Utility Week

14 | NOVEMBER 2022 | UTILITY WEEK Water Conference Water asset managers must plan for an uncertain future Planning for the great unknown The effects of climate change mean assets in the coming decades will face more gru- elling conditions which further challenge resilience. Jonathan Chappell, senior policy advisor at the National Infrastructure Com- mission (NIC), said threats such as prolonged drought, higher rainfall and increased veg- etation growth mean infrastructure will face more costly challenges in the future. "If we're setting out a budget to 2050 or 2055 we have to bear in mind infrastructure will be more expensive to run because it will be fac- ing challenges it doesn't face now because of climate change." These increased costs are, as yet, not known. Out of sight… out of mind? With so many assets underground, a specific challenge for the water industry is that the owners are o…en unaware of their condition. Chappell said the NIC's call for evidence on its work highlighted this concern from the water sector. He said there are potential areas of mis- alignment between short and long term objectives because regulatory cycles are five years but asset management cycles are con- siderably longer. The NIC's work on assets within climate and resilience will consider whether there is a maintenance backlog and whether it could be more efficiently supported by technology to monitor under- ground assets. Renewal rates are "shockingly low" Asset replacement rates and asset lives were also raised, revealing that in some cases cur- rent replacement rates are up to once in 400 years. That was echoed by SES Water's head of asset strategy Daniel Woodworth, who described mains pipe renewable rates for AMP7 as "shockingly low". He said the sec- tor currently does not measure the condition of all its assets, which makes it impossible to know the "right" rate of replacement. How- ever, he said the current rate was clearly inadequate. People are the most crucial asset Although operators are the life blood of asset health and their expert knowledge o…en the key reason some assets continue to operate at all, there are also drawbacks. Tim Gadd, head of strategic advisory services at Bin- nies, noted that operators do not always know the warning signs for failure, mean- ing competency frameworks and interfaces should be holistic rather than focus on a sin- gle outcome. He called for greater clarity of asset health management to be escalated to senior teams within water companies. Furthermore, he suggested those expe- rienced people working closely with assets could add further value by joining up what asset health teams have done with overarch- ing targets such as key performance indica- tors set by regulators. A sentiment echoed in other sessions during the day was that empowering all staff to see how their role may impact the wider systems and col- leagues across the organisation. Better knowledge and understanding of how roles interact would assist teams to pro- vide one another with the most relevant data rather than risk it being considered a box- ticking exercise. Affordability should not override investment needs Affordability considerations could eclipse the work needed to make assets resil- ient. Keith Waller, from the Construction and Innovation Hub, said the challenges and objectives around carbon and climate change are difficult enough without thinking about the cost of living crisis. While pressure on household bills can- not be overlooked, waiting to invest in asset health could ultimately add to those costs for future billpayers. PR24 needs to be transformational Those working in asset health are acutely aware of this and are cautious that the next price review in 2024 will give the sector space and funding to prioritise asset health as required. Gordon Rogers, United Utilities' head of long-term strategy, said: "PR24 needs Regulatory timeframes misaligning with long-term investment needs was the central conundrum addressed at Utility Week's Water Industry Asset Management Conference. Here are some key takeaways.

• Cover