Water & Wastewater Treatment

14 Water & Wastewater Treatment March 2014 COMMENT wwtonline.co.uk E lectricity Market Reform (EMR) aims to address the challenges currently facing the energy market by attracting the investment needed in low carbon electricity, while also achieving the Government's objectives on security of supply and affordability. Npower fully supports the objectives of the EMR proposals, and recognises the need for the UK to have a modern and efficient energy infrastructure with a diverse mix of technologies to ensure our economy can grow and compete globally. However, there are a number of concerns raised by those in the UK water sector, who will be impacted significantly by policy discussions on the future of the UK energy market. Since EMR was announced in 2010, Npower has been listening to companies' views on legislation - including those of representatives from the water sector - and feeding them back to Government. To date, Npower has hosted four customer and stakeholder roundtables on EMR, conducted its own 'consultation' to ensure time-poor businesses had their say during the process, and presented its findings to Government at every stage as part of RWE's membership of all of DECC's Expert Groups for EMR. Impact During this ongoing process, water companies have continued to raise concerns about the impact EMR will have on their operations. As a result, Npower launched EMR Explained, an initiative designed to help educate industry on EMR and continue to give it a voice in the ongoing consultations around EMR's design. As part of this initiative, Npower consulted further with major energy users through its EMR Pulse survey and found that nearly all (97%) are worried about how EMR will affect the cost of their energy. Further, 91% are worried about the ability to forecast costs and 86% of businesses highlighted the impact on UK competitiveness as an area of uncertainty. In particular, water companies are worried about cost certainty, and want more information from Government on the impact of each part of EMR in terms of financial and administrative cost. Businesses also want greater transparency on how EMR schemes will operate, with further details on how costs will be set and markets regulated. Finally, we know water utilities want a system with longevity so the scheme is not affected by changes in Governments within short-term parliamentary cycles. Organisations in the water industry are high energy users, bringing significant cost pressures. By having to operate within the five-year investment framework to deliver security to consumers, it can mean water companies are further exposed to the impact of volatile energy costs compared with other industrial sectors. Energy managers are seeking early and detailed information around the energy market so they can prepare the ground internally for any potential changes in energy cost. Procurement Intelligent procurement of energy is one way to protect against cost pressure, and helping water company energy managers deliver an efficient energy purchasing strategy for their organisations is a key objective for all energy suppliers. Another key practical means of ensuring a business is well prepared for the impact of EMR – in whatever form it takes – is good energy management. Measuring, monitoring and minimising energy use are the key steps water companies can use to help take control of costs. Businesses can also manage energy costs through demand management, such as responding to Triads – half-hourly period of peak energy demand used to set transmission fees (TNUoS), which appear as pass-through charges on many major energy users' energy bills. The amount these businesses are charged for TNUoS depends on how much energy they use during these three half-hour periods. Organisations that have TNUoS as a pass-through price on their bill can actively lower their consumption from the grid during times when a Triad is predicted, and therefore reduce their TNUoS costs. Water utilities can estimate how much they could save by responding to Triad warnings using Npower's free Triad savings calculator tool at http://bit.ly/TriadCalculator. In addition, many water companies are actively looking to develop self- generation, such as small-scale hydro, solar and wind, as a practical means to manage energy costs, and potentially generate additional income streams through Power Purchasing Agreements (PPAs). PPAs also allow businesses to source energy with third party renewable generators, through a process known as PPA netting. As part of Npower's EMR Pulse survey, businesses said sourcing energy in this way has a number of benefits. For example, 53% said it gives price certainty, while almost half (47%) think it demonstrates a business' green credentials. However, there is uncertainty among some businesses on the impact EMR will have on these contracts. To secure the country's power future, it is clear that EMR's impact on the UK energy landscape will be considerable. But, while we are at a critical stage of economic recovery, the impact on industry is something that needs to be given prime consideration. nnn Electricity Market Reform is the biggest set of proposed reforms in the electricity market in decades. Npower's sales & marketing director for industrial & commercial markets, Wayne Mitchell, discusses the concerns raised by major energy users, and looks at the steps the water industry can take to protect itself from future energy risk Water sector needs clarity on energy policy S e r v i c e | V a l u e | R e s p o n si b il i t y M e m t h a n e ® c o m b i n e s t w o technologies with proven track records; Veolia's anaerobic biological wastewater treatment and Ultra Filtration membrane separation to treat high strength dairy wastes. • Reducing effluent charges • Generating biogas • Small footprint for an economical and easy to operate solution • Easy recovery of nutrients for fertiliser production • Improved environmental performance through a lower carbon footprint • Water recovery for re-use within the plant Water is too valuable to be used only once Veolia's Memthane® Anaerobic Membrane Bioreactor delivers high-energy efficiency and crystal clear water from high strength dairy wastes. www.veoliawaterst.co.uk or call us on 01628 896900

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