Delivering on Ofwat's determinations

In response to the publication of the Manifesto for Water which revealed the Water Industry’s proposed plans for the next five years, Ofwat has released its draft determinations – raising the bar on what it believes water companies should be able to achieve with its funding. Ofwat’s draft proposal challenges water companies to deliver improved and more resilient services as well as reduce bills for customers before inflation. Here, we outline the role Veolia Water Technologies UK can play in helping municipal water companies deliver on Ofwat’s determinations which are due to be finalised in December this year.

A summary of what Ofwat believes the Water Industry should be able to achieve by 2025, the draft determinations put forward a challenge to municipal water companies to reduce costs and improve services to the best possible extent. The key points laid out in the draft determinations were:
  • £12 billion should be invested by municipal water companies over the next five years to improve services. This includes £2.3 billion to improve resilience and security of supply.
  • Investment in technology and innovation is also advocated to address challenges facing the sector and provide greater customer service and affordable prices. The level of funding to be invested is yet to be determined but will be clarified in the final determinations in December 2019.
  • Domestic water and sewerage bills are to be cut by more than 12% for customers before inflation.
  • The number of customers receiving financial support from their water company through social tariffs and WaterSure should increase to nearly 1.5 million customers each year.
  • Interruption to water supply should be decreased by 64% on the previous period.
  • Water leakage should also be reduced by 17% between 2020 and 2015. This will save a water equivalent to the needs of the population of Manchester, Leeds, Leicester and Cardiff.
  • The number of pollution incidents should be reduced by 34% by the end of 2025.
  • A £4.6 billion investment will be granted to water companies to deliver the ambitious Water Industry National Environment Programme for England (WINEP) and the National Environment Programme for Wales with aims to improve 12,067 km of rivers for the benefit of people and wildlife. 

In order to deliver on these proposals, it is necessary that municipal water companies utilise funding to invest in the right technologies to enable them to provide the required service improvements whilst also sufficiently cutting costs for customers.

One way in which municipal water companies can look to reduce domestic water bills, is by investing in the optimisation of water and wastewater treatment processes, allowing for an increase in both biological and hydraulic capacity per wastewater treatment plant whilst also cutting costs.

At Veolia Water Technologies, we advocate the use of digital technologies and the Information of Technology to enable remote, real time monitoring and optimisation of treatment systems. Veolia’s own AQUAVISTA Plant, part of its AQUAVISTA Digital Services offering, for example, uses sensors installed across the sewage treatment plant or even the whole network to collect real-time data about the system’s performance as well as tracking the external factors that will affect the wastewater network. This information is aggregated and displayed in real time on a dashboard overview that can be tailored to the specific needs of the site. This data is then used, through the use of specially designed software, to identify and meet the optimum operational parameters.

By utilising a sophisticated algorithm-based optimisation method AQUAVISTA Plant can deliver as much as a 40% increase in biological load with the same effluent concentrations, whilst also facilitating a 20% to 100% higher flow rate through the wastewater treatment process. A further benefit of optimisation is reducing the level of capital expenditure required. By maximising the potential hydraulic and biological capacity of the plant it allows municipal water companies to meet the demands of population growth or tighter regulations without having to invest in new plants or facilities.

Through the use of a service like AQUAVISTA Plant, operational costs can also be reduced. Incoming effluent can often vary in quality and as such, overmixing, overaerating or the overdosing of wastewater with water treatment chemicals is often an issue during effluent treatment. By consistently monitoring the wastewater sludge quality parameters and regularly adjusting the plant accordingly, an optimisation platform can significantly reduce energy consumption, and energy costs, for the plant and the municipal water company.

By investing in optimisation technologies, municipal water companies can cut operating costs, increase load and prevent unnecessary capital investment in the future when demands change. Through this reduction in expenses and increase in capability, municipal water companies will be able to progress towards the 12% reduction in domestic water bills set out in the draft determinations - which will undoubtedly be reiterated in the final determinations - and move one step closer to meeting the targets set by Ofwat by 2025.

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Mike Froom

About the Author

Mike Froom

Mike has worked in the Construction Industry for nearly 35 years, joining Veolia Water Technologies 25 years ago. He has held a number of senior commercial and operational positions for VWT over the years and has been Business Development Director since 2005. Mike has also been a Non Executive Director of British Water and past Chair of the UK Forum helping to represent the interests of British Water members and contribute on key industry issues.