Water industry: turning the tide

They are the stewards of a huge, invisible network of underground pipelines, supplying water and removing waste in homes across the country.

But most of us only think about water utilities when problems arise; our water supply is restricted, or effluent flows into a local nature reserve.

With most water infrastructure built during the Victorian era and then languishing throughout years of public ownership, experts say there remain thousands of miles of ageing pipelines.

Each of these needs continuous monitoring for leaks, and must be maintained or replaced in line with ever tightening environmental regulations.

In its Global Risks Report 2016, the World Economic Forum cites water as the number one crisis likely to impact the planet over the next 10 years

Years of heavy investment by the private sector are beginning to pay off, with some of these problems inherited from the past slowly being conquered.

But the sector is not out of the water yet.

In its Global Risks Report 2016, the World Economic Forum cites water as the number one crisis likely to impact the planet over the next 10 years.

A resulting “nexus of regulations for water, energy efficiency and climate change” will force utilities across Europe to rethink their strategies, says industry researcher Frost & Sullivan.

It predicts that these challenges may even provide the impetus for a brand new era of efficiency and modernisation.

To realise this transformation, hopes are being hung on a relatively new investment tool called ‘totex’.

In for the long run

By combining capital expenditure (capex) and operational expenditure (opex), industry watchers hope the adoption of totex models will incentivise utilities to focus more on cost-efficient life-long operation of their assets than short-term fixes.

It might also serve to smooth out the ‘boom and bust’ spending peculiar to the UK water industry’s five-year Asset Management Planning (AMP) cycles, say experts.

Transformation means treating water processes like that of a large factory enterprise, says Jeremy Shinton, business solutions manager at Mitsubishi Electric.

“There are many differences between a water treatment plant and a food or automotive manufacturing business but there is the same driver and that is to eliminate waste and reduce not just processing costs but overall business costs.”

He says lean principles can be applied to processes such as sludge treatment and optimisation of energy production.

“The water companies are extremely tightly regulated and must provide the government with statistics on how well they are operating, from extraction of raw water to final delivery to the tap, and on collection of wastewater through treatment and back to the rivers and reservoirs,” he says.

According to Frost & Sullivan, using totex will enable water utilities to justify investments in smart water systems that would have been considered relatively expensive in terms of capex

To do this more effectively will require them to undertake activities such as predictive maintenance that will extend the life of their plants and apply a totex methodology.

According to Frost & Sullivan, using totex will also enable water utilities to justify investments in smart water systems that would have been considered relatively expensive in terms of capex.

“[These] appear to present tangible economic benefits and sometimes with attractive payback periods,” says Frost & Sullivan vice president Fredrick Royan.

To increase both the efficiency and longevity of assets, UK water regulator Ofwat has asked the industry to embrace innovative technologies such as the remote control of processing plants.

This investment is expected to occur as part of the regulator’s sixth Asset Management Planning period (AMP6) running from 2015 to 2020.

Get smart

One technological development smoothing the way for remote monitoring is the introduction of ‘smart’ devices, allowing instruments in the field to communicate natively with a ‘master station’.

A new global Water Industry Telemetry Standard has now been developed to enable certified equipment vendors to embed this so-called smart technology into a wide range of water-industry field devices and instruments.

Water treatment is an area where smart technologies can have a large impact says Paul O’Callaghan, chief executive and founder of BlueTech Research.

BlueTech works with industrial companies and utilities to help them make use of the ‘actionable data’ available in their operations.

O’Callaghan says that over the next 15 years there is nothing to stop the operation of water treatment plants to become completely automated and managed remotely.

The company is also involved in projects that use data to visualise the flow of water within the network, to monitor levels of leakage, says O’Callaghan.

“If we are looking at chemicals used for dosing…companies are developing integrated sensors and control systems that enable them to reduce their use,” he says.

“Every lost litre that you have dosed [with chemicals] represents money lost.”

Plugging the leaks

One of the key challenges for the water industry is that its key assets are largely underground and inaccessible, says Dragan Savic, a professor of hydroinformatics and co-director of the University of Exeter’s Centre for Water Systems.

“I think we have about 750,000km of water and sewer pipes in this country, which is several multiples of the length of roads,” he says.

The replacement value of this was estimated in 2010 at about £220bn, he says, and since privatisation, water companies have invested about £90bn.

The key driver for rehabilitation was leakage, which at one stage saw 20% of water in the networks being lost.

“Before the systems were instrumented you wouldn’t see a leak unless there was water on the ground,” Savic says.

“The introduction of sensors and smart systems to detect leaks by examining data, have almost halved this.”

Industry regulations are also exerting strong pressure on water companies, such as the call for clean drinking water, and prohibiting wastewater from being released out to sea, says Savic.

“Water is no different from any other manufactured product. It has to be taken from somewhere, pumped, cleaned, and delivered to customers,” he adds.

Some parts of the UK are already struggling to match supply with demand during the summer months and with climate change predicted to become a key issue within the next 20-30 years, he says a deeper level of data integration will become increasingly important.

Some parts of the UK are already struggling to match supply with demand during the summer months

An example, says Savic, is comparing local data with that from various sources such as government data on climate, weather and traffic.

However, the pace of technological change to provide solutions enabling these types of comparisons is, in some cases, being held back by water companies’ own internal divisions, he says.

“Because [water utilities] are providing a service seen to be important for the wellbeing and health of the nation it makes them reluctant to trial any untested technology,” he says.

“There will need to be a big change in mindset if they are to adopt disruptive technologies. But this may not be achievable without changes in the regulatory regime.”

Groundhog day

Keith Hayward, sales and marketing manager for Hydro International’s European Wastewater division, says when it comes to investment in maintaining water industry assets, he is yet to observe any real shift towards totex investment priorities.

“The [totex] challenge is to deliver innovation that embeds improved operating efficiency and reduces the maintenance burden, while increasing the life of critical equipment,” he says.

“Unfortunately, the water industry is encountering ‘groundhog day’ inertia that adheres to firmly-embedded ‘lowest price up front’ rather than ‘best value’ costing and contracting models.

“We’re a year into AMP6 and from our perspective there’s still sparse evidence of a change to a totex approach.”

Hayward adds that the sense of frustration from the supply chain is “palpable” and says barriers to progress include cultural inertia, especially in middle management, and “a reluctance to change to more dynamic procurement and contracting frameworks”.

Tony Conway, visiting professor at the University of Sheffield Water Centre, says a key focus for water utilities is "carrying out the detective work to find the right innovation which matches the individual utility's challenges and opportunities and aligns with the company’s strategy”.

Conway has recently been appointed as a director at British Water, a trade body which aims to work in partnership across the water sector.

“Increasing customer expectations, rising energy costs, the changing regulatory regime and the impacts of climate change are all jostling for attention and demand a joined-up approach when it comes to making totex-related decisions,” he says.

Changing landscape

“In my 30 years’ experience, I don’t think I have ever seen such a period of dramatic change in the landscape in which we operate.”

The result of this is that while water companies have always been in front of the changing landscape, there is a risk they could find themselves behind the curve, warns Conway.

“We need to stay in front and that demands innovation,” he says.

A traditional approach of the water sector in the past has been to build its way out of the challenges, “but there isn’t the money, customer appetite for ever greater capital programmes”, he adds.

“A key challenge now is how to obtain more performance out of the existing asset base without building more and more.”

This means leveraging the innovation being developed both within the supply chain and universities.

“A key focus for the water companies is to work closely with the supply chain, enabling the creativity of the supply chain to develop solutions in partnership,” he says.

“I think that water companies will increasingly see themselves as detectives, searching the landscape for innovation, rather than seeking to invent for themselves.”

Many people think of wastewater as a big problem area, but actually it is a huge area of opportunity

Engaging with the supply chain is a key focus for the Sheffield University Water Centre.

“With the traditional approach it can take so long from an initial idea to creating impact. Our approach is to work in a way which dramatically shortens the time scale,” says Conway.

“One of the mechanisms we are employing is the development of thought leadership clubs,” which he says means bringing people together from across the entire water landscape.

Conway is also chairman of the TWENTY65 Research Consortium, comprising six universities with a combined focus on tailored water solutions.

One key area of interest is wastewater. “Many people think of wastewater as a big problem area, but actually it is a huge area of opportunity,” he says.

“We will start to see the city as a water resource, with integrated urban water management and reuse, extending from the household to the street to the catchment scale and incorporating dual function rainwater harvesting and sustainable drainage systems.”

The consortium is also examining the relationship between water and energy, and finding ways to optimise energy use, recover energy and generate energy.

“We are also looking at buried infrastructure and developing robotic autonomous systems to replace human intervention in the monitoring and rehabilitation of networks,” says Conway.

“By working together we can address the challenges we face and take advantage of the opportunities.”