H3O: Looking to the future

As part of Utility Week’s H3O series, we consider what lies ahead and how the industry will meet the even greater problems of climate change and population growth by employing technology and innovation to bolster resilience.

When Utility Week marked the 25th anniversary of privatisation the environment, while a concern, was not as prominent an issue in day to day running of companies as it is today. Business plans submitted for the spending period 2020-25 for each of the 17 water companies in England and Wales heavily feature resource planning to manage the effects that droughts and floods bring.

This work sits alongside the increasingly urgent need to reduce water usage – a topic which for some reason has failed to resonate significantly with the wider public. Sir James Bevan’s apocalyptic level warning that the UK could run out of water in 25 years somehow failed to motivate the population to action to preserve the precious resource. In contrast to David Attenborough’s wake-up call about the far-reaching effects of single-use plastics, the head of the Environment Agency’s “jaws of death” speech didn’t have people pledging to drastically reduce consumption. This is an area which Utility Week’s election manifesto, published this week, focuses on – calling for the next government to introduce a nationwide campaign, and dedicated resources, for water efficiency.

“We’re going to run out of water, and we need to change our habits now. This is what’s important more than privatisation. This is what we need to focus on,” urges Chris Loughlin at South West Water. “This is real, we need to do something about it and build reserves and resilience and the ownership debate just takes oxygen away from the main issue.”

Changing habits and minds will take a joined-up approach and innovative thinking by looking holistically at the water challenges across England and Wales not just the current water company boundaries.

“Looking ahead the challenges are bigger and bolder than we thought. We’ve got less water available and more people demanding it.” Ian McAulay says; indeed, some parts of Southern Water’s region have less water per head than Morocco.

His company’s policies to build resilience and increase water efficiency consider usage at all levels and scales – from household to industrial and agricultural. “We need to engage technology,” McAulay explains. “We’ve got to work multi-sector – something water companies are already good at, but we need more. At Southern we are working with other industries, private clients, with farmers and land users and across multiple funding models.”

Let’s get technical

Technology may yet save us all from a dying planet but a recent survey of senior industry figures, carried out by Utility Week and global technology consultancy Wipro, reveals how underprepared many businesses are to utilise digital technology. More than 30 per cent of organisations in the sector lack a clear vision and strategy for the role technology will play.

Artificial Intelligence, digital twins and the Internet of Things have each been tipped to hugely impact the shape of utilities but businesses need specific plans of how these technologies are applied to be beneficial.

Variable factors of age of assets, geography and regional weather patterns mean companies have individual approaches to what, where and how technology is best used but with many shared sector goals perhaps there is a need for a framework to show which technologies will make the biggest impact on challenges such as leakage. Under the steering of Water UK the sector has committed to tripling the reduction of leak and has began a joined up approach to make this happen.

Data in the water sector can be combined with other technologies to combat problems. Stuart White, leakage services manager at Black & Veatch explains that companies can use data from their networks including mapping, pressure monitoring and sensors, to assess not only where leaks are but where they are likely to happen and respond in real time.

White says asset monitoring and better levels of data integration, which support enhanced artificial intelligence (AI) capabilities, will be key to achieving the leakage targets.

Another way AI is at work is with United Utilities, which was the first water company to bring large-scale AI into its operational systems, through Canadian company called Emagin. The company looked at ways to predict demand and ensure there was always sufficient supplies to reduce the need for pumping water and thus save energy. Emagin’s system analyses data from sensors, customer information and even Twitter to anticipate a demand schedule. Pumping schedules produced by AI are accurate to 15-minute periods and replace previous daily schedules. These are reviewed by an overseer, but the next step will be to let the AI make and execute its own choices. UU is discussing the potential to roll the technology out across its region.

Elsewhere Southern Water is using AI to process data gathered about customers’ water usage to give a more comprehensive personalised report on how the household can save water.

A digital twin, while sounding like a synthpop band that play local pubs, is the name given to the reproduction of a network or area of a network that can be monitored in real time. The twin can provide information on an asset such as pipes or water treatment infrastructure and utilise AI and virtual intelligence to feed back information on the health of its physical counterpart. Anglian Water has given the green light to build the largest digital twin in the sector in Newmarket, the town where it pilots multiple innovative projects. The town is its testbed for achieving seven targets including zero leakage and reducing PCC to 80 litres per day.

Another industry first is the use of AI to improve customer service. Severn Trent has launched a chatbot to answer customer queries during busy periods. The bot will initially handle enquiries about billing but, equipped with the ability to learn as it interacts with customers, will be able to tackle more advanced issues in time.

Collaboration is the key because you are your own destiny

Fighting water shortages head-on, companies are looking beyond borders to implement a joined-up approach to managing resources. Regional water resource management groups have been set up across England and Wales to plan for deficiencies and excessive amounts of water. Recent floods in the Midlands and Yorkshire emphasise the urgency of being able to redistribute water.

Bob Taylor, chief executive at Portsmouth Water, explains how variable geography can be. His company has a supply deal with neighbouring Southern Water to capitalise on a surplus in Portsmouth’s region, while Southern has a deficit. “Water is a local service; we can’t plug into a national grid and water is an expensive commodity to move around. Therefore each region is dependent on the rivers and boreholes in that area. Even across the small country climatic variations differ hugely. The southeast and East Anglia are particularly dry and localised in terms of weather.”

Portsmouth is building the first new reservoir in decades to collect and store water to re-distribute into Southern’s region. Meanwhile, in the next investment period Anglian Water plans to build a pipeline to move water from Lincolnshire to Essex to reallocate water around its regions.

Investing in balancing excess and insufficient water is the heart of the challenge as Colin Skellet at Wessex Water echoes. “The big issues for this sector are firstly, climate change – it’s going to take investment to maintain resilience,” he explains. “The ways of dealing with the changes are through innovation. Catchment management is a way of reducing capital investment and a more sustainable way of doing it.”

Loughlin says the industry needs to sensibly invest in the future to deal with volatile weather patterns. “The industry is often criticised for not investing enough, but if you put your shareholder hat on, they love nothing more than us spending money and getting a return on it. People are delighted to invest in the future and to have a regulatory regime and a joined-up approach to investing in the future.”

In the spirit of collaboration, the economic and environmental regulators have joined force with stakeholders for a national plan for longer term water resources preparation outside of the constrictions of price reviews.

The Regulators Alliance for Progressing Infrastructure Development (RAPID) brings together the Environment Agency (EA), Ofwat and the Drinking Water Inspectorate (DWI) to get necessary infrastructure built. The UK is predicted to need an extra 1300 megalitres of water each day to meet the needs of a growing population and needs longer term planning to meet these needs.

As well as RAPID, Ofwat is allocating extra cash to companies to stimulate innovation. It is welcoming proposals for projects and wants to drive transformation in the sector. Companies that demonstrate collaboration and innovation could be granted permission to increase customer bills to generate the cash to fund the projects. Up to £200 million would be shared between projects.

There is no shortage of innovation in the sector and it is increasingly looking outside of itself to find answers. This year was the third Innovation Festival hosted by Northumbrian Water as well as the first Innovate East co-hosted with Anglian Water. Screens around the event beamed the call to arms “We are not just inviting you to be part of the conversation, we need you to be part of the solution”. The response from the tents was thousands of people working together to find these solutions. Attendees from a breadth of sectors, educational establishments and backgrounds generated ideas in hackathons and sprints a la Google.

Northumbrian Water says its success rate from investing in innovation has been a return of £8 for every £1 spent and about 40 per cent of the ideas from previous festivals have delivered value for the company suggesting the bean bags and yoga approach pays.

Need the next generation

Like investment, the industry needs a constant flow of innovative ideas but is at risk of that flow being interrupted as a large chunk – one fifth – of the workforce is soon to retire and the next generation is not yet lined up to take on the roles. Lila Thompson, chief executive of British Water, sees the opportunity in the skills gap to recruit from a broader pool.

Earlier this year she told Utility Week: “There are people with the necessary skills available but maybe working in different sectors, so companies need to be willing to offer training to attract people from other sectors with the right skills.” she says. “The water industry needs to push itself more to attract and retain women. The wider utility sector is not that great in terms of its diverse workforce, but I think the water industry is lagging the other utilities.”

With a workforce dominated by white men, even compared to other sectors, there is a need to diversify by attracting people from different backgrounds to work in the sector. The overall water workforce is 80 per cent male, compared to 53 per cent for all sectors and 96 per cent of workers are white, compared to 85 per cent in the wider UK workforce.

Think nationally, talk locally

Focusing on people is essential for another goal the sector must achieve, getting closer contact with customers and the communities they work in.

According to CCWater’s Tony Smith, proactively communicating with customers and communities at a very localised level would help change ingrained perceptions. “Companies can improve things with more information about what they are doing at a very local level. Locality is an important point, and some are getting that right now. Those that aren’t need to deal with customers as individuals rather than treating customers as a whole mass.”

Tackling impacts of climate change, population growth, using technology and innovative ideas to solve problems and provide better service as well as communicating better with customers is no small ask. The challenges of the next 30 years are over-shadowed by calls for renationalisation, but for one chief executive the companies must focus on the essential role they play in society and remember to keep customers and communities at the heart.

“We are providing the most fundamental public health and environmental service,” underlines Colin Skellet at Wessex. “That’s what we’re there to do and we need to be much better at communicating that. Working closely with local communities and people to make sure there is that engagement – we need to be talking to people.”