Water & Wastewater Treatment Magazine
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22 | MAY 2017 | WWT | www.wwtonline.co.uk Project focus: Asset management but Yorkshire Water is so far unique in formalising such a process in a decision-making framework. The company plans to use the valuation tool to demonstrate that the projects and interventions it pursues in the 2020-2025 AMP period have enhanced its capitals and made it a stronger, more resilient business, chiming in with the emphasis that Ofwat has placed on building long-term resilience. It will also inform its 25-year water resource management plan. "This for us signals a fundamental shi‚ in the way we view our assets and run our assets going forward," concludes Barber. "Every company would recognise they need to do business sustainably and this will allow us a system by which to practice what we preach. We will be placing a great deal of reliance on these elements of valuation and optimisation to drive our long-term investment. "Water companies will be around for many, many years to come, and the decisions and the way we look at our business now needs to ensure resilience for customers over that long- term horizon." Hear more on natural capital at WWT's Asset Management conference on 10th May: events.wwtonline.co.uk/asset In cost benefit analysis, it is always a sticking point to determine how many people are benefiting from something, and how many are negatively affected, so that's one of the points of discussion. "This is a step change in understanding benefit," continues Rees. "The industry has always been good at representing the risks of non- investment, but now we are far better able to capture the opportunities of investment. It's not just about orthodox traditional engineering Work underway at Rivelin Water Treatment Works near Sheffield, which was the subject of the pilot natural capital assessment ● The valuation method used for ecosystem services has been extended to cover societal benefits (social capital) ● The utility can demonstrate the quantifiable net benefits of a project or intervention to the environment and society at the optioneering phase ● Optimisation so ware can then be used to determine which is the best option, in the context of Yorkshire Water's priorities • Innovations solutions, this enables some far more wide-ranging interventions: making use of your natural capital on things like SuDS, making use of social capital on things like customer volunteering or customer behavioural interventions, such as educational campaigns on blockages and wastewater." Barber admits that the valuations and methodology are currently more robust for natural capital than they are for the social and human elements, which is why Yorkshire Water will be pursuing a mixed approach for the price review. "Social capital isn't yet as well defined, so while the decision-making framework that we are using will consider the environmental impact alongside the financial, some of what we will look at on social impact will be more qualitative than quantitative," she says. "So there will be a top-down element to some of that where we look at business-wide approaches with social impact. "But the decision-making framework is bottom-up: it's more quantitative, and more objective, more scientific if you like, and we will use it to build up the programme." Several other water companies have worked on ecosystems services valuations, including Anglian Water, Welsh Water and Affinity Water,