Issue 77 December 2015
WATER CHARGING
Future price-setting for
wholesale services
The 2014 Water Act expands the scope
of potential competition in the water
sector in England to some ‘upstream’
activities, such as the provision of water
resources and the treatment of sludge.
At the same time, Ofwat has launched
a ‘root and branch’ review of its
regulatory framework ahead of its next
periodic review, PR19.
These changes could mean that the
wholesale price control introduced at
PR14 could be disaggregated into
multiple separate price controls for
different wholesale activities.
Recognising these developments, the
Future Approach to Price-setting in the
Wholesale Value Chain project,
managed by Bruce Horton
Horton, has
considered potential approaches to
upstream pricing and the different ways
in which Regulatory Capital Value
(RCV) could be allocated across the
wholesale parts of the value chain.
At the dissemination event, Programme
Lead, Frank Grimshaw
Grimshaw, opened by
noting that these debates had been
around for many years and that what
was required was consideration of the
potential need for separating wholesale
prices, namely to:
• promote competition in the market
(e.g. identifying access prices for
selling to retailers);
• promote competition for the
market (e.g. more efficient use of
water through trading); and
• improve regulation (e.g. by
providing greater transparency of
costs and prices).
The challenge was to find an approach
that could meet all these needs.
continued on page 4
EUROPEAN WASTE WATER MANAGEMENT CONFERENCE
Key presentations on CIP and P reduction
Around 200 professionals from across the world recently attended the two-day 9th
European Waste Water Management Conference in Manchester town hall.
Two key presentations were given on behalf of UKWIR, covering the £140m Chemical
Investigation Programme (CIP) and a £35m sub-project on phosphorus (P) reduction.
Both of these wastewater treatment projects have arisen from the requirements of
the Water Framework Directive and the need for all EU water bodies to achieve
‘good’ status.
The presentations, delivered by representatives from each project, succeeded in
making the audience aware of the challenges, approach and goals and how this
is being funded and managed nationally through UKWIR.
PrioritisingI 2016/17
programme of
research
Over
UKWIR’s research programme for
2016/17 will be available on the
UKWIR website for expressions of
interest.
This is the conclusion to a process
that began with the spring Advisory
Group Meeting in May followed by
the autumn meeting in September,
both held at Warwick University.
Each of UKWIR’s Programme Leads
presented the benefits of projects
proposed by UKWIR members.
Votes were cast on each of the
project proposals given the UKWIR
Board’s advice which was to be
‘brave, be ambitious, be strategic
and take some risks’.
Following the meeting a research
programme has been devised and is
being made available on the UKWIR
website.
In November Project Managers were
appointed and the essential Project
Steering Groups are now being
established.
Following publication on the
website, projects will go out to
tender in January and February with
most projects starting in April 2016
following tender evaluations.
Hans Jensen, UKWIR Chief Executive
said that ‘this programme represents
a set of high quality focused
projects that have the potential to
deliver considerable benefit to the
industry.’
Each of these national projects has a representative from every water company, as
well as our regulators, together with logistical support and co-ordination from Atkins
consultants appointed by UKWIR.
The respective presentations opened
dedicated sessions at the conference
and were extremely well received,
being key to some of the conference
aims, together with subsequent
presentations and discussions.
Left to Right, Nina Jones (Dwr Cymru), Geoff
Cooper-Smith (United Utilities) and Jennifer
Hughes (Thames Water). Adam Brookes (Anglian
Water) also attended.
It is also anticipated that future
conferences would build on the
presentations made by providing
progress updates on the many trials
associated with these projects.
UKWIR Chief Executive, Hans Jensen with
Wessex Water’s David Elliott, chair of the
September Advisory Group Meeting
2
WATER RESOURCES
Preparing for the 2019 plans
UKWIR has already undertaken a series
of projects to improve methodologies
for the Water Companies’ next Water
Resources Management Plans, due in
2019.
The project Population Property and
Occupancy Forecasting examined how
these factors, which play an important
role in forecasting water demand, can
best be forecast..
The projects, thus, far are shown in the
table, below, and have been carried
out in collaboration with the
Environment Agency. The Agency is
undertaking its own, complementary,
research on the subject.
The main output from the project is a
manual that provides practical
guidance to UKWIR members on how
to forecast these components together
with worked examples.
New methodologies
Two of these projects, with South West
Water’s Paul Merchant as
Programme Lead and Neil Whiter as
Project Manager, were the subject of
recent dissemination workshops that
demonstrated some of the new
methodologies that companies will be
able to use in developing their plans.
The project Demand Forecasting
Methods looked at household
consumption forecasting and reviewed
all the available methods.
The project concentrated on where to
limit the complexity of the forecasting
approach based on the vulnerability
of each water resource zone to supply
demand deficits, the understanding of
uncertainty and increased flexibility in
the methods available to companies.
Table 1. UKWIR 2019 W
ater Resources Management Plans projects
Water
Project
Contractor
Completion
Demand forecasting methods
Artesia
End of 2015
Decision making methods
Atkins/NERA
Early 2016
Risk-based planning methods
Atkins/Met Office
Spring 2016
Population, properties &
occupancy forecasting
Cascade/CACI/
Ricardo-AEA
End of 2015
WASTEWATER
Wastewater
education
Each year the industry spends a great
deal money on unblocking drains and
sewers as well as upgrading their
infrastructure in order to minimise the
pollution consequences of sewer misuse
by the public.
The UKWIR report Customer Education
Strategy for Wastewater is forthright in
concluding that ‘there is a (dire) need
for the public to be better educated on
issues relating to wastewater, and this
needs to extend to responsible waste
disposal and connection of water/
wastewater pipes by trade-people as
well as the lay-public’.
The report is in two parts. The first gives
guidance for the development and
implementation of a customer
education strategy and the second
report contains the research and
evidence base to support this guidance.
The guidance relates to reducing
inappropriate waste disposal via the
sewer, to resolve existing and reduce
future misconnections, to improve
product labelling and to encourage the
uptake of sewer flooding mitigation
measures.
ZEBRA MUSSELS
The risk and control of
Zebra Mussels in the UK
The zebra mussel is
now an established
invasive non-native
species whose range
and abundance has
been increasing since the 1990s.
The closely related quagga mussel has
recently established in England and is of
similar concern.
An UKWIR report, Assessing the risk and
control of Zebra Mussels in the UK, has
recently been published and, after
looking at the issues, sets out a series of
recommendations to deal with the
problem.
Both species are tolerant of a range of
conditions and their temperature
requirements and preference for high
alkalinity waters suggest that they will
spread throughout the UK, apart from
high altitudes and some far northern
and western areas.
The two species cause problems
because the adult stage fixes itself to a
solid surface, and large numbers can
block pipes, filters and other water
supply infrastructure and impede flow of
water.
The larval stage is free-swimming,
enabling the animals to disperse and
find new or cleared surfaces on which
to settle.
Costs are rising
Control and removal of zebra mussels is
expensive, and costs for water
companies have risen as the species
has increased in abundance, from an
estimated £1 million/year in 2005 to
more than £5 million/year in 2014.
While currently concentrated in the
Thames Water and Anglian Water
regions, the problem is expected to
spread.
Modifications to infrastructure to reduce
zebra mussel impacts are expensive,
while the removal of mussels needs to
be repeated at frequent intervals.
Control methods
The report includes an evaluation of the
existing and emerging control methods
for both zebra and quagga mussels.
Several proprietary methods are
available or under development are
considered.
Control methods are assessed in the
context of the specific water industry
requirements for good quality water
and the necessary regulatory and
legislative permissions needed for
implementation of such methods, with
particular attention to drinking water
standards.
The research, with Steve Clay as
Project Manager, Dwr Cymru’s Paul
Henderson as Programme Lead and
carried out by APEM, makes a number
of recommendations including:
• effective monitoring and diligent
biosecurity should be implemented
and maintained to prevent new
infestations
• proactive control needs further
research into the most effective
methods, particularly in the source
water body from which the mussels
are contaminating infrastructure
• several proprietary reactive control
methods show clear benefits and
need further investigation, both in
isolation and in combination with
other control methods
• collaborative working is
recommended among water
companies to share expertise and
experience and with regulatory
agencies to ensure effective
implementation of new regulations
on invasive non-native species.
3
UKWIR PEOPLE
Mandy joins UKWIR
Mandy Fletton will be joining
UKWIR in January and taking over
Gordon Wheale’s role as Senior
Programme Manager.
Mandy was educated at Hull and
Anglia Ruskin Universities, is a
Chartered Chemist, and was, until
recently, Environmental Regulation
Manager for Anglian Water.
She was also the Chair of the
industry’s Wastes and Recycling
Network and a
member of the
Wastewater
Network.
She has been
Programme Lead
for the UKWIR
programme area
of Sludge and
Waste
Management for
the last six years
building up an
impressive and co-ordinated series of
projects.
Mandy will be helping to drive UKWIR’s
strategic programme forward as well as
providing support to UKWIR’s Project
Managers and developing
collaborative relationships with external
organisations.
UKWIR would like to take the
opportunity to thank Gordon Wheale
for his invaluable contribution to the
work of UKWIR over the years and wish
him all the best for the future.
UKWIR projects
Table 2. Main research projects let by UKWIR in the 18 months since April 2014
A radical re-evaluation of the use of stored water reservoirs
A road map for sewerage infrastructure
Achieving Zero Leakage by 2050: four projects
Alternative approaches to bacterial reduction for WwTW discharges - phase 3 (efficacy of disinfectants)
An open multimedia learning and knowledge resource for the water industry
Assessing the impact of a burst driven mains renewal programme on leakage control effort
Assessing the structural condition of PVC pressure mains
Best practice for quantifying load from intermittent discharges
Best practice for sediment management for reservoirs and river impoundments
Biodiversity/ecosystem services - what does it mean for the water industry and for climate change?
Can passive sampling devices provide more useful data than discrete samples
Can total maintenance expenditure (TOTEX) be reduced by optimising maintenance procedures?
Carbon accounting in the water industry: workbook for estimating operational GHG emissions, version 9
Catchment management how do we know it has worked?
Common framework 2014: A framework for expenditure decision making, part 2. work package 2
Common framework 2014: A framework for expenditure decision making, part 2. work packages 5 & 6
Customer taps and their influence on water quality
Demand side energy management
Integration of behavioural change into demand forecasting and water efficiency practices
Development & deployment of a multivariate decision support tool for the CIP catchment studies programme
Effects of methodology in determining phosphorus in effluents
Enhanced storm flow treatment
Establishing a robust case for effluent re-use - phase 2
Factors affecting background leakage - revisit
Fast logging for improved estimation of household night use
Fate of soluble reactive phosphorus after discharge
Finding alternatives and using less shortage risk chemicals in water treatment
Framework for expenditure decision making part 2 – service forecasting tool (web deployment)
Future estimation of unmeasured household consumption
GAC quality and operational management
Ground infiltration modelling - better scientific understanding
Identification of treatment conditions which minimise DBP formation
Intelligent assets - condition and performance monitoring techniques
Invasive and non-native species (INNS)
Lead compliance techniques and costs
Leading asset performance indicators linking to ODIs and performance commitments
Managing water chemistry to control pipe corrosion rates
Pesticide risk mapping and catchment intervention
Measuring the performance of leak detection technicians
Modelling solid transport and deposition in urban sewerage systems
Municipal Sewage: One man’s trash another man’s treasure!
Not all particles are the same - a review of the hazard posed to disinfection process by various turbidity types
Overcoming the reliance on short term flow surveys to develop and verify sewer network models
Pesticide risk mapping - phase 2
Planning for the mean or planning for the extreme?
Post PR14 customer engagement, communication and education
Real-time integrated modelling, monitoring and control
Reassessing the risk and control of zebra mussels in the UK water industry
Remote sensing for catchment management Phase 2
The future role of customer and stakeholder engagement in the water industry
Sampling and analysis of radon in water
Scoping the development of a multivariate decision support tool for the CIP2 catchment studies programme
Setting performance commitments and incentives to deliver best value for money
Standards for double triangular manhole covers
SuDS symbology and data model
Supply pipe ownership - the customer view
Total investment planning - a common framework (part 2 : web deployment)
Trade effluent risk assessment, sampling and monitoring: best practice guidance
Understanding how best to align the funding processes, policy and regulations associated with various
bodies who have a role in resolving flooding
Water company benchmarking
Water resources management plan 2019 methods
Water resources management plan 2019 methods phase 2 - population, property & occupancy forecasting
Welfare reform and its impact on the collection of water charges
Wholesale and household retail charging principles
Main contractors
Cascade Consulting
MWH UK
Univ. of Surrey, Southampton, WRc
MWH UK
WRc
RPS Environmental
Exova (UK)
WRc
Cascade Consulting
Cascade Consulting
WRc
Atkins
WRc
Atkins
Halcrow Group
Mott McDonald
NSF-WRc
MWH
Artesia Consulting
Atkins Consultants
Atkins Consultants
Cascade Consulting
AMEC & Infrastructure UK
RPS Water Services
Artesia Consulting
Atkins Consultants
WRc
Webree.com
Artesia Consulting
Isle Utilities
MWH UK
Cranfield University
Tynemarch
Cascade Consulting
Isle Utilities
Tynemarch
Sheffield University
ADAS UK
P N Daly
Heriot-Watt University
AMEC & Infrastructure UK
Cranfield University
Mouchel
ADAS UK
Halcrow Group
Blue Marble Research
Mouchel
APEM
APEM
First Economics
LGC (Teddington)
Atkins Consultants
Frontier Economics
WRc
HR Wallingford
DJS Research
Webree.com
Ricardo-AEA
Halcrow Group
Mott McDonald
Atkins/Artesia
Cascade Consulting
Citizens advice bureau
ICS Consulting
4
WATER CHARGING
This edition features a listing of UKWIR publications issued since the last newsletter.
Future pricesetting
CLIMATE
CLIMA
TE CHANGE
15/CL/01/23 Planning for, and Responding to, the Mean and Extremes of £400
Weather (1 84057 779 7)
15/CL/11/7 Demand Side Energy Management
£300
(1 84057 782 7)
(continued from page 1)
CUSTOMERS
In response, Anthony Legg
Legg, from the
contractor, FTI Consulting, noted that
one of the biggest challenges was the
size of the RCV discount at privatisation,
meaning appropriate price signals in
contestable parts of the value chain
cannot easily be identified.
15/CU/03/2
He also argued for the need to
understand where changes to the
wholesale price setting regime could
add the most benefit.
FTI’s analysis suggested that the overall
value of contestable areas was likely to
be small, with non-households
accounting for around thirty per cent of
total revenues, and contestable areas
as currently envisaged likely to form a
fairly small element of this.
Regulation,
competition or both?
The contractor’s approach to the
project centred on identifying the
objectives of reform, as illustrated in
figure 1.
Depending on whether this was primarily
to improve regulation or promote
competition, different options could be
envisaged.
Elements of these options could then be
‘packaged up’ and evaluated against
a range of criteria. These include the
impact on customer bills, efficiency,
impacts on financing, environmental
performance and flexibility to future
changes.
It could also well be different for clean
water and wastewater, and for
individual companies, given their
different circumstances, histories and
prospects.
Anthony summed up the mood well by
noting that “we all recognise we are on
a journey”, and the project is just one
important step on that journey.
£50
(1 84057 776 2)
The Future Role of Customer and Stakeholder Engagement £30
in the Water Industry (1 84057 993 2)
DRINKING W
ATER QUALITY & HEAL
TH
WA
HEALTH
15/DW/14/10 Finding Alternatives and Less Shortage Risk Chemicals in
£300
Water Treatment (1 84057 781 9)
15/DW/14/11 Pesticide Risk Mapping and Catchment Interventions, Phase1 £600
15/CU/03/3
(1 84057 788 6)
15/DW/14/12 Remote Sensing for Catchment Management, Phase 2
(1 84057 791 6)
£300
PROGRAMME MANAGEMENT
15/PM/03/2 The Use of Open Innovation to Address a Technical
Challenge – Sewer Blockage (1 84057 778 9)
£300
15/PM/03/3
Can Total Maintenance Expenditure (TOTEX) be Reduced
by Optimising Maintenance Procedures? (1 84057 783 5)
£30
15/PM/03/4
Reassessing the Risk and Control of Zebra Mussels in the UK
Water Industry (1 84057 784 3)
£30
REGULA
TION
REGULATION
15/RG/05/42 Leading Indicators Linking to Performance Commitments
(1 84057 774 6)
£340
15/RG/05/43 Framework for Expenditure Decision Making: Development
of Service Forecasting Approaches (1 84057 777 0)
£340
15/RG/05/44 Framework for Expenditure Decision Making:
Self-assessment Methodology (1 84057 790 8)
£300
15/RG/08/10 Water Framework Directive (WFD); Disproportionate Costs
(1 84057 792 4)
ASTE MANAGEMENT
SL UDGE & W
WASTE
15/SL/01/12 Biosolids: Soil Quality and Fertility Benefits (1 84057 780 0)
£30
£200
SEWERAGE
15/SW/01/12 Real-time Integrated Modelling, Monitoring and Control
£100
(1 84057 773 8)
15/SW/01/13 Fats, Oils and Greases (FOG) - Where we are and where
£60
we could be (1 84057 787 8)
15/SW/01/14 Fats, Oils and Greases (FOG) - Where we are and where we £60
could be - The Feasibility of Biological Dosing into Sewer
Systems and the Development/Specification of a Protocol
Are we there yet?
FTI Consulting has developed and
evaluated a range of illustrative
packages. However, the ‘answer’ (as
any good economist will tell you)
depends on such things as the state of
the world, on assumptions made, and
on the policy objective.
Customer Education Strategy for Wastewater
(1 84057 789 4)
15/SW/02/2
Standard Tests for Double Triangular Manhole Covers
£150
(1 84057 785 1)
WATER MAINS, SER
VICES & LEAKAGE
SERVICES
15/WM/04/11 Assessing the Structural Condition of PVC Pressure Mains
(1 84057 786 X)
£350
.or
g
UKWIR research reports are available for non-members to purchase via www.ukwir
www.ukwir.or
.org
Figure 1. Objectives of reform
Objectives of reform?
Regulation
Selection criteria
Regulation: Drive efficiency
Competition: Facilitate market forces
Competition
Allocate RCV (focused,
Options to achieve
Options to achieve
unfocused, hybrid)
regulatory objectives competition objectives
Don’t allocate RCV
Statements contained in the UKWIR Newsletter do not
necessarily represent the views of UKWIR or the Water Industry
Packages of options
Evaluate packages of
options against criteria.
Publish more information
Competitive tenders/auctions
Calculate a market price
Can Regulation and Competition
options be combined consistently?
Do they have to be?
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