Water utility deals herald revolution in energy industry

The new firm, Water Plus, made clear that it is ready for a fierce race to win over British business and is prepared to take on a range of different players.

The potential for other home service providers to use their existing clout to tap this new market is a trend which experts say could lead to the rise of the multi-utility company.

Guy Ledger, managing director of water advisory Atkins, says the change is about time. Electricity sound effect “The current structure of the UK water industry hasn’t changed fundamentally since privatisation… arguably nothing has changed in 40 years. Gas bloating pain There’s a great opportunity to bring forward a fundamental structural change for the water industry,” he says.

“As some of that change starts to play out we’ll see new entrants and existing companies seize on that and I can imagine that other utility providers will want to look at the water sector to benefit from entering that market,” he adds.

Accenture managing director Toby Siddall agrees: “Whether it’s utilities or energy companies branching into telecoms and broadband, or whether it’s the entertainment and telecoms companies looking to go the other way … Gas hydrates things will change.”

In certain corners of the market there is already evidence of this one-stop-shop approach from smaller, niche players. R gas constant kj Telecom Plus, the owner of Utility Warehouse, has been bundling energy and broadband services together for years. Electricity clipart And newer entrant Extra Energy offers customers insurance deals in addition to the standard gas, power and broadband options.

Rising big six challenger brand Ovo Energy seems to have followed suit, offering its digitally engaged customer base a broadband option in addition to its low-carbon energy deals.

EY partner Tony Ward says that unlike traditional utilities the smaller independents are already built with this multi-utility model in mind and could easily make inroads into neighbouring markets.

“If you’ve got the relationship with the customer and the systems lined up to allow for a different kind of product, that creates an opportunity for a seamless multi-utility.

“They are ultimately customer service businesses, and they see the value in that customer relationship. Ortega y gasset la rebelion de las masas The fact that they are selling gas or power or water is neither here nor there. Gasbuddy map It’s just a product to sell to those customers. Electricity facts label And if they can find more products to sell for that same customer, they will look to do that because it is the most profitable way of growing the business,” he says.

Large energy companies have historically produced energy, paid to distribute it through the national grid, and sold it on to British homes. Gas vs electric heat In this vertically integrated model, suppliers can boost growth in one way: win more customers to ensure more energy consumed.

For the big six, a step-change is inevitable. 76 gas credit card login Mr Ward argues that horizontal growth will become key; either by offering extra services related to the core product or offering a range of different product options.

The early movers within the big six are already jostling for position. Kite electricity generation Early last year energy giant SSE threw its weight behind its largely overlooked existing broadband business, by sharply undercutting the market to offer the cheapest deal at the time in an aggressive bid for market share.

Cash-strapped British Gas owner Centrica plans to leverage its considerable success in the smart metering business in a billion-pound strategy shift away from energy production towards expanding its presence in the digitally enabled “connected home” space and its smart thermostat business Hive.

A liberalised utility industry combined with a rising use of smart tech could give rise to unexpected service providers in our homes, including tech giants Google, Apple and Amazon. Electricity in water experiment In the US, Google has invested heavily in renewable energy to support its energy-intensive data centres and in 2010 the search giant was granted the right to buy and sell energy on the US wholesale power market.

It’s a long way from becoming a UK utility, but Google’s ownership of the Nest smart energy thermostat brings the group a step closer, and offers hints at the market drivers which could emerge.

Nest allows users to control their heating remotely using smart phones, and can even “learn” when to adjust the temperature when people leave and enter the home. Gas pain in chest The device, like many others on offer in the market, is the kind of breakthrough technology which could lure entirely new tech-based companies into the UK utilities market.

“If there was some game-changing technology which the likes of a Google or Apple could wrap a real technological, consumer-friendly capability around I could see them enter the market,” Mr Ward says.

But the emergence of Silicon Valley behemoths in the utilities market would more likely to be in the form of tech partnerships with existing companies which are able “to turn data into insights”, adds Accenture managing director Toby Siddall. Hp gas online payment “I can see big tech companies and specialists – Google, Apple, Facebook and Amazon – coming in to provide platforms in the connected home.

“There will no doubt be an explosion of potentially valuable data on consumer profiles in the home with the advent of smart meters, connected devices and automation. Grade 6 electricity unit plan But it still requires some domain specific knowledge and credibility,” he says.

With everything to play for, Mr Siddall says the time for speculation is over and utilities need to engage with consumers to roadtest innovation before they are left behind.

“What’s needed, though, is to get out into the market to test and learn how their traditional products and propositions can change in a connected world to add value to the customer.”