21st January 2016

Exploring the Water Challenge with Ofwat

Gauri Kangai

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On 12 January at the Geovation Hub we held a debate on water challenges from local to the global to encourage ideas and thinking around our Geovation Water Challenge, which closes on 27 January at 12 noon .  From the debate we gained perspectives across a diversity of water players including government, private utilities, third sector, research, green infrastructure and even current water innovators.

Ofwat, regulator of the private water and sewerage industry in England and Wales, were useful contributors– relaying the national water challenges that “keep them awake at night”.

Ofwat made it clear they are not an environmental regulator and do not have a role in directing water companies about what environmental standards must be achieved.  As the economic regulator they seek to create conditions that:

A number of challenges means the way services are delivered needs to change. For example, many rivers are at risk of too much water being taken out (over abstraction), especially in the south east, where population is only set to rise. Customers continue to require resilient services of drinking water. And, not least they now have an additional duty to further the ‘resilience objective.’

Therefore establishing resilient water and wastewater services from now into the future is a key challenge keeping Ofwat awake at night: resilience both in terms of financially, to meet customer needs – ultimately affordable bills, and environmentally, to make sure everyone has enough water whilst not compromising our surrounding natural ecosystems.

However, Ofwat cannot tackle these challenges alone. A resilient water sector can only be achieved through working with customers. They are not passive recipients – they are active agents. Service providers need a deeper understanding of the needs and requirements of different types of customers, including those in vulnerable circumstances and the more hard to reach customers.

“Resilience is not possible unless customers play an active part”. – Stephen Beddoes, Senior Analyst, Ofwat.

Ofwat feel that a broader approach to optimising how financial and environmental resources are used is needed to see how the water scarcity challenge can be met over the long term. Markets can help deliver this broad perspective because they reveal information that gives people choices, and enables transactions to take place that lead to resources being more efficiently utilised and allocated across companies, customers and the environment.

They see great potential in exploring smarter water trading. By sharing resources across company boundaries, this could unleash benefits worth £1 billion for both customers and the environment. Ofwat also cited the opportunity for a “sludge market” – for example, removing regulatory red tape to open up the market for creating energy from treated sewage. But they do not hold all the answers; coordination between all water players is vital.

The need for more dynamic abstraction sensitive to water availability was a particular problem identified in the Geovation Water Challenge’s deep dive, and highlighted by our farmer persona for too little water. As part of their intention to move in this direction Ofwat launched a recent consultation on an abstraction incentive mechanism for water companies, which would endorse abstracting water appropriately according to water availability and location.

Innovation is clearly needed. Ofwat believe new entrants to the market will help, along with behaviour change through water companies’ relationships with customers. New technology is also an arising challenge – with its great capabilities also comes responsibility to know how to use it and where, to its best potential.

“Challenges mean the status quo is not an option”- Stephen Beddoes, Ofwat.

Ofwat have recently launched a consultation on the regulatory framework they envision for the future water industry from 2020, which can be accessed here.

So if you’re feeling innovative and can think of an idea for the Geovation Challenge, then find out more about what we are looking for and the other problem themes and enter your ideas on the Geovation Challenge online. But don’t delay, the Challenge closes  27 January 2016 (12 noon).

Ideas identified for their potential impact will be invited to a Geovation Weekend Camp from 4-6 March 2016 at Ordnance Survey, Southampton, where you will be asked to work on transforming your idea into a prototype venture. You will also identify how to overcome problems in implementing your idea and learn to pitch your idea ‘pecha kucha’ style to the independent judging panel.  See the timetable. Those selected to be invited into a 12 month funded Geovation Programme will be announced at the end of this camp.

We are delighted to be collaborating with Environment Agency, DEFRA (whose release of thousands of open data sets coincides with the Geovation Challenge), Southern Water, and United Utilities on this Geovation Challenge.

Our challenges are open to UK-based organisations and/or UK residents aged 18 or over and we encourage entrepreneurs, developers, geographers, community groups, and innovators to enter.