Information revolution will drive up water quality

The advent of so many computers and intelligence built into the systems that make our modern world work like cars, appliances, mobile phones and water networks is making available a vast source of data that could transform how we run our cities and built environment. IBM has recognized this in its Smarter Planet’s initiative.

Imaginative new Apps are being developed by IBM like Creek Watch. This is a simple application on an iphone that enables anyone to quickly and easily take a photograph and send a simple report on the water quality in their local stream, river or brook.  It means that rather than having to send inspectors out the Environment Agency or water company can get site specific data on the quality of local water courses and identify pollution incidents much quicker.

The Environment Agency is taking this a step further by a new scheme its about to launch that will require water companies to text surfers whenever sewage is about to be pumped into the sea. The Environment Agency will also announce on Thursday that it is publishing profiles on all designated bathing spots. All this information and the power it brings to people to understand what is going on at their local bathing spot will undoubtedly increase pressure on the water companies to take further action to improve water quality. 

It will  ensure that we have a much better understanding of where the real pollution hotspots are ensuring investment is targeted where it will make a real difference, That is in everyone’s interest, water companies, water bill payers and bathing water users.

Push, pull, nudge to save water

Photo source: Ofwat

Ofwat’s new focus report on reducing water consumption is to be welcomed if it promotes debate. It suggests various ideas to reduce the consumption of water. While the environmental case to reduce water usage is clear the financial case from the viewpoint of the customer is not.

Water suffers from two main problems, its too cheap and most of the costs are fixed not variable. Ofwat proposes that there should be much greater use of metering but is this really going to change behavior? In most cases water meters are installed in the pavement outside the property boundary so it is impossible for the customer to read them even if they wanted to.

Smart meters may help but so far it is far from certain these will influence consumption and the cost is currently excessive.

What about nudging behaviour and persuading customers to buy appliances that use less water. Here again the low cost of water is the issue. Typically a dishwasher that uses less water costs considerably more, perhaps £100 yet the annual water saving is at best £5, hardly a compelling financial investment case. Instead the trend of consumers to install power showers is continuing unabated. There needs to be some realism in the debate and a recognition that most customers lives are far too busy to want to worry about water consumption. Other solutions need to be found such as improving social housing by installing showers in houses that only have baths.

Resilience, clarity and reassurance in the water sector

Photo source: South West Water

Increasing resilience is one of several challenges facing the water industry highlighted by Caroline Spelman in her recent keynote speech to Water UK’s annual city conference. It is clear the recent water shortages in Northern Ireland and the floods in Cornwall last autumn have raised awareness of the issues.

Underlying this is the more difficult issue of how to ensure affordability. Here there is no easy answer. Public disquiet over the cost of water is increasing especially in the South West where water bills are highest.  Increasing resilience and improving sustainability is expensive. The answer has to be innovation, thinking outside of the traditional boundaries to find new solutions.

One of the keys is to think about root causes and the old but still very valid adage “prevention rather than cure”. Here the pioneering work of Philip Crosby in his book “Quality is Free” and the philosophy behind Total Quality Management (TQM) can still offer much to the water industry.

A good example of this thinking being applied is the pioneering work done by several water companies on abstraction and catchment management for example, South West Water’s Upstream project. Stopping pollutants getting into our rivers, perhaps by working with farmers to avoid the use of fertilizers close to river banks or restoring dried out peat so that it acts as a sponge to absorb pollutants can be a lot cheaper than massive downstream investment to remove the pollutants from our rivers. A lot more thinking like this is needed in the water industry to find affordable solutions to the twin challenges of rising demand and increasing variability in our climate.

Water retail competition is a distraction

One of the subjects in the forthcoming water White Paper expected this summer is bound to be competition, especially after retail competition was proposed by both Ofwat and the independent Cave Review. This week Deloitte published a new report on retail competition. This confirmed what many of those in the industry already thought, that introducing competition is an expensive process and that the benefits are very limited so it fails the cost benefit test.

Competition may have worked in other industries like energy and telecoms but water is a very different market. It does not have a national network that allows physical transfer, secondly it would need major consolidation from the twentyone current businesses into about six if benefits are to be achieved.

What is far more important to the sector is securing low cost finance for the massive investment needed. Here any move to retail competition could cause debt and equity investors to lose confidence. Any resultant increase in finance costs would dwarf savings from retail competition. Secondly the new Service Incentive Mechanism puts a heavy premium on customer complaints and handling. The experience in the energy sector shows that competition is far from universally popular and certainly wont decrease the number of complaints. Rather than worrying over competition it would be much better to focus on innovation and finding ways to delivery the capital programme more cost effectively.     

Water regulatory cycle likely to be extended

“Thoughtful change” and “we need to be careful not to spook investors” as well as “we need to get it right” were key messages from the Minister for Natural Environment Richard Benyon’s keynote speech last night at the British Water House of Lords reception. Roughly translated this means that we should not expect significant new policies in the water and environment White Papers due this summer.

It does seem at last that the message on how much harm the five year regulatory cycle inflicts on the water sector is getting through. Water company Chief Executives alongside key suppliers all lined up together to make this message very clear. The Minister did promise action on this. But it is equally clear that there is firm support for having an independent regulator. All the positive lobbying by British Water backed up by hard quantification of the cost and some imaginative ideas on possible solutions have had the desired effect. It is equally clear that there is firm support for having an independent regulator. 

The climate has changed. Consultation is now key in Government and there is real opportunity to shape the future direction of the water industry. But is does require a real commitment to engaging with Government and senior civil servants. and actively working to shape the forthcoming white paper. The water sector can learn a lot from how effectively other sectors have managed this.

Water process safety: you don’t improve what you don’t measure

Photo source: Anglian Water

Virtually every Water Company has safety as its top priority. The water industry has made significant steps forward since the days of the Camelford incident reducing the likelihood of such incidents happening in the future. 

But as the Prime Minister recently said: “Good health and safety is vitally important. But all too often good, straightforward legislation designed to protect people from major hazards has been extended inappropriately to cover every walk of life, no matter how low risk”.

One of the keys to improving safety is measurement. Here the water industry can learn from the chemical industry – an industry that has been at the forefront of developing process safety management. Many organizations that want to improve process safety struggle with defining the right metrics. All too often the emphasis is on lagging indications like accident rates. The chemical industry has lead the way in recognizing that to be pro active on safety its essential to also have some leading indicators.

From a number of discussions with experts in this field, it is clear that there are sometimes differing views on exactly what should be measured and there is acceptance that, in some cases, the measures need to be site and process specific. One thing which is universally agreed, however, is that leading indicators are highly valuable to give an early warning that things could go wrong.

For those new to this subject, the guide from Center for Chemical Process Safety, 'Process Safety - You Don't Improve What You Don't Measure' , is an excellent starting point. Click here for link

Water meters to become compulsory?

Yet again metering water metering is becoming a significant issue. The papers were full over the weekend of stories about Defra accepting the case for basing all water charges on metering as well as the potential for water shortages in the South West after the exceptionally low rainfall in 2010.

The coalition has promised to review water charges and in particular tackle the anomaly of customers in the South West paying the highest water bills in the country. Annual bills are £723 compared with £367 nationally.

But installing meters is expensive, at about £200 a time and there are big issues over how to install meters in buildings that have been turned into flats, an increasing trend in most major cities. It can be very difficult and consequently costs can be excessive.

The debts of the water companies due to unpaid water bills are increasing fast up 20% last year. In London water bills will have to increase significantly to pay for the Thames Tideway tunnel. Further increases on top to reduce bills in the South West and pay for metering will be very unpopular and difficult to sell.

So although installing water meters may sound like a sensible idea to reduce water consumption and ensure people pay for what they use. The prospect of a significant increase in bills will not be an easy message for the politicians to sell. Defra were due to launch a consultation shortly but the debacle over the forest sell off is likely to delay any decisions on water meters.  Expect much talking but little action.