Here, we talk to John Davies, Chief Information Officer at Market Operator Services Limited (MOSL) about the company’s role within the retail water market. He also discusses the challenges facing non-household (NHH) water customers, what’s being done to help overcome them as well what’s likely to happen in the future.
Firstly, can you tell us a bit about MOSL and its purpose?
MOSL is the market operator for the non-household (NHH) water retail market, enabling more than 1.2 million business, charity and public sector organisations to choose their water and wastewater services supplier. We are responsible for allowing new companies to enter the market and we ensure that all companies are held accountable for their performance.
In addition, MOSL manages the Central Market Operating System (CMOS), which processes all the electronic transactions involved in switching customers and providing water usage and settlement data. Working with retailers, wholesalers, customers and stakeholders, we identify and implement new ways to improve the market, as detailed in our 2021-24 Business Plan.
Can you tell us a bit about yourself and your career history prior to becoming CIO at MOSL?
I started my IT career on a graduate scheme as a developer, before moving into a range of System and Business Analyst roles and then Development Management. Following this, I worked in several industries, from travel and software services to motoring and insurance, but always with a consistent focus on the delivery of IT and data transformation.
Through holding a range of project, programme and delivery management positions, I became Technology Director with the AA for four years before joining MOSL and while this has been my first exposure to the utilities sector, the IT and data challenges are very familiar.
If the aim is to be more water efficient, what do you think are the challenges facing NHH customers?
There are several challenges and resolving them is not easy. First of all, the water industry is not incentivised to reduce NHH demand; instead it is focused on reducing domestic per capita consumption (PCC). Unlike the domestic market, there are no specific targets outlined for NHH customers. Of course NHH customers are incredibly diverse, which may well be why this hasn’t happened to date. From small corner shops to large breweries and multi-sites, NHH customers also have an incredibly complex and varied relationship with how they use water.
There is also a lack of consistency; water companies categorise NHH industry types in different ways, which means learning on specific customer groups has been limited. There are also varying levels of engagement combined with a lack of knowledge. For example, Water Resource 2019 forecasts for NHH customers predict no change to current demand in the next 25 years. We believe that this is highly unlikely given the factor of decarbonisation, which will have a significant but varying impact on different NHH sectors.
What effect does the NHH market have on the UK’s water resources and scarcity issues?
The NHH market accounts for 30% of England’s water consumption. Therefore, if water companies are not taking into account NHH consumption, they are ignoring almost a third of their water supply, which would mean supply and demand forecasting just isn’t accurate.
The good news is that as the market operator, we have access to central market data that helps us to understand how business customers use water. With this insight, we can help water companies plan for the future and tailor their messaging to customers around water saving. From our data, we already know that 36% of NHH meter points and 37% of NHH consumption is located in Water Resource Zones (WRZs) classified as having high water stress.
Furthermore, 42% is located in Environmental Agency (EA) water bodies with low water resource availability and 18% of NHH meter points are located in communities at risk from surface water flooding. By having access to this information, MOSL and the NHH market can make a valuable contribution to water resource planning and demand reduction.
Finally, our analysis suggests that approximately 1% of NHH customers consume over 50% of the NHH water in England. What would we be able to save if we began to understand and influence the water usage of just this 1%?
What is the water industry doing currently to reduce NHH demand?
As defined in the Retailer Wholesaler Group (RWG) Water Efficiency Action Plan, the industry is focused on working together to deliver in five key areas that will help to reduce NHH demand. MOSL is working with the RWG water efficiency sub-groups to increase the uptake of water service offerings, as well as to:
- Provide greater clarity on expectations and ambition for NHH water efficiency
- Improve understanding of where, when and how much NHH water is being used and how best to target water-saving interventions
- Improve collaboration in water resource planning and in identifying and progressing options to meet future business and societal water needs
- Identify and address wider regulatory and other relevant barriers to the delivery of business water efficiency
- Deliver insights into business customer motivations to saving water, using them to inform water-saving campaigns and initiatives.
A number of our key business plan commitments directly support the market’s drive for improved water efficiency. The goal of the Strategic Metering Review is to create accurate and timely consumption data. Our Bilateral Transactions Programme is about improving the interactions between water retailers and wholesalers and give us greater visibility of the customer journey.
Can you tell us more about the Data Insight improvement programme and it benefits?
Data is increasingly fundamental to the success and growth of the NHH water market. It is widely acknowledged that a ‘one size fits all’ approach does not deliver the best outcomes for trading parties, customers or the environment. Developing a targeted approach requires better data quality and availability.
The Data Insight improvement programme looks to address the cause of poor-quality data and to develop the tools to access, analyse, cleanse, enrich and share this data. This programme will enhance data analytics capabilities and overlay market data with publicly available datasets to provide greater insight and support in areas such as water efficiency and leakage reduction.
In addition, data quality issues continue to cause significant operational challenges that impact both trading party performance and customer outcomes. These issues also affect the accuracy of customer bills and restrict their ability to make informed decisions on the switching of their service and water efficiency offerings.
How can a data-driven approach benefit both individual businesses and the wider water sector?
The market has given us a consistent national data model for the first time. However, this collated view has also brought attention to data issues across the industry. We now have the opportunity to work together, to share our local learning and to improve our national data. We can do this through regional comparisons that drive up standards; sharing and learning from more granular local data; and working together efficiently on data segmentation, enrichment and visualisation.
By using the enriched data sets we are creating, we can enhance our view of consumption, associated carbon emissions, customer industry types and geographic context. This data can help the industry understand consumption patterns and identify inefficient water usage.
Over the next few years, what changes do you hope to see with regards to the NHH market as a result of greater water resource planning?
In March 2020, Ofwat issued a joint letter with the EA calling for greater water efficiency in the business sector. This was a positive step, however more needs to be done to ensure an appropriate focus is given to the NHH market for its contribution to water reduction and wider sector goals, including the associated impact of water on carbon emissions.
In the coming years, I would like to see us develop the right incentives to support retailers who offer water efficiency savings to their customers. I would also like to see us work together as an industry to improve data quality and metering, which is fundamental to customers understanding their water consumption, as well as moving towards a more consistent national approach to data.
We will be encouraging all Water Resource Management Planning groups to sign up to MOSL’s Data Sharing Agreement to help build a clear picture of water usage patterns as we develop a Data Strategy and Charter for the NHH market in parallel.
We will also continue to work with the RWG in the delivery of its Water Efficiency Action Plan, which was developed following the Ofwat and EA joint letter, to bring in the various efficiency groups and activities together.
To find out more about MOSL and its role click here.
