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The Open Water Market: Now is not the time to gamble

Next month signals the dawn of a new era of water supply in England.

From April 1st, commercial and other non-residential water users based in England have the opportunity to choose where to buy water and wastewater services from.

This freedom of choice is most welcome but with it comes complexity. With multiple service providers and procurement routes available, careful consideration of the options is a prerequisite for making the most of the open market opportunity. However, with some sectors showing little evidence of customer engagement and the well reported general poor awareness levels, our concern is that the majority of England’s eligible businesses will be gambling away the prospect of cost and consumption efficiencies.

Not the time to gamble

We understand that, because businesses in England have not had to concern themselves with water supply before, venturing into a whole new area feels like a bit of a gamble. But, just like the gas and electricity markets previously, benefiting from the open market is not a game of chance and, without some independent guidance and forethought, important gains could be lost before you’ve even entered the marketplace.

Many organisations will wish to manage their own water and waste water supply internally having robust procurement processes and procedures in place. Some will take a leap into the unknown and consider self-supply; a proactive approach which will give ultimate control in the retail marketplace. Many more however will take the potentially costly option of taking no action as water isn’t currently seen as an organisational priority.

Whatever your start point, our decades of experience in the sector demonstrate the need for a strategic, well informed approach – which is why we have designed a variety of services to support clients in optimising the benefits and opportunities that the open water market offers.

We recently announced that we had become the first non-water supplier to be awarded a Water Supply and Sewerage Licence by Ofwat. This licence enables us to facilitate self-supply procurement on behalf of our clients. But what exactly is self-supply, how does it work and could it benefit your business? If it is not for you, what are the alternatives?

Self-supply is a good option for non-household water users who want complete control over their water consumption and greater cost savings. It is suitable for large multi-site customers or high consuming organisations who wish to influence the marketplace while benefiting from enhanced service and wholesale prices. The service will navigate the complexities of the market; give support in achieving and maintaining a licence and deliver comprehensive management of the administration required to self-supply water. Find out more about self-supply.

An alternative for those who do not wish to get involved in shaping the market but want best value is our outsourced water procurement process. This strategic approach gives you independent analysis and a fully managed tailored end-to-end tender process to secure the right retailer for your organisation’s specific needs. It is best for industrial and commercial water users with a higher annual spend, nationwide or complex portfolios who want help choosing the right retailer in line with operational needs, existing procurement systems and sustainability goals. Any suitable organisations who have not had to deal with water procurement before will benefit from this approach as you will quickly build detailed insight into your organisation’s operational water footprint. Find out more about outsourcing water procurement.

Organisations that have lower water spends, or lack resources to play an active role in the new open market, may feel that they are better off staying with their existing supplier or conducting their own tender, perhaps believing that any savings they make will be offset by the resource involved in research, analysis and negotiation. If you fit into this category we would urge you to get your data cleansed and in order beforehand. Industrial and commercial organisations can take advantage of our free Water Check service. This delivers a comprehensive review of a recent water bill for each site in your property portfolio resulting in a report detailing opportunities for improvement that are unique to your organisation. When this data is benchmarked against sector peers, opportunities for efficiencies and savings will be revealed. At the very least, this detailed insight into your operational water footprint will assist in negotiations with your current or future water supplier. Find out about our range of water management services.