UK water industry regulator Ofwat will shortly publish its 2024 price review, setting targets for the 2025-30 investment period. It should spur companies to collaborate and employ systems thinking to achieve net-zero, writes Andrew Heather.
Each of Ofwat’s five-yearly price reviews focuses on one or more objectives towards which English and Welsh water companies are expected to make progress. Past reviews have driven advances in drinking water quality, investment in the water distribution network, and major upgrades of sewage treatment. The price reviews aim to balance improvements in outcomes for customers and the environment with the cost of bills and return for investors.
2025-30 heralds a new era. In 2020 industry body Water UK made a commitment that companies would collectively achieve net-zero by 2030. In practice, offsetting will be required to achieve this, but the pledge and accompanying route map set the goal: the water industry is set to take a leading role in meeting the UK national goal of becoming net-zero by 2050.
2025 is when the companies begin the race in earnest. And reductions must be achieved while undertaking massive capital and operational improvements.
Improving sewer networks will be one of the priorities for the 2025-30 cycle, ushering in a 25-year programme of activity to increase capacity, reduce leakage and prevent overflows, guided by integrated drainage and wastewater management plans, prepared by each company.
Water security is also an acute concern in the south and east of England. Rapid – a task force of Ofwat and energy and environmental regulators Ofgem and the Environment Agency – has been set up to oversee the development of new water sources, involving several billion pounds of investment to maintain supply in the face of rising demand and climate change.
Let’s think differently
The industry is well set up to meet these challenges. Over the past 25 years, vast numbers of construction projects and operational improvements have taken place. The delivery track record of water companies is excellent, with a proven funding model and a well-developed supply chain, and net-zero has been on the agenda for a long time. Several companies have pioneered carbon management in the UK and achieved impressive reductions (and cost savings) already.
But committing to net-zero demands we think and act differently, employing a systems thinking approach to problem-solving and involving multiple participants.
Consider a natural flood management project, which as well as protecting houses and businesses may enhance the quality of water in a catchment, benefiting water supply. If the solution is creation of a managed wetland, then there could also be environmental benefits for agriculture, biodiversity, air quality and carbon sequestration. Such a scheme could be collaboratively funded by water companies, local authorities and farming environmental grants.
Similarly, consider a sludge treatment centre which produces biomethane, and can recover phosphorous and high quality biosolids that will support emissions reductions of our heating networks, industrial processes and agriculture.
For such systems thinking to become more widespread and practical, some hurdles need to be overcome:
We have to work with people we have never worked with before
Giving the inaugural David Bellamy lecture at Buckingham Palace in 2013, Professor Chris Baines, a renowned environmentalist scientist, spoke of the need for “unholy alliances” between environmentalists and large corporations, for example, to restore ecological integrity to our landscapes.
We must share calendars and synchronise watches. Different planning cycles are often cited as a big challenge to multi-agency collaboration. Problems and objectives that require collaboration between industries such as water and energy need to be identified early if they are to be addressed effectively. Being aware of and learning to work to each other’s timescales – or even better, to synchronise timescales – will be a major enabler of collaborative working and is worthy of effort to develop well.
Open minds required
In guidance issued to Ofwat in February 2022, the Department for Environment, Food & Rural Affairs, Defra, called for more nature-based solutions (NBS). ‘Hard’ engineering solutions can sometimes be replaced entirely with NBS, or combined with them, avoiding or reducing the consumption of construction materials. Each project requirement should be looked at with NBS in mind. Sometimes, education and enforcement might not be enough to prevent contamination of rainwater drains from harming a stream; sometimes a wetland will be needed to treat a combined sewer overflow; and sometimes we’ll still need a storage tank to catch the overflow, sending it on to the treatment works once the storm has passed.
Treasure what we have
Ofwat is showing an increasing interest in the performance and longevity of the existing asset base. Asset management is key to gaining the greatest service and value – and ensuring that existing assets can be enhanced and augmented to meet future needs. Good asset management can also support net-zero by timing asset renewal to effectively balance operating and construction emissions.
Asset management is another example of cross-disciplinary working, addressing the whole lifecycle of assets, and how they work within systems. To pursue and attain net-zero requires asset management across systems.
Organisations and sectors have to work together, as none can attain net-zero alone – each and every one has blockers that can only be overcome by working with others. Doing so will not only enable decarbonisation and sequestration, it will also produce new synergies, helping money to go further and delivering better outcomes for companies, shareholders and society alike.
- Explore nature-based solutions and what they could do for you
- Find out about our ‘seven strengths’ in asset management
- Read our vision for sustainable water resource management
- Discover how we’re helping to safeguard England’s water future