Ofwat has today (October 11) taken a major step towards opening a market for bio-resources, a key part of the upcoming PR19 price review.
The regulator has published guidelines and requirements for companies to share common and consistent information about their sludge, or treated sewage, including quantities and moisture content. This information will enable those interested in buying sludge to make informed decisions about the value of the product when the market opens in the next AMP cycle, AMP7, running from 2020-2025.
Ofwat is planning to introduce a competitive market for the treatment and disposal of sludge in AMP7 to encourage efficiency and innovation. Sludge, also known as bio-resources, can be used to produce biogas, or green gas, which can be cleaned and injected into the gas grid or used to generate low-carbon electricity. After processing, it can also be safely used as a fertiliser.
The regulator is also introducing new requirements for companies to publish information about their water resources. It hopes this will encourage water trading both between companies and with third parties – another key element of PR19.
Ofwat’s senior director of Water 2020 David Black said: “We’re always looking for opportunities for customers to get better value. Sometimes that means thinking creatively about how we can get more from all parts of the water sector – even those that might make some of us feel a little squeamish.
“The idea of reusing waste to create low-carbon electricity works and can deliver environmental benefits and could also result in lower bills for customers.”