Water industry takes major step towards becoming carbon zero

Working with two international consultancies, Ricardo and Mott MacDonald, the sector will develop a comprehensive action plan detailing the measures the industry will deploy to achieve zero carbon emissions over the next decade.

The water industry is the first industrial sector in the UK, and one of the first major sectors in the world, to commit to a carbon zero future by 2030. The goal forms part of the industry’s Public Interest Commitment (PIC) released earlier this year with the carbon zero goal one of five stretching social and environmental ambitions.

As the fourth most energy intensive industry in the UK, the water sector directly contributes around five million tonnes of greenhouse gas (GHG) emissions each year. As well as the immediate impact of carbon reductions, the industry intends to share its learnings to help other major energy-using industries to deliver their own plans.

The consultancies will add their expertise and lead on the production of the plan, which will be published in March 2020 followed by a detailed report in the Summer. Ricardo and Mott Macdonald, on behalf of Water UK and UKWIR, will carry out research to help define and agree a practical approach to the pledge, while also assessing what carbon reduction measures will have most impact.

Progress on the goal will be independently assessed each year, with key milestones reported publicly. Individual companies will use the action plan to inform their own detailed approaches to meeting net zero across the industry by 2030.

Water companies have already started working towards the carbon zero goal with many programmes and initiatives in place. These include:

  • The industry plans to plant 11 million trees across the country by 2030. The joint proposals, announced earlier this year, will see trees planted on around 6,000 hectares of land across England together with work to restore original woodland and improve natural habitats that themselves provide carbon capture.
  • As bottled water is around 900 times more carbon intensive than tap water, the water industry has led on a national shift towards refilling water bottles through the Refill campaign. With partners City to Sea the industry has delivered an increase in the number of free refill stations from 1,500 in 2017 to around 26,000 today – and the number continues to grow. In addition, the sector has committed to preventing the equivalent of four billion plastic bottles ending up as waste by 2030 through the PIC
  • Building on a reduction in leakage of a third since the 1990s, water companies in England have committed to triple the rate of leakage reduction to 2030 as part of the PIC and are delivering plans to reduce by a fifth the average amount of water used per person by 2050. This will significantly reduce the carbon and energy used by the sector.

Peter Simpson, chief executive of Anglian Water and one of the sponsors of the project on behalf of the sector, said: “This is an important first step on the sector’s journey to be net carbon zero by 2030. Climate change is an existential threat to our environment, and way of life. Business as usual is simply not an option.

“This vital project will help us find the technologies and processes we will need to help us become carbon zero. We’ve made great strides in recent years reducing both operational and embedded carbon, but we don’t have all the answers. So, bringing in outside expertise to help us reach this target is essential.

“The water industry is committed to playing a leading role in decarbonising our economy and while achieving net zero carbon for the sector by 2030 is an extremely challenging task there is huge conviction, enthusiasm and passion from across the sector to ensure we achieve it.”

Ian Behling, project director from Ricardo for the net zero strategy, said: “We’re proud to be working on this project, and both Ricardo and Mott MacDonald are able to bring a wealth of experience and technical understanding that will support the UK water industry in creating a robust and effective net zero strategy.

“This important investment not only sets the direction of the UK’s water industry, but will also influence other sectors, given the important role the water companies will play in supporting the UK’s 2050 net zero ambition.”

Maria Manidaki, water sector carbon management lead from Mott MacDonald, said: “We are delighted to be helping the water industry transition to net zero by 2030. Achieving net zero will require fundamental changes to the way we think of water infrastructure systems and their interaction with customers, other infrastructure sectors, the environment and the wider society and economy.

“Leadership, collaboration and fresh thinking will be paramount to achieving a net zero transformation and both Ricardo and Mott MacDonald are ready to drive this change with Water UK.”

The water and sewerage industry in England agreed the Public Interest Commitment (PIC) in April 2019, strengthening their ongoing commitment to work in the public interest and place wider good at the heart of everything they do. The companies agreed a series of pledges which complements their individual business plans by showing leadership at a national level.

The sector will champion measures through which water companies can enshrine what it means to operate in the public interest within their business purpose, in line with best practice among leading socially-responsible businesses. This could include steps such as amending licences or Articles of Association.

In addition, as part of the PIC, water companies have also agreed to work together towards five challenging goals:

  • Triple the rate of leakage reduction across the sector by 2030
  • Make bills affordable as a minimum for all households with water and sewerage bills more than 5% of their disposable income by 2030 and develop a strategy to end water poverty
  • Achieve net zero carbon emissions for the sector by 2030
  • Prevent the equivalent of four billion plastic bottles ending up as waste by 2030
  • Be the first sector to achieve 100% commitment to the Social Mobility Pledge.

Each of the goals in the PIC is sponsored by one or more water company chief executives. The net zero carbon pledge is sponsored by Peter Simpson, Anglian Water; Heidi Mottram, Northumbrian Water; and Liz Barber, Yorkshire Water.


Water treatment works giving energy back to the grid

Castle Moffat Water Treatment Works, just south of Garvald, abstracts water from Whiteadder Reservoir. It provides on average 21 Ml/day of clean, fresh drinking water to approximately 47,000 customers across all of East Lothian.

This self-sufficiency is a result of hydro power which is supplied by a new state of the art generator and control panel which were upgraded in a £200,000 investment last May. The original hydroturbine, which is more than 50 years old, was installed on the site in 1992 and was in need of refurbishment.

Castle Moffat WTW is the only Scottish Water asset where pumped water is used to power a site. The water is pumped from Hungry Snout Pumping Station at Whiteadder Reservoir, over Friar’s Nose Hill and then drops by gravity to the site inlet. It generates 750,000 kWh/annum – enough to power 2,416 homes.

The site uses around 80% of the electricity it generates from the turbine with the remaining 20% exported to National Grid.

Claire Chapman, renewable generation manager at Scottish Water, said: “Castle Moffat is a unique site of ours. It is our only water treatment work where we have a hydroturbine on a pumped water supply. The introduction of the Feed in Tariffs in 2010 have meant that typically, only gravity-fed hydroturbines have been promoted across Scotland, as pumped sites did not attract funding. However, because we offset nearly all the electricity generated at the Treatment Works, it is still a financially viable site for Scottish Water.

“This is a good example of how Scottish Water uses innovative technology to best adapt to  Scotland’s topography, to build sites that best serve its customers. And in this case it is not only a very clever technically built site in terms of how it pumps water but how it able to harnesses hydro power and use that energy to operate the site which is great news for the environment.

“At times Castle Moffat also gives electricity to the National Grid, showing it is possible to maximize the economic advantages that can come from Scottish Water assets.”

“Castle Moffat is really important in terms of the direction we’re moving in with our carbon footprint and trying to reduce the amount of electricity we use. Using renewable technology like hydro and getting greater value from our day-to-day practices is helping us play our part in tackling the climate change emergency.”


Initial investigations for proposed Hampshire reservoir complete

Investigations into land earmarked for a new reservoir in Hampshire have been completed on schedule, according to Portsmouth Water.

Small drilling rigs and excavators have been in operation on the water company’s land between Staunton Country Park and Havant Thicket since early November, taking soil samples and installing underground water monitors.

The soil samples are now being analysed in a laboratory and the results, due back in January and February, will help inform the company’s plans to build a reservoir on the site.

Last month, Portsmouth Water unveiled proposals to build a new reservoir in collaboration with Southern Water.

Bob Taylor, CEO of Portsmouth Water, said: “We’re delighted to have completed this first step of vital investigations on time, despite some very wet weather, which has made the ground conditions on site quite challenging.

“We’d especially like to thank the local communities around the site for their co-operation while we’ve been carrying out the work and we hope it hasn’t caused too much disturbance.

“This information will help us prepare the planning application for Havant Thicket Reservoir, which we hope to submit in autumn 2020. In the meantime, we’ll continue to talk to residents, businesses, local groups and community representatives in the local area to share our ideas and gather their views.”

A total of 21 boreholes between 10 and 65 metres in depth and 12 shallow trial pits up to four metres deep were excavated. Water monitors were also installed to accurately chart the fluctuation of groundwater levels.


What will the PR19 price determinations mean for the water sector?

Like a blockbuster released in time for the Christmas holidays

The document, which was published earlier this week, contained a number of key demands for water companies in England and Wales over the next five years, including cutting leakage rates by 16 per cent and reducing mains bursts by 12 per cent.

It also confirmed that Ofwat plans to launch an innovation competition, with up to £200 million available between 2020 and 2025.

The price determinations have come at the end of a year when the water industry has found itself under pressure from both ministers and opposition parties to improve performance, but now that the document has been published, has PR19 lived up to the hype? Is it the game changer many predicted, or will it prove to be a damp squib?

The chief executive of the Consumer Council for Water, Tony Smith said most customers will see this as a “good deal” but he added that more must be done to “make sure everyone can afford their bill and ensure there is sufficient investment in safeguarding these essential services long into the future”.

“Water companies have had it too good for too long,” added Smith.

“At first glance in appears Ofwat has listened to our repeated calls for it to get tougher and tip the balance back in favour of customers. But we’ll be keeping a close eye on the performance of companies to make sure customers are not short-changed.”

Alex Prentice, sector lead for utilities at regulatory experts Huntswood, said the regulator has sent a “clear message” to water companies that there will be a shift away from the status quo, with increased investment in the sector to ensure a greater focus on customers.

“As the industry moves towards improved resilience – both financial and operational – firms must put in place clear plans with effective customer communication at the heart of all activity,” added Prentice.

“Ofwat has stated that firms that ‘go above and beyond’ will benefit from further financial support, while those that don’t will be penalised and asked to return money to customers. This puts a strong financial incentive on companies to invest in excellent customer service and complaints handling to deliver positive performance and good outcomes for all bill payers.

“At times of extraordinary disruption, customer service teams are put under the most pressure. Having access to flexible, third-party resources can help to ensure continuity and excellence, while keeping down costs that can arise from complaints,” said Prentice.

Fujitsu UK and Ireland’s chief digital officer for manufacturing, utilities and services, Graeme Wright said it was “great” to see Ofwat demanding change.

“The utilities industry is set to undergo a period of change, especially over the next five years,” added Wright.

“As a result, if the UK’s water companies are to address the affordability of water required by Ofwat, they’ll need to improve the systems they have in place.

“By employing the latest technology and investing in its infrastructure, water companies can ensure they have full lifecycle, ‘systems thinking’, and ‘agile’ approaches to become more data driven and find ways to save water.

“Through the increased use of IoT and data analytics, water companies will be able to ensure efficiency of their systems and in turn, costs can be cut for both themselves and consumers – a win-win situation for all parties, all whilst meeting Ofwat’s demands,” he added.

PA Consulting’s water sector expert, Liz Parminter, commented: “Beyond the headline grabbing reduction in appointee cost of capital to 1.96 per cent – the lowest since privatisation – the picture for water companies is more nuanced and individually focussed than it has ever been.

“Ofwat has made concessions in its final determinations giving water companies more breathing space in next couple of years through a reduced frontier shift efficiency challenge, more glidepaths and reduced stretch on some performance commitments and changes to Pay As You Go ratios and bill profiles.

“Despite these positives, some water companies still face large cost gaps whilst others have to find steep gains in performance. The challenges don’t stop there with other companies having already agreed to reduce dividends or facing a challenge to maintain their credit ratings. In such an environment it will be the strength of each company’s executive team that will be differentiating factor. How well they embrace new operating models, increased use of technology and ideas from outside the sector will ultimately decide the winners and losers over the next five years.”

Simon Colvin, a partner and head of utilities at Weightmans LLP, said: “From the outset, improving the water sector’s customer engagement has been a core aim of PR19. Ofwat’s final determinations have confirmed the new Customer Measure of Experience (C-MeX) and Developer Services Measure of Experience (D-MeX) will come into force on 1st April 2020.

“Both are designed to bring the customer service credentials of water companies in line with competitive markets, replacing the Service Incentive Mechanism (SIM), a financial and reputational incentive that has been in place since 2010. Like SIM, C-MeX will reward companies that improve their customer engagement and penalise those that don’t. However, the new rules expand the scope of channels Ofwat uses to measure positive engagement, factoring in social media for the very first time. It means a poorly handled complaint that escalates to a public forum could have a significant impact,” added Colvin.

“It’s encouraging to see the business plans water companies submitted to Ofwat contain detailed plans designed to improve customer engagement in a more digital environment. These measures will need to be reviewed and updated throughout the sector’s next regulatory cycle to ensure they remain fit for purpose as the digital environment continues to evolve.

“As steps are taken to improve customer engagement across a broader set of customer channels, a clear conflict resolution strategy that protects staff, accompanied by comprehensive and regularly updated training, is also a must. Employee welfare is a significant responsibility. Water companies can be liable for emotional and physical harm to employees resulting from engagement with disgruntled customers, and this accountability is now extending to include mental health and wellbeing.”

Chris Quinn, water services director of World Kinect Energy Services added: “Ofwat’s final determinations for 2020 for business charges across the next regulatory period look to have allowed for more retail margin for water retailers, thus creating a more competitive landscape for customers.

“The period from market opening to now has been a frustrating one for all involved. Customers have been critical of the switching process and critical of the service received from water retailers, coupled with tight margins, has resulted in the overall experience, generally speaking, being poor.

‘’Customers are incentivised by savings and overall cost, this has come out loud and clear from our own intelligence and customer feedback, which also indicates that most customers see good customer service as a basic expectation which isn’t consistently happening across the board, so the market still has a long way to go.”

ays, Ofwat’s PR19 price determinations has something for everyone – thrills, spills and customer bills.


Portsmouth Water completes initial investigations for proposed Hampshire reservoir

Investigations into land earmarked for a new reservoir in Hampshire have been completed on schedule ahead of the Christmas break, despite challenging wet weather.

Small drilling rigs and excavators have been in operation on Portsmouth Water’s land between Staunton Country Park and Havant Thicket since early November, taking soil samples and installing underground water monitors.

The soil samples are now being analysed in a laboratory and the results, due back in January and February, will help inform the company’s plans to build a reservoir on the site.

Bob Taylor, CEO of Portsmouth Water, said:

“We’re delighted to have completed this first step of vital investigations on time, despite some very wet weather, which has made the ground conditions on site quite challenging.

“This information will help us prepare the planning application for Havant Thicket Reservoir, which we hope to submit in autumn 2020. In the meantime, we’ll continue to talk to residents, businesses, local groups and community representatives in the local area to share our ideas and gather their views.”

A total of 21 boreholes between 10 and 65 metres in depth and 12 shallow trial pits up to four metres deep were excavated. Water monitors were also installed to accurately chart the fluctuation of groundwater levels.

The recent wet weather means the site is waterlogged and boggy, even in areas not affected by the works. Some areas still have temporary fencing as a safety precaution and the reinstatement plans will be progressed as soon as the weather and ground conditions improve,

The reservoir, which is being developed in partnership with Southern Water, will help secure more reliable water supplies across the water-stressed South East. It will also create a new, public leisure space for nearby communities and a wildlife haven with wetlands for birds.


Environment Agency warns of further flood risk as rivers continue to rise

The Environment Agency is warning that river levels are continuing to rise despite the improving weather outlook.

The Agency said rivers are continuing to respond to recent rainfall meaning that there is a continued risk of flooding in parts of southern and central England over the next few days.

The EA currently has 50 flood warnings in place where flooding is expected and immediate action is required, together with a further 128 flood alerts where flooding is possible warning people to be prepared.

There is an increased risk of localised river flooding in the south east of England, along lower parts of the River Severn and in East Riding of Yorkshire. The Agency said lland, roads and some properties are expected to flood and there will also be travel disruption.

High groundwater levels in parts of southern England and in north Lincolnshire means there is a risk of groundwater flooding. Local groundwater flooding is expected in parts of Dorset, Wiltshire, Hampshire, West and East Sussex and Brighton for at least the next five days.

The Agency is also warning that local coastal/tidal flooding is possible but not expected for parts of the English Channel coast on Thursday.

According to the UK Met Office, the country has already reached 90% of the normal rainfall level for December, while monthly rainfall records in South Yorkshire, Nottingham and Lincolnshire have already been broken.


Flood risk: Environment Agency warns communities to stay vigilant

With heavy rain expected over the next few days, the Environment Agency is warning communities in England to check their flood risk and sign up to flood warnings.

Currently the Agency has 47 flood warnings in place across the country where flooding is expected and immediate action is required, and a further 195 flood alerts where flooding is possible.

Heavy showers could bring disruption to communities in parts of southern and central England as rain falls on already wet ground, increasing the risk of flooding.

Environment Agency teams are out on the ground operating flood defences and clearing drainage channels to provide additional protection to communities that could be at risk.

Sheena Engineer, Flood Duty Manager at the Environment Agency, said:

“We are monitoring rainfall and river levels closely and are already operating flood defences across southern and central England to help reduce the risk of flooding. Our teams have already put up temporary flood defences in a number of locations such as Bradford on Avon and are ready to deploy them in a number of communities including Guildford, Leatherhead, and Dorchester should they be needed.”

“We advise people to stay away from swollen rivers and not to drive through flood water as just 30cm of flowing water is enough to float your car.”

The advice to stay safe during wet weather comes as the Environment Agency and the AA published research yesterday showing that three quarters of drivers (74%) would risk driving through flood water, despite it being the leading cause of death during a flood.

This autumn have seen rainfall records broken for South Yorkshire, Nottinghamshire, and Lincolnshire – the previous records were set in 2000. England as a whole has had its fifth wettest autumn since records began with 348mm.


Floods impact Yorkshire Water infrastructure

Last week’s heavy rain and flooding in South Yorkshire and North East Derbyshire has impacted some of Yorkshire Water’s infrastructure.

In its latest update, the water company said it was continuing to manage some ongoing issues in South Yorkshire and had been working directly with customers who have been impacted by flooding.

Last Friday water company representatives supported a multi-agency visit to the area led by South Yorkshire Police.

Following the floods Yorkshire Water undertook increased activity across the region to carry out repairs and make further checks on assets including checking that manhole lids haven’t been dislodged by the flood waters.

Yorkshire Water has emphasised to customers that there is no cause for concern with the quality of drinking water. However, as a goodwill gesture as part of its response to the flooding the water company has also been providing pallets of bottled water for volunteers and displaced customers.

Despite being inundated with flood water, Yorkshire Water’s Greenroyd Pumping Station in Fishlake has continued to operate throughout, as have other pumping stations in the area.

The company also said that reports suggesting that the pumps at its Sandall sewage treatment works were not operating during the heavy rainfall were incorrect and the pumps continued to pump their normal full flows throughout the rainfall.

It was a different story at Yorkshire Water’s Mexborough treatment works which was inundated with flood water during the heavy rain – the sheer amount of flood water also overwhelmed the sewer network in the area. To help alleviate the situation the firm used tankers to reduce levels in the sewers. While levels in the sewers have been reducing Yorkshire Water said it would continue to tanker out of the network until things return to normal.

The water company also had to carry out repairs to one of its nearby sewers, describing the work as challenging due to the local ground conditions. However, Yorkshire Water said it did not believe that this was the main factor in the flooding as the sheer amount of rain overwhelmed the entire network.

At Renishaw, Derbyshire the utility visited customers impacted by flooding. Yorkshire Water said its investigations had found that the flooding was caused by the nearby watercourse being overwhelmed by the amount of water entering it from surrounding land, rather than any issues with the sewer.

Yorkshire Water commented:

“North East Derbyshire District Council, Derbyshire County Council and the EA will be working together to look at any action which can be taken to address this issue in the long term.”


Ofwat calls for water sector improvements

Ofwat has called on the sector to improve its performance with its latest service delivery report finding that there is a real gap between the best and worst performers in the sector.

The report also found that the industry as a whole has not kept up the progress made in earlier years and performance has stagnated.

For example, despite increasing since 2015-16, customer satisfaction across the sector has deteriorated in 2018-19. Eight companies have made modest reductions in leakage, but these are more than offset by the increases made by the poorer performing companies.

The service delivery report compares performance on the outcomes that matter to customers such as leakage and pollution, and how much was spent to deliver them, by the 17 largest water companies in England and Wales. Anglian Water, Wessex Water and Portsmouth Water lead the sector in delivering services for customers overall and spent less than anticipated doing so. In contrast Thames Water and Hafren Dyfrdwy languish consistently at the bottom of the table, having been ranked among the poorest performers in multiple areas, including customer service and supply interruptions.

Ofwat examined performance in the most recent year, 2018-19 in addition to indicating the direction of change from 2017-18, for example whether outcomes performance (such as leakage) has improved or got worse. The companies have been grouped into three categories (better performers, average performers, and poorer performers) based on their performance against the commitments they made in 2014.

Chief executive Rachel Fletcher said: “This latest report card on the water sector shows some real variation in company performance. Customers served by Anglian, Wessex and Portsmouth tend to have a better service. But it also shows some inertia at the bottom of the pack with Thames Water and Hafren Dyfrdwy underperforming across a wide range of measures.

“It’s great that we are seeing some real improvements on things that matter – like reducing sewer flooding. But in other areas the industry’s performance is stagnating. Ofwat’s new strategy and the challenges we are setting in the price review for the five-year period to 2025, require companies to transform their performance, particularly those at the bottom of the pile. We are raising what we expect from companies and in responding to that, they will need to show innovation and real ambition.”

As part of its new strategy Ofwat aims to make more use of the insight and data it holds. By ranking companies according to their measured performance, Ofwat is looking to make it clear for companies where they need to focus their efforts in delivering improvements for customers and the environment.

Southern Water tenders £150m AMP7 business management consultancy framework contract

Southern Water has gone out to tender with a contract for a business management consultancy framework panel worth up to an estimated £150 million in total.

The water company is seeking to establish a framework panel with the expertise to support its ambitions and is looking for suppliers with expertise in a range of business areas, including:

  • business strategy
  • change management
  • corporate planning
  • financial
  • HR
  • IT
  • procurement
  • regulation
  • pensions
  • risk management
  • tax

The contract is being tendered in five separate Lots and sub-Lots.

Lot 1: Strategy and change

Lot 2: IT Consultancy

Lot 3: Procurement and supply chain

Lot 4: Finance

Lot 5: Regulation

The initial contract term is 4 years with a further 4 year extension option.