Imagine a business where availability of raw material is unpredictable and unable to keep pace with rising demand, customers mostly take supply for granted and are wasteful in their consumption, plus the system – albeit improving – loses up to 27 per cent of your product. Welcome to the world of water.
The average person in the UK uses more than 150 litres of water a day, with this figure rising by about 1 per cent a year since 1930. We are each using almost half as much again today as individuals were in the 1970s and there are now more of us. Demand is a problem.
This problem is passed directly on to the supply and delivery networks, asset management and maintenance teams. Going round the UK system daily are 17 billion litres of water supplied to customers and 16 billion litres of waste water and sewerage returned to be treated. In London and the Thames Valley, the pressure is quite literally on 20,000 miles of water pipes, some of which are ageing, 150-year-old cast-iron conduits.
While leakage rates have improved on average by more than 35 per cent since industry privatisation and the highs of the mid-1990s, annual figures still exceed 20 per cent for nearly half the utility companies in England and Wales.
As well as responding to the 2013 Water Bill, the water industry is now working to deliver on its current five-year Asset Management Plan (AMP5 2010-15), while preparing for the next wave (AMP6 2015-20), plus the regulator’s Ofwat Periodic Review (PR14) and price limits later this year.
To complete the near-perfect storm of challenging delivery circumstances under which water asset managers must operate, climate change impacts and extremes of weather are headline news. From flooding to drought, deep freeze to heatwave, these events carry implications not just for peak performance of assets, but also for their condition going forward.
Overall, water companies will invest some £5 billion over the next 12 months and their contribution to the UK economy in 2012-13 has been calculated at £15 billion. During the worst period of the recent floods, some water and sewerage companies were spending around £100,000 a day protecting assets, such as treatment plants, and keeping sewers flowing.
Business as usual is not a sustainable option and according to Neil Dhot, head of corporate affairs at Water UK, while long-term investors in the water sector understand the implications of climate change adaptation and resilience planning, the future is as much about change management as asset management.
“Water companies will continue to provide the billions of pounds of investment needed each year to manage, maintain and create new assets required,” says Mr Dhot. “But they also acknowledge the need to focus on different and innovative new ways of providing services and protecting the environment that don’t necessarily involve big capital and infrastructure projects, for example through greater emphasis on catchment management.”
The Infrastructure Carbon Review, published by the Treasury last year, effectively charges the construction industry with delivering much of the targeted decarbonising of future water networks.
However, different speed, if not conflicting agendas, appear in play, as director of sustainability at Balfour Beatty Construction Services UK Paul Toyne explains. “Construction has been addressing mitigation of carbon emissions, government has set carbon budgets and we have made much progress,” he says. “In comparison, the pace of adapting our infrastructure for future climate change has been slower and given less focus. We need to do both.”
According to Dr Toyne, a strategic, cross-sectoral approach to such systemic change must start with rethinking water-use priorities, if future performance is to match sustainable quality, cost and resilience expectations.
“Do we really need treated water to flush toilets? Tackling this issue would unlock significant efficiencies – the challenge is designing the system to do this at the same time as keeping industry and society supplied,” he says. “We need to decouple greenhouse gas emissions from the energy input, and think really hard about what and who needs treated water.”
If associated behaviour-change represents the missing link between resource scarcity and stewardship, perhaps it is time this summer to spare a thought for the asset management professional as you turn on the lawn sprinkler and consume 540 litres of water an hour.
