Expert analysis of the UK water sector
February 2025
Issue 112
This website includes excerpts from the latest edition of THE WATER REPORT.
Full coverage is available only in the print and digital editions of the magazine. SUBSCRIBE HERE
Water for growth: mindset not afterthought
Water is rarely considered in development planning but is expected to be a significant constraint on growth. With Government ambition running high, it’s time for some fresh thinking.
If there was ever any doubt about the Government’s core mission, that evaporated with chancellor Rachel Reeves’ big growth speech late last month. The administration’s top three priorities are growth, growth and growth: growth to reinvigorate the economy; growth to improve living standards; growth to save public services.
The availability of water to underpin this ambition did get a look in in the speech, specifically regarding the revival of the Ox-Cam Arc, now the Oxford-Cambridge Growth Corridor. It is pretty hard to ignore it when high profile projects like the new Cambridge Cancer Research Hospital are held up by water constraints.
Frustratingly, everyone wants growth and resilience but currently there are many factors that conflict with each other across regulators, stakeholders and industry that need to be resolved asap.” Expert Forum member
Set for a reset
Expert advisors are recruited and a call for evidence imminent from the Independent Water Commission.
Where might the focus go?
Expectations of the Independent Water Commission are running high. It’s been billed as a once-in-a-generation opportunity for real change, and everyone seems to want a piece of that action.
But the task at hand is huge and time incredibly short, with recommendations expected from the Commission in June. The Call for Evidence, seeking views from all interested parties, is now scheduled for February, leaving only four short months to digest and evaluate the (inevitably exhaustive) submissions.
It is something of a relief, then, that an impressive advisory group has been assembled to help. This seems to be deliberately comprised of interest area specialists, many of whom have some water experience – rather than high-calibre disinterested parties convened to take a completely fresh look, albeit all have experience way beyond water.
The Office for Environmental Protection shows its teeth
David Lloyd Owen is impressed by the OEP’s desire for data
and willingness to highlight the shortcomings of green regulation.
What makes the Office for Environmental Protection (OEP) so intriguing is its continuing drive to get the information it believes it needs to gain a proper appreciation as to the state of the environment in England and how entities such as Defra, the Environment Agency (EA) and Ofwat are performing when it comes to delivering various environmental objectives. These regulators can tend towards either self-congratulation or self-justification. The OEP has time for neither.
Progress in improving the natural environment in England 2023/2024
is a broad sweep of the state of nature in the nation. The chapter Clean and plentiful water is one of the longest of the 11 broad objectives considered, while quite a few of the others also touch on water.
The OEP’s particular gift lies in shining new light on new light. For example, by comparing annual rainfall at each of the nine English water and sewage companies with average combined sewer spill overflow occurrences per
overflow in each year, it found that there is in fact a material relationship between the frequency of spills and the amount of rainfall. The EA did not make this connection in such terms when reviewing CSO performance in 2023. This suggests that the OEP both enjoys a leadership focussed on its job and is staffed with motivated people.
Can robots deliver trust and value in water?
An Indepen/IBM roundtable found huge potential in Generative Artificial Intelligence for water, if a structured approach to realising value and managing risk is followed.
Can robots help to rebuild trust and deliver value in the water industry? Well, not robots exactly, but Generative Artificial Intelligence (GenAI). That was one of the themes explored at a roundtable for senior water and energy executives hosted late last year by Indepen, in partnership with IBM and Microsoft, both of whom have GenAI experience within and beyond the sector, and have views about how deployment can be encouraged in water.
Participants concluded that GenAI can’t restore trust single-handedly, but its transformative potential could certainly help.
With appropriate frameworks and safeguards, GenAI will play a significant role helping utilities improve their performance and rise to the challenges they face.
Breaking down barriers
Future leaders champion whole systems thinking for a Volatile, Uncertain, Complex, Ambiguous, Dynamic and Diverse world.
Without adopting whole-system solutions, we risk falling short of delivering the government’s ambitious economic and environmental goals in a way that is acceptable and remains affordable to society. This was the central message from the inaugural Indepen Future Leaders’ Summit, which was co-developed and delivered by the first cohort of MBA students in Sustainable Energy Futures at Strathclyde University.
To inject fresh perspectives into the complex challenges facing essential services industries, Indepen convened the MBA students with seasoned leaders from the water, electricity, gas and transport sectors for a day-long summit. The topic? Whole systems thinking—a choice the students felt was non-negotiable in today’s Volatile, Uncertain, Complex, Ambiguous, Dynamic and Diverse (VUCAD) world.
will keep you on top of the threats and opportunities emerging from retail and upstream competition.
It's the eye on the competition
Paying the price
Poor PR24 price-change communications have left large customers unprepared for the reality of bills that will be even bigger than they expected, Neil Pendle argues.
Waterscan has spent the past month analysing PR24 final determination information to ascertain how the customers it serves will be impacted. These are principally those in the Self-Supply community and other large users.
Your headline number and how it actually pans out are two entirely different things.”
Waterscan chief executive, Neil Pendle
Chief executive, Neil Pendle, flags two key findings. First, there is clear blue water between the average bill impacts quoted by Ofwat in its documents and what large business customers are actually facing.
Second, communications on price impacts for non-household customers from both the regulator and the industry are badly deficient – to the point that they must be considered misleading.
Big ideas for smart meters
Large users got together with trading parties to share thoughts on what would make the smart rollout work for them.
Three quarters of supply points are due to be smart metered by 2030, virtually all by 2035. It is in everyone’s interest that the rollout itself, and ongoing smart arrangements, work for customers. But it’s a major undertaking.
Medium and large meters make up only a small proportion of all non-household meters, but installing or upgrading these to smart will be especially challenging. It will cost more, and likely be more disruptive and more complicated. Experience from first mover Thames Water suggests each such installation brings its own challenges: from gaining access or a tricky excavation, to needing to work out of hours, manage traffic or manage a water dependent or sensitive site.
Late last year, the Major Energy Users’ Council convened a meeting which brought its large water user members together with wholesalers, retailers, MOSL, Ofwat and others, so big customers could share up front what would make the smart rollout work for them. It was also an opportunity share any issues or concerns they had. The idea was to help the market understand these needs and take account of them upfront.
Rooting out poor data
MOSL’s latest business plan seeks support for a new Strategic Data programme.
MOSL is seeking input from wholesalers and retailers on running a new Strategic Data programme, to address the root causes of poor data entering the business retail market. The programme would focus on:
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market processes and whether they are supporting good-quality data entering the market and central systems;
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market systems and whether Central Market Operating System data fields are structured in the best way to capture consistent and accurate data; and
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whether market codes allow for data to be used for wider benefit, including industry segmentation and future demand management.
The new programme would run in parallel to the data assurance service MOSL already provides.
CONTENTS
February 2025 - full contents of the magazine
REPORT PR24 latest – FD acceptances and bill impacts.
EXPERT FORUM Water constraints on the growth agenda.
REPORT Water Resources East’s regional plan – progress report,
one year on.
FEATURE The Office for Environmental Protection is showing
its teeth.
REPORT Bricks & Water study urges Government not to grow in
flood zones.
FEATURE Urgent calls to address environmental harm.
REPORT Cunliffe Commission – expertise and evidence.
FEATURE Future leaders champion whole systems thinking.
REPORT Update on Thames Water’s financing predicament.
REPORT Bleak trends in the UK Customer Satisfaction Index.
FEATURE Can robots rebuild reputation? Analysis of GenAI for water.
will keep you on top of the threats and opportunities emerging from retail and upstream competition.
It's the eye on the competition.
REPORT MOSL’s latest business plan seeks support for a Strategic Data programme.
INTERVIEW Waterscan’s Neil Pendle on shock PR24 impacts for business bills.
NEWS REVIEW Class action seeks ‘overcharging’ compensation.
FEATURE What do large customers want from the smart meter rollout?
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