Utility Week

UTILITY WEEK | AUGUST 2021 | 13 Special report on decarbonising water Concluding remarks Maria Manidaki, net zero discipline lead at Mott MacDonald, and Craig Lucas, director - energy transformation, at Mott MacDonald, refl ect on the fi ndings of the research. H aving worked closely with Water UK to draw up the Net Zero Routemap it is incredibly exciting to see how the strategies of individual companies are beginning to take shape in response and how varied their planned journeys to 2030 seem to be. Their stories told in this report underline the gusto and passion with which they are attacking the challenges ahead and, as expected, just how big these challenges are. As they point out, all kinds of new technological solutions will be necessary to cut the very stubborn process emissions and from HGVs, as well as provide energy storage solutions too. Cutting carbon emissions from energy, which historically has been a big contributor to water companies carbon footprint and operational costs, represents a tricky puzzle as they are forced to weigh up complex choices against a landscape of changing policies and markets. There is evidently a … ight from the grid, as water companies can see (for example), that onsite renewables will potentially yield dividends in cheaper energy and reducing reliance on the networks. But should they push hard now to cover their own needs from onsite renewables by 2030, or proceed at a slower pace and contract for the balance? And for those that want to self-generate as a way to lever their land resources, what is the best way of making that investment? Private PPAs are clearly working well for those that have pioneered these types of partnerships with investors, but how much scope is there for those with less straightforward sites to strike good deals? Or how do you match supply with demand when storage has a big question mark over it? The picture is being made more complicated too by regulatory change from BEIS and Ofgem who are attempting to recalibrate charging models and correct distributional issues. The reality is no one can be sure how network charges will evolve over the lifetime of an infrastructure project and in many cases, there are no absolute answers. And this makes it even more challenging for water companies to commit to di" erent long-term options with certainty. But as water companies navigate this di• cult terrain, there are a few solid markers emerging that could help them on their way. Firstly, cutting energy use is an absolute no brainer – energy is expensive – and using it more e• ciently should be any organisations absolute priority. Cutting energy can also bring other co-bene˜ ts for the customers and the environment, especially when nature-based solutions are starting to be deployed in the sector at a faster pace. Secondly, striking the right balance to enable water companies to invest in meeting their green targets will need to be given greater consideration in the next price review. Thirdly, there is huge expertise in both water and energy as both utilities grapple with achieving net zero. Kindling a greater cooperation at both a strategic and local level, can only be a positive step. an intermediary, and use a corporate PPA. We may also have to consider investing ourselves. What's the biggest challenge facing you? The biggest challenge is delivering the 2030 net zero tar- get with 80 per cent renewables, while trying to deliver the current renewables target. It's not yet clear how we will get there. The big risks going forward are twofold. First, whether there is enough capacity on the networks for renewable power. We're working with networks on a scheme-by-scheme basis and we need to be mindful of that.It's ok at the moment, but things may well change 9-10 years down the line. Onshore wind will be needed to meet 80 per cent renewables. However, it's di• cult to do onshore wind development at the present time. It needs support from local authorities/ planning authori- ties – they need to ear mark land for renewable energy development in their plans – but current government policy is not conducive. The second big risk is Ofgem's proposed renewable levies. This has the potential to erode opex bene˜ ts from the PPA contracts we have entered into. transformation, at Mott MacDonald, refl ect on in association with "The PPA model is yet to be proven for ageing infrastructure, but we think 2021 will be a real breakthrough year because we've moved from trying to work with solar builders to partnering with investors."

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