As the demands of AMP8 and the ambitious targets of The Environment Act come into focus, water companies need to embrace technology companies much more readily, says Andrew Welsh.
The transition between five-year asset management plan (AMP) periods in the regulatory cycle of the water industry in England and Wales is always a challenging time. The final phase of AMP7 is being carried out during a period of unprecedented public and media scrutiny, especially around the role combined sewer overflows (CSOs) play in discharging pollution to water bodies.
The spotlight has been back on the sector, as Ofwat’s 2022-2023 water company performance report, published on 26 September 2023, said that the majority of water companies have under performed.
As a global water technology provider, helping our customers solve some of the toughest water challenges, Xylem has developed strong relationships with most UK water companies, over many years. We are already having highly productive strategic conversations with some of the most agile water service operators about AMP8.
We are also observing that some utilities still constrain themselves unnecessarily by taking traditional procurement routes, and talking to the same consultants and contractors, year after year, AMP after AMP. Utilities have now submitted to Ofwat their plans for the 2020-2025 price review, and the regulator is pushing for a step change in performance and investment – the value and cost efficiencies needed might be better achieved going directly to water technology companies for some solutions.
The UK Government published its storm overflows discharge reduction plan in August 2022, committing water companies to spending £56 billion between 2025 and 2050 to reduce spills from CSOs discharging to inland waterways and designated bathing waters. This comes after the 2021 Environment Act made it the responsibility of water companies to monitor discharges through any outfall from a wastewater treatment plant, storm overflow or CSO.
That comes on top of the £5.2 billion spend between 2020 and 2025 on asset improvements, investigations, monitoring and catchment interventions required by WINEP – the Water Industry National Environment Plan for phosphorus removal. In addition, the sector’s journey to net zero carbon in England and Wales by 2030, while it should ultimately drive down energy costs, will still be complex – bringing together a range of technologies and initiatives, along with cultural and behavioural changes.
For technology companies like Xylem, that can provide multiple solutions to a myriad of challenges, we are looking for opportunities to show water companies what is possible in terms of their existing assets, along with the new technologies that could deliver transformation on operations and capital delivery. We have invested in an experienced UK water sector business development team, and, alongside traditional routes, Xylem believes there is value to water companies in letting us engage directly with them.
Senior leaders within water companies are invited to make use of our specialists in both water resources and wastewater, along with digital and condition assessment services. It is important that the market is aware of what technology companies like Xylem can do in both water and wastewater, and that they involve us in the conversation with their partners about how they will deliver their programmes into AMP8 and beyond.
Without inviting us in at the earliest stage possible, alongside the consultancies and contractors, talking as a technology company, it is hard to see how they will be able to meet the extraordinary expectations of their customers and regulators. Deep engagement will ensure they meet their challenges. This can be demonstrated with the roll-out of smart water meters – we have been working closely with major UK utilities to provide thousands of Sensus smart meters, which are successfully helping customers reduce water usage.
The technology supply chain can address a swathe of issues, and while we hugely value our place alongside the consultancies and contractors at a couple of the bigger water and sewerage companies, we would like to see that become standard across the sector. It is not about specific products, it is about gaining a complete understanding of what is possible with the technologies that are available in the market.
It is well known that resources within this industry are tight, while the expectations for AMP8 are only growing. The upshot of this is that all water companies should be developing new kinds of relationships with technology providers.
We also need conversations with procurement directors around the challenges the water companies face on funding. Most water companies are still very rigid in the way they want to work with technology companies and suppliers to procure services and are constrained by rules that are getting in the way of the benefits they could be delivering for their customers in the drive for efficiency and innovation. If they keep going down the same well-trodden routes, then they are not going to move the dial.
Barriers to delivery
With two years to go to AMP8, Xylem is seeing an acceleration of AMP7 programmes, and a push to reduce overflow discharges. The early ones are on bathing rivers like the River Wharfe in Ilkley, Yorkshire; the Leam in Warwickshire and the Teme in Shropshire.
The Environment Act (part 5, section 82) legislation requires water companies to monitor rivers, streams – and eventually estuaries – for the statutory parameters of temperature, dissolved oxygen, turbidity, pH and ammonia. The good news is that this is familiar territory for Xylem’s analytics team, as the company’s YSI Sondes haves been used exclusively by the Environment Agency for this exact purpose for some 15 years. By working closely with this partner, Xylem has further developed the YSI EXO platform to be smaller, lighter and lower cost. Xylem’s Innovation Hub in Cambridge has taken this approach further by enhancing the optimisation and efficiency of the EXO Sonde platform.
Trials have also been carried out with most utilities, to verify the system for use in relation to the Section 82 requirement. Interestingly, a number of water companies are already using the technology, but only in their clean water teams.
As many functions within utilities are siloed, their wastewater teams do not necessarily realise the EXO Sonde is already well established in their organisation and has been deployed for years in reservoir monitoring and at raw water intakes. This could mean they can find a much faster and cheaper route to procurement and deployment that does not involve more trials.
Having the technology provider in the room would reveal this blind-spot, reduce costs and result in faster deployment. It reflects the wider discussions required within water companies on how to implement the Environment Act and the need to improve communication around technology and innovation.
While the role of CSOs during intense rainfall is becoming better understood, it is wholly inexcusable in the public’s eyes for stormwater overflows to spill on dry weather days. There are two main causes, the first is infiltration of groundwater into the sewer system, which is perhaps more forgivable than the second – poor maintenance and inefficient operations at wastewater treatment plants.
To eliminate groundwater infiltration water companies might need to carry out a whole network pipe condition assessment, to identify cracks and potential faults.
More challenging is where water companies are not hitting their flow-to-full-treatment (FFT) capabilities at the wastewater treatment works on dry weather days, while discharging through outfalls and overflows. This could indicate that the capacity of works has not kept up with the increase in population growth in the catchment, so perhaps only 80-90% of wastewater is being treated.
It could also indicate that the works has not been upgraded in a timely way, or equipment is not maintained sufficiently. That could be aeration systems, diffusers, blowers and pumping systems – all working below the required capacity.
A technology company like Xylem can help water companies bring their treatment plants back to FFT capability by reviewing the activated sludge process (ASP), pumps and pumping stations. Treatment Optimisation can also deliver reductions in N2O process emissions one of the largest impacts on GHG in wastewater treatment and might be achieved via a range of options and does not necessarily mean large capital investment.
The greatest benefit is likely to be a reduction in energy consumption, which will bring down operational costs and make a measurable contribution to 2030 net zero carbon targets. One example is improving blower efficiency by 30 to 50% by fitting high efficiency blowers to medium-to-large ASPs. The huge rise in energy costs in the last two or three years – more than tripling for some utilities – means payback can shorten to just 18-24 months.
Furthermore, other technologies can deliver more effective ways to target the tightening phosphorus consents required by WINEP. The Co-Mag and Bio-Mag system developed by Evoqua, which joined Xylem in May 2023 are already being employed in Severn Trent Water on a number of sites and in Yorkshire Water at Knostrop and Blackburn Meadows.
Xylem’s teams are also seeing a trend towards sequencing batch reactors (SBRs), which utilities are finding attractive due to their smaller footprint and process enhancement capability. The cost and carbon benefits include greater energy efficiency with no RAS, reduced embedded carbon and less tankering of sewage sludge. There are several larger projects being considered and in design.
This is just an insight of what is available to water companies from Xylem and across the market. Most important is getting closer collaboration between utilities and technology companies at the earliest possible stage.
This is about opening-up a dialogue about the breadth of solutions and how technology companies can address these unprecedented challenges. It is also about having the people in the room that can help businesses arrive at the cost of achieving their outcomes much earlier in the process – by speeding up design, procurement and delivery, and meeting the expectations of customers and regulators in an affordable and timely way.