Stretching the water cycle

Population growth, climate change, rising domestic water use… when water companies peer into the future they need a wide-angle lens.

Failure to think long-term is a criticism often levelled at politicians. The water industry has also traditionally planned investment in a rather short-sighted way. But last year, Ofwat, the economic regulator for the water industry, made it a requirement for all UK water companies to prepare 25-year strategic direction statements alongside more detailed five-year business plans. This has clearly opened the way for more innovative thinking in the sector.

Yet planning so far into the future is no mean feat. Think back to the 1980s before the birth of home computing, the Internet and mobile technology, and you’ll get a sense of just how much things could change over the next few decades. To help understand the range of future scenarios and expectations of both customers and stakeholders, Thames Water decided to carry out extensive research. Over 1,500 customer surveys, focus groups, stakeholder workshops and interviews with MPs fed into a draft plan – the first within the industry. The draft was then itself the subject of the company’s largest ever public consultation. What came out was Thames Water’s Strategic Direction Statement for 2010 to 2035, which forms the basis for the company’s forthcoming submission to Ofwat.

“The dialogue helped bring into focus some of the key challenges that all water companies will face in the future,” says Rob Harrison, Thames Water’s periodic review director. “Our business has to provide sustainable and affordable services, while addressing complex demands like population growth, changing customer behaviour, climate change, tighter legislation, and rising household use of water.”

Take population growth, for example. This both increases pressure on water resources and presents odour management challenges when pressure on land means residential developments are built closer to our sewage works. Then there are the extreme weather events expected as a result of climate change, along with tighter legislation. These mean the industry will face further wastewater and sewer flooding challenges. So Thames Water is currently planning its investment in London’s proposed Tideway Tunnel, which would capture overflows from London’s Victorian sewers.

One of the key messages that came out of the consultation was that “sustainability, adapting to the inevitable consequences of climate change and reducing our own contribution to climate change were all issues that people want tackled with a real sense of urgency”, says Harrison. Another recurring theme was the need for more education on water efficiency and using water wisely. “We’ve got a strong track record on this but want to do more, and our strategy reflects this,” he adds.

Wise water use is key in Thames’s view of the future. Last year’s government announcement on metering – that water companies in “water stressed” areas will be required to consider compulsory metering from 2010 – has spurred some creative thinking within the company. “In the future, we could be seeing automated meter reading, new ways of charging for water to incentivise efficient use, or even technology that enables customers to monitor their own daily water use online, for example,” says Harrison. “Increasing visibility of water use means both our customers and the environment will ultimately benefit.”

However, Thames’s work to date has shown that even comprehensive metering and water efficiency, combined with reducing leakage, won’t be enough to balance future supply and demand for water. “It’s clear,” Harrison says, “that new sources of water, possibly such as the proposed reservoir southwest of Abingdon in Oxfordshire, will need to be developed over the next 25 years as well.” The issue is one that will be addressed in another consultation in April 2008.

“Ongoing dialogue on our strategy really helped us to understand the priorities of everyone who benefits from our services,” says Harrison. “We very much hope our customers and stakeholders will want to be a part of the next stage of the process too. In the meantime, we’re ready to begin translating our Strategic Direction Statement into action.”

Thames Water is a Forum for the Future partner.

6 January 2008

Darren Towers