Pipe up: innovation is needed to deliver on PR14

“Unless we act now, we will not always be able to supply all the water we need, when and where we need it.”

The outcome from PR14 is expected to be the toughest Final Determination yet; water companies are restructuring in preparation for retail competition.

“We don’t want to win the race, but we do want to be leaders of the following pack,” is one of the ways I have heard water companies describe their attitude to innovation in the past.

This attitude, however, has changed or is changing across the water sector – and you don’t have to look far below the surface to understand why. The challenges it is facing now and in the future are huge and unprecedented.

Climate change has the potential to affect the way we are able to collect rainwater and threatens the resilience of our infrastructure. Together with a growing population, a shift towards a greater percentage of single-­person households and changes to abstraction licensing, there is a real danger that unless we act now, we will not always be able to supply all the water we need, when and where we need it.

A better ­understanding of science is leading to tighter treatment standards and in some cases a need for new processes altogether to address previously unseen and unknown dangers. The pressure to reduce carbon emissions and the rising cost and potential unavailability of energy will not only make the task more difficult to address, it will also affect affordability and the customers’ ability to pay.

With threats to our ability to meet future water demand, and the prospect of more to do with less money to do it, it is not surprising that considerable effort is being put into developing net-energy-positive treatment solutions and into viewing wastewater as a resource rather than waste. As one water company puts it, “water recycling” rather than “wastewater treatment”.

All this is against the backdrop of the greatest period of change the industry has seen since privatisation.

The outcome from PR14 is expected to be the toughest Final Determination yet; water companies are restructuring in preparation for retail competition; capex and opex are set to be replaced by totex, and new and amended European Directives are imminent.

With so much upheaval and with so many challenges appearing to conspire against us, one might be forgiven for fearing a perfect storm is brewing.

Innovation is needed if we are to avoid a storm and it is reassuring to see many companies’ innovation strategies evolve from “wanting to be leaders of the following pack” to “wanting to win the race”.