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Utility Week 1st May

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24 | 1ST - 7TH MAY 2015 | UTILITY WEEK Operations & Assets Market view I t is clear the water industry is facing many challenges as its operating and regulatory landscape changes significantly over the rest of this decade. The implications of the PR14 price review and the opening up of the sector to enable business customers to choose their water supplier from April 2017 will, on the one hand, deliver freedom of choice, and on the other, drive competition between the water companies as they strive to retain and attract large water users. We also have the impact of AMP6, the asset management programme covering the second half of the current decade. Ofwat has set down a number of ambi- tious targets for the industry that will undoubtedly put the robustness of existing infrastructure under severe pressure. The targets include: a significant decrease in the level of water loss through leakage; a reduc- tion in the time lost through supply interrup- tion; flood protection targets covering 4,700 homes; water bills reduced by 5 per cent over the period; up to 50 cleaner beaches around the UK; and greater scrutiny concerning cap- ital expenditure so it delivers real and tangi- ble value. The conclusion from this ra of targets and objectives is that for the vast majority in the industry, the old maxim "getting more from less" will have to ring true. The search for efficiency savings, a continued longer- term and holistic approach to asset manage- ment and the adoption of technologies to drive operational effectiveness, will become the pillars on which water companies base their strategies. This will be tough for an industry noted for its conservative outlook. As cost and operational pressures are applied, the ability to simply pour concrete and build new assets will be compromised. Instead, any strategic approach should focus on the most efficient way to upgrade, mod- ernise, enhance and improve the sector's existing asset base so the challenging targets set by Ofwat can be successfully met. A prime example of such operational pressures has been the recent change that sees all water companies assume respon- sibility for private sewers, including main- tenance and, in a lot of cases, significant improvement. This has been the result of initial substandard installation procedures within the construction sector, leading to Ofwat taking action. Water companies need to undertake this additional work cost effectively, but at the same time ensure qual- ity and performance is not hindered. So, what can the water sector learn from other industries facing similar pressures? It could be argued that the industry oen views itself as unique with regards to its function. However, at its heart are two uni- versal processes: the delivery of clean and safe drinking water; and the disposal and treatment of wastewater, together with the minimisation of any environmental impact while it does so. If viewed from this perspective, the work of water companies is in line with many other process-orientated industrial sectors. In this regard, it shares many of the key drivers of efficiency and performance pres- sures that other sectors are tackling through the adoption of a standardised approach to the management and maintenance of the systems and assets they are keen to keep operational for as long as feasible. This is the scenario the water sector now faces. Therefore the opportunity is clear. Man- agement at water companies should be investigating the advantages of standardisa- tion linked to the positive outcomes that can be enhanced through the adoption of off-site build strategies. Many large and complex water company assets that will require significant upgrades to preserve their operational lives are located in difficult-to-access environments. Work efficiency to install improvements in these areas can oen be compromised. However, by following the examples of other sectors they can be overcome through off-site build strategies. Within the water sector, Anglian Water is seen as one of the pioneers in this regard. It has been adopting off-site build techniques for some time and has realised some remark- able returns through innovative thinking and implementation. Three examples spring to mind: 1) Wootton booster station. The off-site con- struction of this pumping station reduced installation time from a typical 15 days to one day. Overall time on site was cut by 50 per cent. 2) Bracebridge booster station. Off-site con- struction techniques reduced costs by 23 per cent, saving £700,000, and embodied carbon was slashed by 38 per cent. 3) Uttons Drove treatment works. Through the use of steel tanks, manufactured off- site, construction was reduced from three months to nine days. Also, the project delivered an overall cost saving of £1.7 million and embodied carbon was almost halved. The build off-site approach has many additional advantages, such as speedier commissioning, work programmes and installation. It is safer because health and safety risks are minimised as construction and assembly is undertaken in a controlled environment. It also reduces the carbon foot- print and waste associated with such major projects. In addition, significant pre-testing prior to a move to the final location can be carried out. The build off-site standardised strategy is not new. Many other sectors are already immersed in it because they know it works. Network Rail, Arla Foods, the NHS and Heathrow Airport are among those already using off-site manufacturing processes. At a time when all water companies have to address significant asset management challenges – while hampered by budgetary constraints and under the watchful eye of the industry regulator – making the most of the opportunities afforded by standardisa- tion to future-proof technologies, and using off-site building techniques to support the efficiency of asset management, makes good business sense. It can go a long way to helping the water sector tackle the challenging future it faces in the coming years. Mark Higham, general manager – process automation, Siemens UK & Ireland Get on board with off-site As financial and regulatory pressures mount on the water sector, Mark Higham says there are big opportunities to save money through standardised off-site construction.

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