It is time for water regulation to switch focus to making the sector a leading player in the circular economy.
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We are at a tipping point in the direction the water industry chooses to take,” says Black & Veatch Water Europe executive managing director Scott Aitken.
“Is it lower bills now but the risk of significantly higher prices later to fund the infrastructure we need to guarantee supplies? Or do we spread the cost more fairly over the generations?”
Water price review
Regulator Ofwat’s focus in the current price review discussions for the next Asset Management Plan spending period between 2020 and 2025 is very much about delivering lower bills. But at the same time the industry and the country need to be considering how to mitigate the impact of population growth and climate change and make sure we have the water resources our children will need, Aitken explains.
He is 100% behind the National Infrastructure Commission’s recent report Preparing for a drier future.This urges Ofwat and the water companies to consider in their near future plans some more long term strategic investment, particularly in water transfer, that would save billions of pounds over the next 50 years. Investment of £20bn now would be half the £40bn price of doing things later, NIC says.
For an increase of £10 per household we could invest more strategically in infrastructure
“I am concerned about the inter-generational risks, of making decisions that will pass excessive costs on to the next generation so we can have cheaper bills now,” says Aitken. “At the moment regulation is incremental and costs are controlled in an incremental way, with Ofwat signalling it wants lower bills. But for an increase of £10 per household we could invest more strategically in infrastructure and create national and local networks that would mean people would not be faced with drought. I am worried that Ofwat is not thinking like that.
“Reactive spending following a future drought is always going to be more expensive than considered investment over time.”
Affordability, customer engagement, resilience and innovation are the four pillars of the PR19 price review discussions.
“That’s as it should be,” says Black & Veatch consulting services director Mat Fairfax. “All the future projections say that demand management is as vital as new resource options. But circular economy solutions that involve reuse and transfer – not just within regions but with those who have more than they need – should be just as high a priority.”
Reuse and recovery
There is so much more reuse and recovery work that could be factored into plans for the near future, Aitken says. “Waste water treatment plants are production factories. Yes they are there to treat waste but there are opportunities to produce energy and recover nutrients such as phosphates without which we can’t grow food, as well as recycling water back into the supply side of the system.
“With a basket of measures and strategic planning we wouldn’t have to spend a lot of money later that would mean bills increase sharply in the future,” he says.
Aitken and Fairfax both point to Singapore as an example of what England, and in particular East Anglia and the South East could achieve. “We talk a lot about drought and scarcity in these regions but in reality we should change the conversation to one about a drying climate. We can learn some good lessons from places, like Singapore, with limited water resources,” says Fairfax.
Reactive spending following a future drought is always going to be more expensive than considered investment
Black & Veatch has been involved in development of the country’s water supply systems since 1922. Its Singapore office is the company’s global design centre for water and a centre for excellence for desalination.
A severe drought in 1963 pushed the Singapore government to recognise that its future economic success depended on a stable water supply. “A drought in London, where the Underground had shut because it had to cut off its sprinkler system and office towers closed because they had no air conditioning would cost the city’s economy £300M a day, that’s £1.5bn a working week,” Fairfax points out.
In Singapore water supply underpins every government decision. “Every other policy had to bend the knee for water survival,” said prime minister Lee Kuan Yew in 2008, looking back on how the policy had developed.
Most wastewater is now reclaimed and recycled at facilities such as the Jurong Water Treatment reclamation plant designed by Black & Veatch. Latterly desalination has been added to the mix, with the country building the second largest seawater reverse osmosis plant in Asia dealing with 318,500m3/day.
Construction of the Marina Barrage turned Marina Bay into an urban reservoir as well as the centerpiece of a new financial and business district.
And Singapore’s Ulu Pandan wastewater treatment and water reclamation plant is winning global awards for processes that reduce energy use and maximise biogas production for energy generation. Black & Veatch in partnership with Aecom is consultant for the plant.
“We are at a tipping point, yes,” notes Aitken “but that makes it a very exciting time to be involved in the water sector here.”
Innovation is the glue that will hold all future developments in water together.
Black & Veatch has been working with Yorkshire Water on its Workstream 69 lean reliability centred management (LCRM) programme for all its assets. LRCM looks at what a process is intended to do, what factors stop the process from delivering and then works to mitigate those factors, with interventions happening at optimum cost point rather than the higher costs of repairs following a failure.
Nce, workstream 69, b&v
The firm is also working with another water company on an app to anticipate pollution risk from storm events and stop storm water pollution outflows into rivers by identifying preventative maintenance and network management regimes. In the last 18
months, since the app has been in use, there have been no stormwater pollution events.
And on a broader industry basis, Black & Veatch’s Innovation Platform is working with water companies, municipal authorities and technical experts to support the circular economy. Technologies for reuse of municipal wastewater, fat berg oil and grease, industrial wastewater and organic municipal waste are being explored.