘innovation managers’ at the moment – professionals who can adapt the operator to changing market conditions. One innovation manager interviewed by WWT suggests that the role is actually a mixture of furthering smarter networks (allowing operators to gain a better insight over what is happening in their pipes, and developing early warning systems to identify issues), and championing communications technology. That includes implementing long range radio systems (LoRa) and narrowband IoT (Internet of Things) solutions.
Blurring the lines for suppliers
With over 50 suppliers currently active, it’s hard to imagine a time when they won’t be needed. However, a paper by Energy UK and EY predicts that the very nature of energy supply will radically change by 2030. Picture a home with solar panels, a heat pump, and a huge capacity battery. This technology already exists, and is only set to get more affordable and viable for consumers.
This could lead to a carbon-free, self-sufficient home which even sells excess energy to others over an ebay-style platform, according to the report. The role of an energy supplier could then be to cover any deficits through fixed insurance payments.
Proactive or reactive
Across the industry, firms run the risk of failing to adapt ahead of time. The roll-out of smart metering is proving that consumers are engaging with their energy consumption, and the transition towards more renewable energy and diversified supplies only increases the challenge. Ultimately, the utility business model and regulatory policies will need to change to ensure secure and reliable supply – something recently debated by the World Economic Forum.
The subject of what the future might hold isn’t just ‘pie in the sky’ thinking. It’s coming up in our conversations with clients on a regular basis. Despite a changing landscape across the energy market, we’re ready and equipped to help firms and candidates meet the evolving demands.
Venture further with Vallum. I head up recruitment for Vallum’s clients who are looking to improve their change and business transformation capabilities. Get in touch by email firstname.lastname@example.org, call 07864 653613, or meet me in person at the Energyst Event this April.