Water industry regulator, Ofwat, published its final determinations on 16 December 2019, with PR19 bringing £51 billion of investment for water companies in England and Wales to transform the industry.
Ofwat Chief Executive, Rachel Fletcher, said:
"Today we’re firing the starting gun on the transformation of the water industry backed by a major investment programme to deliver new, improved services for customers and the environment and resilience for generations to come. Now water companies need to crack on, turn this into a reality and transform their performance for everyone."
The Price Review is split into 5 key areas; Resilience in the round, Environment, Customer Service, Affordable bills and Innovation, all underpinned by the need to collaborate within the industry, and wider, to come up with solutions needed to meet the challenges. The scale of the challenges facing the Water industry are larger than they have ever been before.
Bernie Kane, Utility leader, Vetasi says:
"Asset health will be the keystone for water companies to be able to deliver services and meet their obligations to customers, and the environment, by focusing asset maintenance in the key areas."
With £13bn assigned to ‘Resilience in the round’, just over 25% of the funding available for AMP7 is focused on investment for new and improved services to tackle the challenges facing the sector. Ofwat says that water companies ‘need the right information, systems, processes, governance, capabilities and finances to make decisions about their operations, maintenance and investment in the short and long term.’
Strategic, integrated enterprise asset management (EAM) will be imperative for the success of Water companies to achieve the targets set out in the review. A successful EAM solution delivers the visibility required to manage and maintain mission-critical assets, and to maximise their availability. This will be essential to help reach the challenging service levels set out, such as 12% fewer mains bursts and a decrease in supply interruptions by 41%.
Asset health plays a large role for other Utilities, such as Electricity suppliers, in meeting regulatory targets. Preventative and predictive maintenance strategies enable Utilities to target improvement programmes for the assets that require the most attention, and therefore mitigate possible service performance issues. For Water companies to deliver on their commitments for resilience, proactive asset health management and measurement will be critical to success.
Customer Service and affordable bills
Delivering more for customers and gauging their satisfaction through the new C-Mex measures to improve customer experience, and the new D-Mex measures for service to property developers, will present some tough challenges for Water companies. Digital disruption technologies, such as mobility, scheduling, cloud, AI and analytics alongside agile methods of implementing rapid changes, will be fundamental to delivering business transformation and meeting customers expectations in an increasingly digital world.
Effective fieldforce management as part of an overall EAM strategy will ensure that data and intelligence is available in real-time to enable accurate, and proactive, customer communications. Resolving queries on when work is scheduled to take place and when it was likely to happen will mean water companies can meet their regulatory targets.
Fieldforce management in action
29% reduction in travel time, 30% reduction in mileage and 25% increase in SLA adherence.
Working with a customer with a distributed field force, a test using actual jobs completed by engineers in one month against different criteria applied by a scheduling tool, yielded the following improvements in mileage, travel time and SLA’s:
Although both tests saw significant reduction in mileage and driving hours, the biggest impact on the results were in test 2, when visit dates were as per the SLA targets rather than the baseline.
The mileage reduction is akin to ‘killing two birds with one stone’ in PR19 terms because that 29% reduction will have a material impact on water companies’ environmental goals. For a subset of this data, the following depicts one day of scheduling results;
Without question the environmental challenges facing the UK Water companies are unprecedented in the face of scarce resources, population growth and the extremes of weather caused by climate change. A strong environmental and sustainability emphasis runs throughout the whole of the PR19 final determinations. There is a drive from Ofwat for a water company mantra of ‘leaving the environment in a better state than they found it’. This is leading some water companies, such as Anglian to build a social contract into their Articles of Association and the creation of BSI standards for the industry.
Ofwat says the Water sector will cut leakage by 16% by 2025 – saving enough water to meet the needs of everyone in Cardiff, Birmingham, Leeds, Bristol, Sheffield and Liverpool. This target will be extremely challenging and, again, the proactive management of asset health will be critical to helping to reduce leakage to the levels set out in the review.
Utilities regulators have increasingly encouraged innovation and collaboration within the supply chain and across companies and utilities over recent years. This is seen as so important to the future of the industry now that Ofwat have built in financial incentives for the next regulatory period (AMP7).
An innovation competition with a £200m award, similar to the Ofgem Electricity Network Innovation and Gas Network Innovation competitions, has been launched by Ofwat to encourage water companies to collaborate with each other and other companies in their supply chain.
The November 2019 ‘Innovation in the Water industry’ report from WWT found that there was scope for improvement to work on innovation more widely. The table below from the report, demonstrates that while Water and Water & Sewage companies innovate with academic institutions and SME technology providers, there is more that can be done with other types of organisation. The results show that Water only companies work with other non-water utilities 1.78 out of 5.
That message has landed with Vetasi and is the reason why, in 2017, we set up an annual forum to enable Utilities to share innovative ideas and projects. This forum, led by Vetasi, is for Utilities in the UK and Europe. It draws upon our international expertise in the Utility industry, and shares best practice Enterprise Asset Management strategies, enabling Utilities to collaborate with a broad range of companies to share ideas and stimulate innovative discussions around topics such as mobility, scheduling, spatial situational awareness and hear industry insights from worldwide leading Utility experts.
The next event will take place in late April/early May 2020 and is open to senior Utility company leaders. Spaces are limited, please contact firstname.lastname@example.org to register your interest in attending.