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Water Industry Tackling Net Zero Head-On

A REPORT ON THE WINTER 2021 SELF-SUPPLY USERS FORUM

Speakers from Anglian Water, CDP, MOSL, Ofwat, Strategic Panel, Thames Water, Water UK and Waterscan addressed the largest Self-Supply Users Forum (SSUF) since market opening on 2nd December 2021. Twenty-two significant non-household water customer delegates attended the meeting, giving these organisations, and the water industry that serves them, an unprecedented opportunity to share views and best practice.

As expected, following COP26, there was a major focus in this SSUF on sustainability with much engagement around how the water sector will achieve its net zero goal by 2030 and support businesses on their own carbon neutral pathways. These discussions highlighted the inherent link between carbon, emissions and water, and the collaborative role that all parties must now play.

While water efficiency work conducted by Waterscan and its customers in 2021 has led to a significant drop in water use across the Self-Supply sector, there’s an urgent need for the rest of the market to catch-up, as Samuel Larsen, Water UK, explained.

“The need for quick action has never been clearer,” he said. “There are really strong messages coming from around the world that companies and policymakers in the West must act now. The UK has responded with a ‘critical decade’ framing, signalling that what we all do in the next ten years really matters. There’s huge momentum and policy change around this – it’s quite unprecedented. Net zero is a new operating environment for all sectors. Those organisations that have been slow to change are beginning to stand out very clearly.”

He explained how Water UK’s scenario modelling has proven that the most affordable option is to take preventative action on efficiency now; all progress is intrinsically linked to consuming fewer resources.

David Riley, Anglian Water, picked up the theme, confirming that all wholesalers have produced route maps to net zero by 2030. Anglian’s plan encompasses a 70% carbon reduction against a 2010 baseline and investment in renewable energy. It is also embracing green finance, having issued over £1bn green bonds to date, which he said demonstrated that ‘when an organisation has credibility in what they do, the investment community responds’. David noted the need to work collectively and with excellent leadership which sets an appropriate vision and tone to create nature-led solutions.

Matthew Gee, Thames Water, spoke of Thames’ long journey to net zero which began in 1990. It has saved 1Mil litres of diesel and converted methane and nitrous oxide into biogas, sufficient to power its entire fleet. Despite steady progress, David knows that the final 35% push to net zero will be the greatest challenge, requiring large-scale collaboration to create circular economies. The water sector needs a real focus on wastewater processing and the emissions it produces, he said, and was pleased to report that Thames would be piloting a cold anaerobic treatment solution, thanks to a grant from the Ofwat Innovation Fund.

Patricia Calderon, CDP, highlighted that Glasgow was the first COP to feature water in a major way. “With a Water Pavilion at its heart, there was unprecedented convergence between investors, businesses, cities, NGOs and subnational regions that could drive real economic transformation through water,” she said. “There’s lots of work to do but there’s also a lot of positive action taking place and everyone is motivated. Sustainable finance is the catalyst for transformation, and that all begins with transparency and reporting.” She noted that water scarcity is certain to be a key pillar of COP27 taking place in November 2022 in Egypt.

With regard to progress in the water market, meeting delegates heard that the Self-Supply community has achieved a sensational 12-month rolling average 98.5% market performance score, thus delivering a higher level of accurate data to the market than any other trading party.

Similarly, the number of long-unread meters is significantly lower than the rest of the market at just 1.5% across the Self-Supply estate, giving these water customers near perfect visibility of their consumption and costs, and the ability to take informed strategic decisions on efficiency.

Ofwat’s Dan Mason reported that work is still needed to put customers at the heart of the market, but the regulator is optimistic that the new Strategic Panel and Code Change Committee will turn the dial to give customers the ability and the power to drive change. While supportive of efforts to resolve bilateral frictions, Ofwat wants to see more progress on market performance frameworks, incentives and innovation (in which it believes the water sector lags behind the rest of society). He highlighted the Ofwat Innovation Fund and Industry Market Performance Fund as routes to progress.

MOSL’s Sarah McMath presented the market operator’s updated business plan to 2025 which responds to trading party feedback and aims to make the market easier to do business in. The operator also reflected on the current market performance framework which it believes is ‘flawed and does not deliver the right outcomes for customers or the environment.’ Work is underway to address during 2022. Meanwhile, MOSL acknowledges that Self-Supply meter reading performance is significantly higher than the rest of the market, which is at 65%, and noted that ‘without customer awareness of their water consumption it will not be possible to deliver water efficiency’.

Chair of the new Strategic Panel, Trisha McAuley OBE confirmed that panel members have been appointed and they have met for the first time. Strategic priorities are being developed, along with new communication and engagement principles to ensure that all panel members understand and represent all market parties.

WANT TO SEE THE FULL REPORT?

You can view the full report of the Winter 2021 Self-Supply Users Forum here or you can view reports from previous meetings here.