The UK water industry’s major water companies have issued their seventh asset management plans (AMP7) for the period 2020-25 and these are now in the hands of Ofwat for review. While the regulator will be passing judgement on these plans early in 2019, companies are already in the process of pre-qualifying suppliers to deliver the AMP7 water investment round. In turn, Ofwat has set out a range of objectives under its price review 2019 (PR19), which, among its many objectives, will set prices for consumers over the same period.
Building on the previous AMP6 cycle, the industry’s AMP7 plans will continue to address issues of global significance such as climate change, water scarcity and population growth, at the same time delivering on Ofwat’s requirements for improved customer engagement, fairer pricing, water supply resilience and environmental protection. However, the tougher regulatory environment proposed in PR19 means AMP7 must deliver on behavioural and organisational change, particularly with regard to ongoing investment and engagement in the integrated supply chains that defined new directions for water companies’ engineering and operational activities throughout AMP6.
Though highly regulated, the UK water industry – unlike the energy sector – can fairly be described as “conservative” in terms of its attitudes to technological change. That is by no means universal because there are outstanding examples of engineering achievement throughout the industry, particularly its investments in automation and infrastructure renewal. However, Ofwat has made it clear in its PR19 report that, on the whole, the UK water industry lacks innovation. Indeed, the word “innovation” appears multiple times throughout Ofwat’s 300-page document, suggesting it is high on Ofwat’s agenda for the industry.
The quest for innovation throws up multiple challenges for water companies as they prepare to balance often tight budgets and capital investment frameworks of limited scope with the need to adapt to new ways of working – particularly with contractors and second- and third-tier suppliers armed with the technologies and working practices the industry needs in order to innovate, but which come at a cost. The supply chain must therefore be prepared to respond in kind to such restrictions through its own innovative abilities and deliver solutions that add significant value without stretching clients’ budgets.
By way of illustration, a recent project we carried out for Wessex Water provides an interesting example of how this customer’s particular process problem was not only solved to the satisfaction of both parties, but also developed into a fully packaged, factory assembled and tested plant that could be rolled out inexpensively across multiple sites.
The project was initiated when Wessex Water issued a framework tender call for phosphorous removal systems. The first challenge was to make these systems flexible enough to meet all control requirements and other product standards relating to different water utilities and approved suppliers. In particular, an innovative tank solution was deemed necessary to ensure compatibility with most chemicals.
In addition to the need for high flexibility, there were size and weight considerations – and then every detail had to be balanced against cost to make the overall price competitive. There were also time constraints and we had to consider risks in relation to weather effects. The project also placed considerable responsibility on the supplier to ensure that it was suitably equipped for all aspects of manufacturing, handling and transporting the largest units.
With the outline plant design established, WES worked closely with Wessex Water’s internal engineering and construction project team on developing it further to meet their specific operational capabilities and budget needs. Apart from the need to control costs, there was a logistical requirement to ensure the individual plant modules were both compact and low weight, so that even the largest unit could be handled in one lift and transported on a single, non-articulated, flatbed truck.
By fully assembling and testing the package modules in a factory environment, build quality was assured while the amount of on-site installation and commissioning activity was minimised. As well as reducing project delivery time, this mitigated the risks and site management costs associated with weather impacts and health and safety issues.
Design, delivery and installation of the units – initially ordered for dosing of ferric chloride and ferric sulphate – took nine months, completing earlier this year.
This project established the first formal framework co-operation between WES and Wessex Water and it demonstrates how a water company can engage with a supplier to innovate co-operatively – in this case to develop a common dosing system design, in only two size variants, delivered well within budget.