Ultimate source of utility in prize clock component (8)
I believe the answer is:
pendulum
'clock component' is the definition.
(part of a clock)
'ultimate source of utility in prize' is the wordplay.
'ultimate' becomes 'end' (similar in meaning).
'source of' says to take the initial letters (the start - or source - of the word).
'in' indicates putting letters inside.
'prize' becomes 'plum' (both can mean excellent or well-regarded).
The initial letter of 'utility' is 'u'.
'end'+'u'='endu'
'endu' placed into 'plum' is 'PENDULUM'.
(Other definitions for pendulum that I've seen before include "Swinger in clock" , "Weight hung from a fixed point to regulate a clock" , "Clock regulator" , "Lead swinging" , "Moves to and fro" .)