Water & Wastewater Treatment

062 www.atiuk.com www.wwtonline.co.uk | WWT | january 2015 | 7 Comment F or many, a new year is seen as the natural time to get leaner and stronger, tighten the belt and ap- ply a stricter discipline when it comes to both your lifestyle and finances. Water companies might be above such meaningless annual cycles, but even they will be getting in the mood for a bit of belt-tightening this January, as they digest the final determination from Of- wat on what they can charge customers during the 2015-20 period. If water companies had already shown a willingness to whip themselves into shape - by proposing real terms price reductions of 2% in their business plans submitted in December 2013 - then Ofwat has certainly played the part of the tough gym instructor, pushing them to achieve more. The verdict, out- lined first in the dra€ determinations and now in the final determinations PR14: More than just a fad diet for PR14, is that water companies must achieve 5% real terms cuts in custom- ers' bills for the five year period. While investors in water companies are also being asked to accept lower returns on their capital, the overall message is that the utility firms must learn to do more with less. "Now the hard work begins," Ofwat chief executive Cathryn Ross warned. But it doesn't end there. The regula- tor is trying to bring about culture change within the sector so that it puts customers at the heart of everything they do – an easy slogan to say, but much harder to put into practice. The reasoning behind any project under- taken, large or small, needs to be the outcomes delivered that customers want, such as better customer service, security of supply, the efficient use of water and a cleaner environment. Better use of resources in pursuit of these goals will be governed by the all- encompassing measure of Totex rather than an artificial division between Capex and Opex. It's a significant shi€ to achieve, and sometimes a practical example of best practice can be more valuable than any number of well-meaning words. That's why Ofwat has highlighted two busi- ness plans – those of Affinity Water and South West Water – which it believes JAMES BROCKETT EDITOR james.brockett@fav-house.com are at the top of the class. Some of the proposals contained in them – such as Affinity's direct engagement with customers on reporting performance or South West Water's willingness to share its profits with customers through a 'Watershare' scheme – are radical, and it might be some time before such ideas are reflected nationally. However, if the industry is to achieve something qualitatively better for itself, rather than merely a more austere version of what went before, then companies that learn from each other and compete on innovation are essential. As any New Year dieter knows, gains made by a healthy discipline in the short term can't be consolidated unless there is a meaningful mindset change that can persist for the long run. It's one thing to pick up an exercise programme and run with it for a few months, but quite another to make a successful permanent change in lifestyle. A firm regulator, like a good gym teacher, can help, but ultimately the culture change and buy-in must come from within. The water companies are certainly making the right noises at the moment. It can only be hoped that rather than being a passing fad diet, PR14 turns out to be the start of a healthy regime that can last from one year to the next. Follow us on twitter @wwtmag Industry view Keith Hayward, National sales and marketing manager Hydro International's European Wastewater Division "It is new so it can't be part of a frame- work." This was the baffling response of one uK water company executive, when challenged to explain why a new technol- ogy I was proposing could not be included as a preferred solution in a procurement framework agreement. Innovation, we are constantly reminded, is the lifeblood of a healthy water industry and senior water company representatives have been keen to pin their "innovative" colours to the mast at recent industry conferences. Innovation needs open minds and open doors So why is it, when push comes to shove, that there is a disconnect between supporting technological advance and using it? The Government's Chief Scientific Adviser Prof Mark Walport just published a fascinating report "Innovation: Manag- ing Risk, Not Avoiding It" which explores through case studies and evidence the complex business of balancing technologi- cal advancement and risk. In it he reminds us that an unintended consequence of economic regulation for monopoly providers, such as the water in- dustry, is that innovation can be driven out and resilience reduced, unless the duty of the regulator includes sufficient provision to ensure that doesn't happen. So how can water companies be en- couraged, or incentivised, to move away from traditional technologies and manage the risk of trying new ones? How can we avoid the almost comical 'jobsworth' scenario I experienced recently where, having being encouraged to submit a new technology for bridgeless sludge scrapers to be considered for a framework, I ended up being passed between operations and procurement, being told by each that in- novation was the other's responsibility? What is the future for innovation in water companies when a technology that ticks all the Totex boxes for lifecycle costing, can't go forward because it's not 'standard', or 'established innovation', as was described at one meeting, or does not come within the contractors upfront capex spending limit? Hydro is introducing a fine grit removal technology, well-proven at hundreds of installations in the USA, but so far never installed in the UK. So I'm laying down a challenge to the Heads of Innovation at each of the 12 Water Com- panies: We have a brand new pilot plant ready to demonstrate, free of charge, its maintenance and energy-saving benefits for wastewater treatment. So which of you will be the first in 2015 to try it out? For more information from Hydro International's uK Wastewater Division please call 01353 645700, email enquiries@hydro-int.com or visit www.hydro-int.com. sponsored by

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