Utility Week

34 | MAY 2021 | UTILITY WEEK Operational Excellence Analysis The role of data sharing in water transformation Industry leaders met at a Utility Week virtual roundtable in association with Microsoft to debate the benefits, barriers and solutions to data sharing. Denise Chevin chaired the meeting. The context of the discussion Water companies face huge pressure to improve across a number of areas, including leakage and customer service, while adapt- ing to climate change and delivering on a pledge to become net zero by 2030. With data collection at the heart of so many water companies' activities, this vir- tual discussion looked to explore whether the sector was leveraging data to best attain these and other ambitious goals set out by Ofwat and in the sector's Public Interest Commitments, and how could data be col- lected and shared across companies to accel- erate this process. It is a timely moment to engage water companies and regulatory experts to debate these important questions. Water companies are gearing up to bid for a share of Ofwat's new £200 million innovation fund, which is encouraging collaboration and the sharing of ideas and processes. And secondly, Ofwat is in listening mode as it starts a series of consultations to prepare the groundwork for its next price review (PR24). Collaboration makes sense – but there a number of barriers in the way There was a firm view that greater collabora- tion makes sense across water companies. There was therefore support for Ofwat's £200 million innovation fund for water to help tackle the huge challenges presented by climate change and population growth – as it was agreed that it's not sensible for 17 companies to all be trying to solve these questions individually. Working on prob- lems together could provide better value for money. Ofwat has confirmed that it is advocating an open data approach to successful projects so that customers around the country can potentially benefit from lower bills and a greener future. As a number of participants also pointed out, there is a great deal of collaboration already in the sector and data that is shared or made openly available for a number of purposes, including leakage and customer measure of experience. "We do gather data collectively, for exam- ple to review where we are on carbon as a sector," explained one participant, adding, "and much of the regulatory reported data used for benchmarking is all gathered in the same way and available." The need for data standards and structured data A key theme to emerge from the discussion was the lack of standards in the way data is collected and presented across the sector, which makes it difficult to share in a mean- ingful way. It was felt that before data could be shared companies "must get their own house in order". To be able to meet these demands, the water industry must rely on combining con- sistent, accurate and reliable data to gen- erate insights that can be used to improve knowledge, understanding and decision making. As participants pointed out, there was sometimes not even consistency within organisations, let alone across different companies. It was agreed that teams need to collabo- rate and agree upon common standards for defining and modelling key business, and how data about these can be improved and shared across information systems. An example of where information was o"en not generated in a standard way was environmental data collected locally in com- panies' work with farmers, with whom water firms tend to work closely on catchment management and also in terms of controlling run-off chemicals into water courses. It was thought that the UK Water Industry Research (UKWIR) and the Water Research Centre would be well placed to come up with more standards around structured data. It was also thought that technology companies could play a key role. The pressure of competition The fact that Ofwat uses a number of regula- tory tools that involve comparing the perfor- mance of water companies means they see themselves in competition with each other, even though they are regional monopolies, because they can potentially make profits by being efficient. One participant mentioned that this was particularly strong in retail with incentives such as SIM or C-MEX, where the company ranking for customer service makes a big difference to allowed revenues. That can lead to companies being reluc- tant to share advantages they have, includ- ing things like open data. So while they generally saw the benefits, there will always be a challenge from shareholders to keep the competitive advantage. Key points • There is widespread support for greater data sharing as a means of tackling some difficult and complex issues facing water companies. • There is an urgent need for the sector to come together to agree on methodology and standards for structuring, collecting and reporting data as a foundation for data sharing. • Water research bodies are best placed for facilitating this – though technology companies could play a role. • Regulatory incentives need to be rethought to encourage more collabora- tion and less competitive behaviour over and above those offered in the Ofwat's innovation fund. • Collaboration on measuring per capita water consumption, which has changed during the pandemic, is a timely and a much-needed area to pool resource and share information.

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