Utility Week

UTILITY Week 10th June 2016

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/689907

Contents of this Issue

Navigation

Page 21 of 31

Insight for leadership All for less than £29 per week. Take advantage, join Utility Week Premium Membership to stay on top of Britain's utilities. © Utility Week Intelligence | Windsor Court, Wood Street, East Grinstead, West Sussex, RH19 1UZ | +44 (0)1342 332000 | www.utilityweekintelligence.co.uk S ince national utility Irish Water (IW) was formed on 1 January 2014 it has, with 31 local authorities in Ireland, begun a programme of work that could transform Ireland's water services into a system fit to support a growing modern economy. But it has a problem: the attempt to introduce the customer charges necessary to support this transformation was botched. Although water professionals are bea ver ing away to establish the basis for a sustainable, secure, and costefficient water supply, the people of Ireland have not bought into the project. Many people never registered with IW's new billing system, and those who did have in some cases paid inconsistently or only partially. In October 2014, more than 50,000 people marched in Dublin against water charges – it was one of the largest political protests in the country for many years. By the final quarter of 2015, the third quarterly period for which IW issued a bill, only 61 per cent of 1.52 million water customers paid up, raising revenue of €42.3 million (see box). Details of payments in the first quarter of 2016 are yet to be released, and rumour has it the delay in publication may reflect a fall in the number who have paid. If true, it is undoubtedly a result of political uncertainty over the organisation's future. The call to abolish water charges was adopted by politicians campaigning Water in Ireland: The outlook for investment in mapping and modernising Ireland's water services MAY 2016 for votes in the country's general election of February 2016, and the issue is now being kicked around in postelection negotiations between the two main parties. The biggest party, Fine Gael, wants to keep IW and water charges, but the second largest, Fianna Fáil, would prefer to abolish the organisation, a manifesto position on which many of its 44 Teachtaí Dála (TDs) were elected. A tentative agreement has been reached to turn IW from a semistate body into a full state agency, and to suspend water charges until a new consumptionbased system of charging is introduced. It's estimated that once concessions for the elderly and welfare recipients are factored in, only 60 per cent of households will pay water charges. Tom Collins, chair of the Public Water Forum, a customer panel set up in 2015 with a view to improving the quality of public engagement on charging, believes a significant shi™ in attitudes is needed before a stable payment system can be established. "People think they've already paid in their taxes, they don't relate to IW as customers, and there is concern over the threat of privatisation of water services. I have been surprised by the depth and intensity of feeling out there. It has been a very poorly structured dialogue." So what model might emerge to take forward the work of upgrading Ireland's water services? WATER CHARGES COLLECTED BY IRISH WATER Quarter sum collected % of customers paying Q4 2015 €42.3m 61% Q3 2015 €38m 55% Q2 2015 €30.5m 44% WATER IN IRELAND — THE BIG NUMBERS 625 Irish Water staff 3 , 900 Local authority water workers 1.52m Water customers 2 © Utility Week Intelligence | Windsor Court, Wood Street, East Grinstead, West Sussex, RH19 1UZ | +44 (0)1342 332000 | www.utilityweekintelligence.co.uk : Water in Ireland There is little appetite for privatisation. As one local authority engineer put it: "We don't want a McDilley, sunning himself on a beach in Barbados," referring to Philip Dilley the former chair of the UK Environment Agency, who quit in January 2016 amid bitter recriminations a†er he failed to return from holiday in Barbados while storms wrecked the north of England. There appears to be muted political will to introduce a universal payment system. So the question remains, where is the money going to come from? A creaking system It has to come from somewhere, because Ireland's water system is creaking a†er decades of underinvestment. "Ireland's water services are severely stressed, and don't meet the needs of a modern economy, " says Gerry Galvin, IW chief technical adviser. "We've had fragmented service delivery with diseconomies of scale up until the establishment of IW, and we've an ageing and poor-quality infrastructure." A total of 3,000 people remain on so-called "boil water notices", meaning they must boil water before drinking it or using it to prepare food (down from 23,000 when IW came into existence); and 47 per cent of all drinking water in Ireland never makes it to the taps because of leakage (down from 49 per cent). More than 60 per cent of wastewater treatment plants either need higher capacities or must meet higher quality standards, including 44 that are discharging raw sewage into the waterways. Critically, Dublin had less than 2 per cent spare capacity when IW was established (now 10 per cent). IW has a European Court of Justice case pending relating to 83 wastewater plant infringements, including the 44 noted above. It is being prosecuted by Ireland's Environmental Protection Agency (EPA) for failing to comply with an order to upgrade a drinking water plant. On budget and customer service measures, the company is regulated by the independent Irish Commission for Energy Regulation (CER). EPA regulates on water quality and environmental standards. IW estimates that it needs €13 billion to upgrade the country's water infrastructure to deliver acceptable customer service, to meet European Union (EU) standards, and to restructure its delivery model, reducing costs. The current Irish Water business plan, which covers the period up to 2021, outlines a budget of €5.5 billion to cover specific targets designed to improve services, and to restructure the delivery model to achieve €1.1 billion of efficiencies. In the past two years, IW has engaged with the 31 local authorities to establish eight regions, and to delineate at what level different decisions should be made, and work programmes implemented. It has introduced a national operating plan for water services, based on service level agreements with each authority, including monthly reporting using a set of key performance indicators. IW has developed a three-tier system to help structure its work and that of the local authorities. Tier one comprises the overarching 25 Years Water Services Strategic Plan, published in 2015, which sets out the long view, and takes account of other national programmes including the National Forward Planning Framework, National Spatial Strategy, and River Basin Management Plan. Tier two covers more detailed implementation plans such as the National Water Resources Plan; the National Waste Water Compliance Strategy; the National Waste Water Sludge Management Plan (currently out for consultation); and the Climate Change Adaptation and Mitigation Strategy, and a strategy on lead levels – both of which are due to go out for consultation during 2016. More specific projects, such as the programme to reduce leakage, and capital maintenance jobs, are managed in tier three. One national project, the domestic metering programme, began installing water meters in households in August 2013. Though this has been widely criticised as a waste of money, because metered billing has not yet materialised, it has contributed to a growing body of data collected by IW, and has supported the targeted use of funds in the First Fix Free leakage reduction scheme, which has so far cut customer-side leaks by 32 million litres a day. As well as the work necessary to upgrade and maintain the water network, IW points out that new housing developments will drive extra demand for water, and that the three big areas of economic growth expected in Ireland in the years ahead – information technology, agri-food, and biopharma – are all heavy users of water and generators of large quantities of wastewater. "Whatever government decides, these are still the things that will have to be addressed, and the approaches that will have to be adopted," says Galvin. Evidence-based decisions The industry is sick of politics. A significant piece of IW's work is to further an evidence- based approach to making decisions, under which projects are prioritised based on the risk of doing nothing, and making the best use of resources. There is deep collective frustration among Ireland's water professionals about returning to a system that flip-flops according to politicians' whims, and in which resources are channelled to whoever shouts the loudest. In the 1990s, water charges were introduced and then quickly quashed again as a result of political pressure, and the debacle may yet continue. However, the story of refuse collection charges in Ireland can be seen as a parallel. A privatised system of paid-for refuse collection was introduced in 2003 in spite of bitter protests from political activists who encouraged non-payment, but by 2016 the sting has largely gone out of the issue, and Ireland can boast that it ranks alongside Belgium as joint-third best recycler in Europe, behind Slovenia and Germany. So although there is currently limited room for political manoeuvre on water charges, much can and may change in a relatively short time. IRELAND'S WATER CHALLENGE, AS AT 1 JANUARY 2014 (IMPROVEMENT AS OF APRIL 2016) l 49 per cent of drinking water never makes it to the taps (47 per cent) l 33 per cent of water lost through customer-side leakage l 75 per cent of sewer network needs fixing l Dublin had less than 2 per cent spare capacity (10 per cent) l 23,000 people on boil water notices (3,000) l 121 water treatment plants at risk of quality failure l 472 drinking water plants fail World Health Organisation water safety risk tests l European Court of Justice case pending for 83 agglomerations (an area with a population or business activity such that urban wastewater is collected) IRISH WATER PLANNED RESTRUCTURE AND STAFF CUTS n Payroll €370 million, 33 per cent n Contracting €170 million, 15 per cent n Consumables €150 million, 14 per cent n Overheads €160 million, 14 per cent n Cost of repairs and maintenance €260 million, 24 per cent There is deep collective frustration among Ireland's water professionals about returning to a system that flip-flops according to politicians' whims, and in which resources are channelled to whoever shouts the loudest." 3 Whatever happens with the politics, the industry faces a huge challenge to upgrade the country's water infrastructure. That estimated €13 billion bill covers a multitude of challenges that IW has been mapping over the past two years. "We started from a point where we didn't know where the treatment plants were, and didn't know where the networks were. In the space of two years we've mapped more than 60,000 kilometres of water main. We found treatment plants as we went around gathering asset information," says Mark Macaulay, IW water supply strategy lead, whose job it is to define the investment needs, and to create the business case for investment that goes to CER for approval. As well as the water mains, IW has collected data on 800 treatment plants, more than 2,000 pump stations, 1,700 reservoirs, and 4,500 district metered areas (see box). That's a lot of equipment to maintain for a population of 4.6 million. Even CER's director of water, Sheenagh Rooney, says: "By any measure, when you look at the Irish water system compared with water systems nearby, we have a very large water network and a lot of water treatment works and wastewater treatment works, and a lot of mains that need to be maintained." Macauley adds: "It's the first time we've looked at all the treatment plans, all the needs, and started to prioritise nationally, and to understand the landscape and the problem we're trying to solve." The team found that more than 600 treatment plants have one or more deficiencies, including insufficient yield (extracting more water from the waterhole than the water body can support), insufficient production capacity, inadequate treatment for cryptosporidium (the recent prosecution by EPA reflects lack of cryptosporidium barriers), water treatment plants with limited or no organic removal (therefore trihalomethane problems), and insufficient storage. "We're looking not at what's already failed, or is failing – that's the compliance data – but what might fail next, for example in a big storm, and we already have solutions for some of these," says Macaulay. "We now have a good understanding of where the risks lie. And what's clear is that it's not about providing extra capacity, it's not about providing microbiological barriers, it's not about removing organics, and it's not about reducing leakage. It's about doing all of those things in the right balance to achieve the right outcome." He adds: "It has painted an interesting picture of Ireland, and a very significant challenge." All this information is pulled together to support CER submissions on investment. Risks are categorised and combined with customer research data, and cost estimates, to produce a portfolio of projects to be delivered. The aim is to take a countrywide view of risk reduction compared with capital spend, with a view to targeting spending smartly. "We have looked at the risks, and in the current investment plan we are proposing to remove 133 water treatment plants that are high risk, and to connect them to lower risk or newly upgraded central treatment plants. Of those 133, 119 have significant cryptosporidium risks that would be very expensive to address individually, and 28 are on the EPA remedial action list," says Macaulay. Drainage network upgrade On the wastewater side, there is currently about 50 per cent visibility of the network (see box, next page). Michael Tinsley, IW's wastewater capital programme lead, says: "The lack of knowledge we have about our © Utility Week Intelligence | Windsor Court, Wood Street, East Grinstead, West Sussex, RH19 1UZ | +44 (0)1342 332000 | www.utilityweekintelligence.co.uk : Water in Ireland IRISH WATER WASTE WATER NETWORK GEOGRAPHIC INFORMATION SYSTEM (GIS) ESTIMATED COVERAGE AND SURVEY STATUS n Manhole surveyed 30 per cent – good quality data, digitised, geo-located n Digitised (no survey ) 20 per cent – data, but not based on survey n Digitised (no data) 10 per cent – lines on a map, possibly no flow direction n No representation 40 per cent – we know it's there, but have no information THE IRISH WATER NETWORK AT A GLANCE l More than 800 treatment plants (of which 500 are small boreholes producing less than 100 cubic meters a day) l 63,000 kilometres of water main l More than 2,000 pump stations l 1,700 reservoirs l 4,500 district metered areas l Produce 1.7 billion litres of water a day Join today at www.utilityweek.co.uk/membership Insight Report: Ireland Water (published May 2016) Company profile: Thames Water (published May 2016) Electricity Market Reform eBook (published May 2016) Trusted Global News Stories Utility Week Premium Intelligence Reports Utility Week Daily News Content Don't miss

Articles in this issue

Links on this page

Archives of this issue

view archives of Utility Week - UTILITY Week 10th June 2016