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BT’s Water Journey: An Interview with Matthew Power, Utilities Commercial Specialist

 960 640 Stuart O'Brien
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In the latest instalment of our industry executive interview series, we spoke to Matthew Power (pictured, below), Utilities Commercial Specialist at BT, about his company’s water needs and how the organisation is working with Waterscan to transform its management and usage…

Matthew, tell us about BT’s experience of water before the market opened. We have a large property portfolio but individually our sites tend not to use much water. Many unmanned sites have only welfare facilities that are used occasionally. From a management perspective, the nature of such a property portfolio has caused a few issues. For example, it has meant that many meters were not being read regularly so our ability to manage leakage and accruals for water charges was limited. Also, the sheer quantity of supplies and regional water suppliers we were dealing with meant that we were processing huge numbers of paper bills – a manual and very time-consuming administrative process.

So, how did BT approach the open water market? What were you looking to achieve? Initially we tendered for a single retailer so that we could reduce the administrative burden of multiple suppliers and paper billing and to try to ensure more regular meter reads. However, we were very surprised to receive no bids from the invited retailers, so we started to look at other options. 

We had worked with Waterscan for a long time on various projects and saw how the team there were partnering with other large organisations to self-supply and began to realise that this route could potentially solve many of our issues too. The opportunities arising from becoming a market participant and helping to shape the water market’s development as a self-supplier also appealed to us.

What has been achieved since? We received our licence at the end of 2018 and began switching our supply points over in a staged programme organised by their team from the following June. To date, 6,513 supply points have been successfully switched, with just a handful remaining. We have automated a lot of the payment processes now too, and this is saving us significant administrative costs. The tangible benefits of this approach have been such that we decided to move our EE portfolio over to this model too and these supply points are currently in transition.

One of our greatest achievements is that the vast majority of our water meters have now been located, verified and read, which means that we have accurate benchmark consumption data on which we can base future strategic decisions. The industry terms a ‘long-unread meter’ as one that has not been read for a year or more and we have reduced BT’s level from 25% to 5% of our meters. I understand that no-one else in the water market has achieved such a feat. In fact, our large number of supply points means that BT is equivalent to a large retailer in the market and we’re currently outperforming all these – unexpected, but really pleasing!

Why are long-unread meters such a problem? For us, being a good water steward means we need good data to manage our usage. If meters are not being read regularly and accurately, this reduces our ability to spot leakages, ultimately increasing our burden on the water networks and wasting resources. What’s more, when leaks are detected, a large catch-up bill that we have not accounted for tends to follow and this makes controlling our water spend much harder.

As a result of our improved water consumption data, we have already identified and repaired a number of large underground leaks and we have also been able to start assessing the consumption impact of a planned roll-out of new cooling systems that use mains water.

Self-supply has been a successful strategy for other companies too: why do you think this is? As mentioned, self-supply puts you in control of your meter reads, but it also gives you access to central market data which means a greater ability to monitor and manage usage and ensure accurate charges. Through our MOSL membership and having more direct contact with Ofwat and other market participants through the Self-Supply Users Forum, we also now have a broader understanding of the challenges the market faces and how these could impact our own operations. This gives us an unparalleled opportunity to plan for, and mitigate, these risks. 

What is BT’s next set of priorities and how will these be achieved? While BT is not a particularly large water user, we do have systems installed at many sites that rely on mains water, particularly in hot weather, so good water stewardship is particularly important to us. 

We are keen to look more specifically at our sites in water-stressed catchment areas so we can help resilience efforts and review contingency plans for sites that are at the highest risk of a water outage. Good data and automation of processes are key for us to achieve this.

From a wider perspective, we are extremely interested to see how the water market develops. Where we can exert our influence to ensure that it continues to improve for customers, we are keen to do so. 

Having achieved so much in such a short space of time, what lessons can other organisations learn from BT’s approach to the water market? Based on our experience, I expect that most large organisations should be able to realise benefits from engaging with the water market and I would advise them to investigate all the options available. For us, partnering with Waterscan to self-supply proved to be the optimal solution to help us manage our water usage and spend and, because we now have complete control, the journey to date has already delivered benefits that we hadn’t anticipated.

www.waterscan.com

Coping with COVID-19: Waterscan’s Claire Yeates anticipates the long-term impacts for the water sector

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By Claire Yeates, Waterscan

A great deal of good will come from all this. Yes, yes, I know it is an easy thing for an optimist like me to say but I honestly believe it, having attended many day-long, socially distanced, virtual industry meetings over the last couple of months. That is not to say that it will not be difficult: there are obstacles to overcome in all battles and the collective fight against coronavirus in which we are all currently engaged is no different. 

But here is my take on why the water sector will be a better place once we emerge from current trading conditions.

First and foremost, industry regulator Ofwat and market operator MOSL have not deviated from their unified mission to ensure that the customer is paramount. Protecting customers’ interests is absolutely top priority at this time and they have been working at an unprecedented pace and scale to ensure that no-one is left unsupplied or unsupported in difficult times. Whilst this is an unwavering permanent objective, it is their sheer ‘sleeves rolled-up’, can-do attitude that has enabled many measures to be tabled, consulted upon, and implemented in short timeframes, and of course, without face-to-face contact. This flexible, pragmatic, contemporary approach could continue in a bid to speed up performance improvement in the future. 

And here is another positive theme: we are seeing higher levels of collaboration and engagement than ever before. When the self-supply community met for its Spring forum recently, both Ofwat and MOSL thanked attendees for their efficient responses to numerous calls for information to guide decision-making. Long may this level of customer engagement continue.

All of us working in the sustainability arena will be pleased with the positive environmental impacts that have been reported around the world. Emissions of carbon monoxide have fallen by around 50% in New York. Wild kangaroos have been hopping around downtown Adelaide. Venetian canals are clearer than many can remember, and a drop in air pollution has enabled citizens in India to see the Himalayas for the first time in their lives. Is it possible that these wonderful impacts become ‘light-bulb’ moments for the masses: a collective awakening to the possibilities that sustainable, low carbon economies can offer? We can hope. 

So far so good. I mentioned earlier, however, that there would be casualties in the water sector (just as there will be in many others). Several trading parties have been complaining that they are in firefighting mode and have reduced their service levels accordingly, others claim that they are already in need of monetary support to weather the anticipated financial fall-out. 

To me, this raises some really important questions around business continuity: how is it that some trading parties have been operating at the very outer limits of resilience? What we are seeing are weaknesses being exposed: a lack of business continuity planning, inadequate resourcing, an inability to service customers effectively by maintaining data provision and, in some cases, abuse of the very measures that have been put in place to secure their future… it’s not a pretty picture. 

But, is it a bad thing? A competitive market, by definition, is based on the principle of survival of the fittest. If a business is poorly managed, it does not deserve to survive and thrive. The water market could be more sustainable, trusted, and stronger as a whole if all of its constituent elements were run to a consistently high ethical standard.

My biggest concern about the whole situation is that some collaborative work that had begun to drive real change has been halted. As I write, the focus is necessarily on essential work around water supply and the treatment of wastewater. Added value services have largely fallen by the wayside.

In practical terms then, what are the likely longer-term ramifications of all this for commercial water users? 

Market rationalisation through some trading parties going out of business? 

Probably. While Ofwat is working hard to help everyone survive, it is surely inevitable that some businesses in a competitive marketplace will fail. With this in mind, the regulator is absolutely right to keep its focus firmly on the end-customer. 

Higher prices to level-out profit margins? 

There will certainly be a hole that needs filling to shareholder satisfaction. However, I would hope the shortfall will be delivered through efficiencies and innovation and I am confident that any price increases , if required, will be kept proportionate so long as the measures put in place by Ofwat and MOSL are not abused and problems exacerbated.

Greater competition to maintain or regain market share? 

Likely. It is unfortunate that the water retailers that are most at risk of failure are those smaller companies because these tend to be where enhanced services and innovation lie. Regardless of business size though, all suppliers will have to up their game when it comes to customer service and invest in modernisation and improvement programmes to grow market share. 

Administration burden, dealing with a major meter reading and billing backlog? 

Definitely – and this is really unfortunate because it is so unnecessary, especially considering that enabling customers to maintain visibility of their consumption and continue to process payments positively impacts market liquidity. Many thousands of water meters are located where they can be read safely in accordance with social distancing guidelines. I would urge large water users to prioritise the rollout of AMR and data systems in their operations to further alleviate this issue.

Better business continuity planning and higher levels of transparency?

Possible – but this is one thing that really should come out of our experience of Covid-19. 

Amid the chaos of coping with Covid-19 in the short term, I am confident that the market will emerge leaner, stronger, and performing better than ever before as key learnings are highlighted. Just you wait and see… 

www.waterscan.com

Coronavirus: Impact of the 20 second rule on water consumption

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By Barry Millar, Operations Director, Waterscan

Last summer, DEFRA launched a wide-ranging public consultation on how the UK could better manage its water consumption in response to the Environment Agency’s grim prediction that we are likely to run out of water by 2050. This consultation offered up a range of proposals for improving water efficiency at individual, local and business levels. One such idea was to set a legal limit on per capita water consumption. 

Less than a year on, the idea that such a measure could be introduced anytime soon has all but vanished amid government guidance for us all to wash our hands more, and for longer, in the fight against COVID-19. While the medical rationale behind this public health guidance is clear, there have been media reports querying the mid to long term environmental impacts of all this additional scrubbing – and it’s a question that some of our clients have been asking too. 

I looked at the data to determine just how big an issue all this additional water use might be.

At home, around 68% of our water use – 96 litres per person per day (lppd) – takes place in the bathroom, with handwashing liable for up to 10 lppd under normal conditions with modern Part G compliant taps. 

Moving to a scenario where each person washes their hands for 20 seconds, roughly 10 times each day, I would expect there to be a net difference of around 10 lppd. Scaled up to a population of 60 million, we’re looking at an additional demand on the water networks of 600 Megalitres per day (Mpd). 

Now, whilst that is not an insignificant amount of water, neither is it catastrophic: it amounts to a little over a 0.5% increase on national consumption. (Compare this, for example, with summertime daily demand which spikes by as much as 25% in some areas of the UK.) Furthermore, much of this increase is likely to be offset by social isolation where, within private households, sanitation would decrease in line with external exposure. A reduction in economic output will further alleviate the impact in the short term.

At the moment then, a nationwide increase of 600 megalitres isn’t cause for concern. But – should this situation extend throughout the summer when we usually experience an inadequate replenishment of resources – the situation might look quite different. It might well even be the tipping point for some water companies in water-stressed areas. 

The bigger picture is that we have a current supply capacity of around 15,000 Mpd day in the UK. The Environment Agency forecasts that this needs to increase by an extra 4,000 Mpd to avoid the risk of interruptions to water supply. 

Boosting supplies alone isn’t enough to secure our water future though: a reduction per capita must also be realised. Per capita consumption in the UK sits at around 141 lppd, with a target reduction of 16% to 118 lppd. The situation we currently find ourselves in then should, at the very least, be considered a real setback in the strive to force per capita consumption downwards to sustainable levels. 

So, how can we balance the 20 second rule, necessary for short term public health, with the 16% consumption reduction required to secure our long-term water supply stability?

It all comes down to making the best of a bad situation by managing assets well and monitoring consumption closely – and this goes for individuals, public sector environments and commercial premises. 

Many meter reading programmes are on hold as I write but it is important to keep an eye on consumption to notice any unusual consumption spikes (or in the case of commercial premises, any recorded water use at all, if a building is unoccupied) as this will almost certainly point to faulty pipework or taps causing leakage. Although an unwanted situation, it presents a fantastic opportunity to monitor premises that are rarely vacant. Anyone with automated meter reading (AMR) technology is well placed to do this essential monitoring which can of course be done remotely and therefore safely. 

It’s also a good time to take stock of essential network assets. Even taps can be an unnecessary drain on resources and cashflow. Older taps often have highly wasteful flowrates of as much as 10 litres per minute, compared to newer taps delivering 2-6. Carrying out replacement works now, or at least factoring this into future workflows, will have a positive effect in the longer term, especially for businesses operating in the hospitality and leisure sectors. 

These statistics in this piece relate to personal use in the home as opposed to commercial use and it’s extremely difficult to draw parallels to create a picture for the likely business impact due to the vast variables in commercial use (compare a manufacturing operation, hotel or hospital to a small office set-up for example). But the same principles apply. 

The drive towards water sustainability is just one of many corporate social responsibility priorities that will undoubtedly be put on hold in these unprecedented times and certainly, we would not advocate any move to limit handwashing to counter this impact. However, there is no time like the present to use this time to plan ahead. Managing and analysing our water consumption a little more is one way that we can all play a role in mitigating the future impacts of our activities right now. 

5 Minutes With… Nathan Morgan, Commercial Services Manager at Waterscan

 960 640 Stuart O'Brien
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The Energy Briefing team recently sat down with Waterscan Commercial Services Manager Nathan Morgan to find out more about his company, industry challenges and market opportunities…

Tell us about your company, products and services

Waterscan is an independent consultancy wholly focused on helping clients push the boundaries of sustainable water management. We provide practical and technical support from creating full water strategies to helping them make better water purchasing decisions in a recently deregulated marketplace. 

What have been the biggest challenges the water sector has faced over the past 12 months?

It has been nearly three years since the non-residential water market across England and Wales became a competitive marketplace. This ‘open market’ introduced customer choice for the first time and it’s been good to see change happening and innovation occurring. 

However, I think all involved parties would like it to happen faster. The development of the market is being impeded by poor data quality, anti-competitive behaviour and inconsistency across the marketplace. This is because we currently have dispersed systems, divergent processes and some market codes that are open to interpretation. This situation enables wholesalers to implement different solutions. This gives rise to a non-standard customer experience which is still driven by geographical location rather than the high quality, standardised single market experience that we’re striving for. 

And what have been the biggest opportunities?

Self-supply, without a doubt. Customers that are choosing to self-supply their water are the highest performing trading party in the open water market, according to official Ofwat data. There are nine active self-suppliers to date across a wide variety of industrial sectors including, for example, Whitbread, Coca Cola European Partners, Kellogg’s, John Lewis and BT. This self-supply community is outpacing the rest because it is customer-led. These businesses have ownership of their own market performance and are motivated to deliver the best outcome that they can for themselves. 

What is the biggest priority for the water industry in 2020?

Tacking long-unread meters (those that have not been read for 12 months or more). These are a huge issue across the water marketplace because, without accurate consumption readings, there can’t be accurate customer billing. 

The self-supply community is driving change and signalling to other trading parties just what can be done on this. Our work with BT is a great example. BT has reduced its long-unread meters by 88% in less than a year and, with more than 5,000 supply points, this demonstrates what is achievable across a sizeable estate.

What are the main trends you are expecting to see in the market in 2020?

I expect to see water’s leading ladies – Rachel Fletcher and Sarah McMath, the Chief Executives of Ofwat and MOSL respectively – getting strict with any parties that are impeding progress towards an efficient open market. They’ve already been sending strong signals that they will no longer accept poor performance and reluctant relationship building – from any market participant. 

What technology is going to have the biggest impact on the market this year?

Fast-tracking the planned industry bilateral hub will solve many of the issues around data, efficiency and the customer experience, leading to a more effective market.

In 2025 we’ll all be talking about…?

I would like to see the introduction of further competition when it comes to the supply of water and wastewater services; for example, in meter operations and in waste collection and treatment facilities. A centralised, digital marketplace to allow third parties to introduce new products and services to companies operating in the market would also fuel further innovation. 

What’s the most surprising thing you’ve learnt about the water sector?

From my experience of attending the Self-Supply Users Forums, it’s interesting that control has proved to be a more important driver for customers over price. Through initiatives like the Self-Supply Users Forum, self-suppliers have gained a strong and clear understanding of the market which enables them to make decisions and take positive actions that support their operational and sustainability goals. This level of control has proved to be an incredibly important factor.

What’s the most exciting thing about your job?

Realising the benefits of innovating. Seeing customers who have chosen to take the leap into unchartered waters and self-supply achieve great things. They have transparent data on which to make effective business decisions. Many are achieving consumption savings that go beyond initial expectations. For those organisations with a complex property portfolio, there are tangible administrative efficiencies too. 

And what’s the most challenging?

A key challenge is that there’s a general apathy around the open water market. Unlike when the gas and electricity markets opened, awareness of the opportunity to renegotiate and switch water suppliers – currently around 50% of eligible businesses – is not high enough and few feel the need to act.

Part of the reason for this is that water is rarely part of the conversation when it comes to sustainability. We talk a great deal about the impact of carbon, plastics and the food chain but not about the impact of water inefficiency and that’s a real problem. The Environment Agency predicts that water demand (which is going up due to population growth and business development) will exceed water availability (which is going down due to climate change and aging infrastructure) in the UK within twenty years. At this tipping point, when water starts to become a scarce commodity, businesses will start to prioritise water. My challenge is to get them thinking about water long before this. 

www.waterscan.com