Marine Planning process - protecting the waves

Photo source: SASThe Marine Planning process has started. The first area opened up for Marine Planning is the East coast between Scarborough to Felixstowe. Currently every conceivable coastal stakeholder is making their claim to the sand.

The Marine Planning organisation who are leading the Marine Planning process have recognised recreational water users as stakeholders they need to include but don’t have the data for. The campaign group Surfers Against Sewage is working to ensure surfers, kite surfers, windsurfers get involved.

Ensuring local waves and surf spots are marked on the Marine Planning map might not immediately sound exciting or important. However when a developer decides to build a new marina they will need to consult these Marine Planning maps. It will open up stronger legislation to protect waves.

The increasing popularity of surfing is leading to significantly more pressure on water companies and the Environment Agency to ensure bathing water quality is improved. Currently the European Commission believes the UK is breaching the Urban Waste Water Directive by allowing CSO’s to discharge sewage too frequently. The outcome of the case being investigated by the European Court of Justice is expected shortly.

Campaign groups like Surfers against Sewage working with the water companies have started a sewage alert service to warm water users when CSO’s are .spilling. All this attention is ramping up the pressure and it’s a reasonable bet that the next periodic review will see increased expenditure on reducing CSO discharges.

Future direction in the water industry

Photo: Southern Water's new Brighton treatment works taking shape

Speaking at the British Water House of Lords reception this week, Lord Taylor Parliamentary under Secretary of State for Defra outlined the Government’s view of the priorities in the water sector. Some old favourites came up like the emphasis on innovation and a reminder of the TSB sponsored competition to promote Innovation due to be launched in the Spring.

Catchment management and the need to tackle unsustainable water extraction is a clear focus of Defra attention. It is an area where real progress can be made givern sufficient focus. Defra will also shortly be issuing guidance to Ofwat on how it would like to see regulation develop.

Last week the Government launched a bill to enable it to reduce the cost of water for South West Water’s customers by £50 year – as promised in the last budget. The bill also allows the Government to provide financial support if the cost of the Thames Tunnel escalates.

The Government’s view is that a lot of the proposals outlined in the water white paper do not need legislation, however for those that do a Water Bill will be announced in the Queen’s speech. 

Changing ownership of UK water companies

Photo: construction underway at Peacehaven, Southern Water

The last few months has seen major changes to the ownership of the UK’s water companies. Cheung Kong Holdings has acquired Northumbrian Water, the Canadian investment fund Capstone has bough Bristol Water and this week came news that a Chinese wealth fund has acquired 8.7% of Thames Water. The later deal may have more to do with Santander selling its stake to raise cash due to the Euro Crisis and the withdrawal by investors of funds from European banks.

However its clear that the UK water sector remains very attractive to investors. This is further underlined by the successful bond issues by several water companies like the £250 million bond issue at 4.875% by Severn Trent. Its not surprising the water sector is attractive, given its totally secure cash flow – its customers wont stop using water! The regulated structure means that their income for the next few years is certain. Better still water prices are linked to the retail price index so are currently increasing by over 5% a year – not many businesses have that luxury.

The 64 000 dollar question is has the regulator got the balance right between a fair charge to customers and an adequate return to reward investors? The appetite to buy UK water companies implies not.

The start of a new year is traditionally a time for looking forward. Although much of the news has been about the Euro crisis and current financial problems of most of the world’s major economies. The blog believes it is also a time to be optimistic.

Yes major change is happening, perhaps most importantly there is a huge demographic change underway as the average age in the G20 countries gets older. The post war baby boomers are now reaching their 60’s and this will have a profound impact on demand patterns.

                                                                     Graph copyright International eChem

 29% of the rich Western population are now in the New Old generation of 55+ years. Yet just a century ago, Western life expectancy was only 46 years. It was still only 66 years in 1950. Today, these 272 million people can expect to live until they are 80.

This change in age profile to many more people being ‘retired’ rather than being in their 20’s to 40’s, having families and buying new houses and cars will have a huge impact on demand. People in their 60’s plus don’t need new cars or houses, they have very different demands.

The blog written by my ex ICI Watercare colleague Paul Hodges gives a lot more detail on the changing population demographics and why this will create a New Normal. His blog is well worth reading www.icis.com/blogs/chemicals-and-the-economy/

There is a big paradigm shift underway. But any change like this brings opportunities especially for those first to realise what is happening.

The blog wishes you a successful and happy New Year.

Wessex Water success

Wessex Water is continuing it’s remarkably good performance. They continues to be the best performing water company. Wessex Water have  topped Ofwat’s new Service Incentive Mechanism (SIM) for all areas of customer service as well as the provision of water and sewerage services. On customer satisfaction 98% of customers who contacted them rated their service as good or very good.

Wessex Water have just released their interim financial results and have continued to perform very strongly out performing their capital and operational allowances by more than any other water company. Wessex Water have also won two environmental performance awards for their work on catchment management and work by GENco on waste reduction and recycling. Wessex Water were the best performing water company in the recently published Carbon Reduction Commitment league tables.

Wessex Water have for most of the time since privatisation been at the top of the league tables. They are very unusual in having had the same Chief Executive, Colin Skellett,  since 1988 and several other of their Directors are  almost as long serving. It’s the view of this blog that this can not be a coincidence and perhaps something other companies should consider emulating. 

Water White Paper

Today sees the release of the long awaited Water White Paper. It starts to address what needs to be done to increase the resilience of our water system and tackle the combined effects of climate change and a rising population.

Its main proposal is to move towards catchment management to tackle the issue of diffuse pollution and abstraction licensing. It recognises that only a quarter of our rivers and lakes are fully functioning ecosystems.

While the general tenor is to be welcomed its disappointing that the White Paper is more about talk than action. The legislation needed to tackle abstraction licensing is not planned to be introduced until the next Parliament. Given the current issues with water supply can we really wait that long?

Does showering really save water?

An interesting study by Unilever that monitored Brit’s showering habits has found that having a shower uses almost as much water as a bath – with power showers using more. It seems that on average we spend 8 minutes at a time in a shower. This would cost the average family of four £416 a year (90% is the energy cost) and 90 000 litres of water.

This may not seem revolutionary but behind the figures are two important learning points. Firstly and surprisingly it seems the Unilver work is the first significant scientific study of showering. The scientists used a shower sensor devise to monitor 2600 showers taken by 100 families. All too often people assume they know what is best, this report challenges the assumption that showering will save significant amounts of water. 

Secondly it highlights the importance of thinking holistically. The saving does not come from reducing water consumption – it makes very little financial difference - but from the huge cost of heating the hot water. Perhaps if people want to save money the advice should be to have a bracing cold shower!

Unilever has also published its research into how to bring about behaviour change. The ‘Five Levers for Change’ Unilver identified are:

             

    Make it understood. Sometimes people don’t know about a behaviour and why they   should do it. This Lever raises awareness and encourages acceptance.

              

        Make it easy. People are likely to take action if it’s easy, but not if it requires extra effort.  This Lever establishes convenience and confidence.

              

        Make it desirable. The new behaviour needs to fit with how people like to think of themselves, and how they like others to think of them.  This Lever is about self and society. 

              

        Make it rewarding. New behaviours need to articulate the tangible benefits that people care about.  This Lever demonstrates the proof and payoff. 

Make it a habit.  Once consumers have changed, it is important to create a strategy to help hold the behaviour in place over time. This Lever is about reinforcing and reminding.