Waste Water & Sewage Treatment Expo 2017

Lloyd Martin, CEO, British Water

Chairman’s introduction

6 July 2017

• Graham Southall, Owner & Director, V2B Consulting• Matt Cuchra, Partner, KPMG

The importance of ongoing investment in the wastewater sector to guarantee service quality and ongoing improvement

Lee Horrocks, LCH Executive, British Water

AMP7 Procurement Strategies – How do SME’s move “UP” the Water Sector Value Chain?

AMP7 Procurement StrategiesHow do SME’s move “UP” the Water Sector

Value Chain?

Content

Who am I? My Sector Credibility…AMP6-Where are SME’s in the Sector?

Setting the Context…AMP7-Where the Sector needs SME’s to

Impact?What SME’s should be doing?

What “HELP” is available to SME’s?To Summarise…

Questions…

Who am I? – My Sector

Credibility…

Career highlights... .Clients worked for & with….

Lee Horrocks – MBA, BSC MechE, CEng, FIWEM

“Helping SME’s in the Infrastructure & Water Sectors”

. . .you provide the capability & capacity that makes the sector successful. BUT…

…whilst you are the foundation of the sector to date you have had the least influence and lowest returns…..

AMP6 -Where are SME’s in the

Sector?Influence Revenue

Innovation

Profit Manpower

Technology

Setting the Context. . .is the Regulator

saying?

...are the PLC’s saying?

“…I absolutely encourage the water companies to look to

get the sector Tier 2’s and SME

suppliers further up the value chain in

the delivery of AMP7…”

“…the Tier 2 and 3 suppliers bring the majority

of the innovation to the sector its essential we get more innovation into the

sector in AMP7. Therefore we must involve the supply

chain much more in our AMP7 delivery teams…”

Catherine Ross. CEO - OFWAT.Key note speech at the British Water Annual lunch June 2017…

Chris Loughlin. CEO - Pennon. Speaking on behalf of Water UK…

. . .is the Supply Chain saying? “…the supply chain

contributes substantially to the capability & capacity in the sector. However to date

this has not been truly recognised in terms of

status, influence, reward or contribution to innovation…”

Lloyd Martin. CEO - British Water. Speaking as the leading supply chain trade body in the water sector…“What…….

What SME’s should

be doing?

Research & develop a focused STRATEGY & PLAN

Select appropriate CLIENT[S]Identify appropriate PARTNER[S]

Be realistic about your CAPABILITY & CAPACITY

Decide on your AMP 7 RISK appetite?What will the risk profile be?

Is it real risk?Do you truly want to move up the value chain?

Pro-Actively talk to target client[s] & partner[s]. MARKET yourself and your contribution to

AMP 7At a higher level – Where the door is open!

About the innovation you have already deliveredAbout what innovation is coming – BE BOLD

About what savings can be realised – BE VERY BOLDAbout what are you TRULY looking for in AMP 7

Recognition?Appropriate Influence?

Fair & Reasonable reward for your contributions?Other?

“HELP” is available to SME’s?From the;

SUPPLY CHAIN Associations. They know the sector and a lot of the key

people in it…

From the;WATER PLC’s Association. Its board has the CEO’s on it who are driving the need for Innovation from the

SME’s

From the;TIER 1 Contractor & Consultants Association’s. Who are recognising

that to WIN they MUST include SME’s in their AMP 7 teams…

From individuals & consultants who want the SME’s to achieve the success they deserve...

To Summarise…YOU the Supply Chain are the FOUNDATION of the sector…

To date your contribution has been UNDERVALUED….….to an extent you have LET it be that way

AMP 7 will be the catalyst for changeThe sector masters are driving that CHANGE

You have a REAL opportunity to realise much more than beforeYou should PLAN your strategy NOW

Be REALISTIC & PRAGMATIC [there is enough work for us all]You have a short window to BE SEEN to want to step up

HELP is available you only have to ASK

…and REMEMBER…

LCH Executive Ltd“Helping SME’s in the Infrastructure & Water

Sectors”

[email protected]

07817 268621

AMP7 Procurement StrategiesHow do SME’s move “UP” the Water Sector Value Chain?

Questions…….?

• Izabela Kasak, Energy Optimisation Engineer, Anglian Water• Dr Abraham Negaresh, Senior Process Engineer, WRC• Lorenzo Menin, Engineer, WRC

Maximising water reuse and acknowledging the role of treated wastewater reuse as an alternative source of water supply

• Prof Bruce Jefferson, Professor of Water Engineering, Cranfield Water Science Institute• Dr Cesar Mota, Professor Adjunto, Universidade Federal de Minas Gerais, Brazil• Dr Kees Roest, Senior Scientific Researcher, KWR Watercycle Research Institute• Chris Woods, Head of Food & Beverage, Nijhuis H2OK

Evaluating the benefits of technology and innovation for both the water industry and its customers

www.cranfield.ac.uk

Sewage works of the futureEnsuring the innovation and evolution is

customer centricIncorporating new approaches to waste water

management and sewage treatmentBiogas production from wastewater treatment

Is it time to rethink our approach

Wastewater IN

Treated Water Out

Sewage works

Energy IN

GHG out

Sludge out

Chemicals IN

750,000 tonnes per year(0.1% recycled)

Per ML:634 kWh

(2-3% of UK)

406 kgCO2e

(5% of CH4)

An effluent factory

Adsorb nutrient and recover

Increase total energy from sludge with

thermal processesSludge imports(not required)

AnMBR

Thermal treatment

degasScreen Reactive media

CO2

Regenerant

Fertliser

Grit recovery

BiostruviteAmmoniaorganic recovery

Maximise recovery from the liquor line. Avoid

return load.

Maximise production of new biorecovery (bioplastics etc..)

Grit removal to protect high tech downstream

and recover grit

But what about small / rural works

A small works / rural works: fit and forget

Aerobic wetlandair

Anaerobic PondPart of wetland fitted

with reactive media if P consent required

Part of wetland fitted with reactive media if P

consent required

Gas compressed or boiler for heat

generation

Gas compressed or boiler for heat

generation

De sludge every 7-10 years

De sludge every 7-10 years

Generate community involvement:

societal/ecosystem benefits.

Generate community involvement:

societal/ecosystem benefits.

A sketch of a new flowsheet for Australia

Analyse flowsheets to define core attributes.

Define the core attributes to refine and shape future technology

But what do people actually value and want.

www.cranfield.ac.uk

T: +44 (0)1234 750111

Thank you for your attention

Matt Cuchra, Partner, KPMG

Deregulating the water market and developing a competitive marketplace

Siobhan Kennedy-Hall, Business Development Manager, water2business

Examining commercial opportunities within the non-regulated sector

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Siobhan Kennedy-Hall – Business Development Manager water2business

Challenges and OpportunitiesA Retailer’s Perspective

6th July 2017

Author: Siobhan Kennedy-Hall – Business Development Manager

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• Following the opening of the water market, companies are having to work together in new and

untested ways.

• How should we be operating in this marketplace?

• Wholesalers have a whole new set of customers – retailers, and as well as working hard to ensure

they offer a level playing field to new entrants, they must meet retailers’ expectations and provide

the service necessary to ensure end customers don’t suffer from the change.

• What do retailers want from wholesalers ?

• How well placed are wholesalers to deliver?

• The role of third party intermediaries

I’m excited to be part of this expert panel will explore the challenges and opportunities presented by

the opening of the water market.

What are we here to debate…

Todays Subject Matter

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A Wessex Water and Bristol Water Company creating innovative, tailored

water management packages for business customers throughout

England and Scotland

Who are we...

water2business

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What were the key drivers…

The Retail Market

Encourage innovation

Improve water efficiency

Drive down pricing

Improve customer service

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How should retailers do it?

“Do what you do so well that they will want to see it again and bring their friends”Walt Disney

Iconic America businessman

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Consistently Good Service

InnovationCustomer

Expectations

What should the market deliver ?This is what our customers say…

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• Uniformity – Can we have a common approach

from wholesalers…

• Tariffs and pricing

• Methods of communications and interactions

• Service Level agreements and performance

• Service offerings

What do we want from Wholesalers? Here’s our wish list for you...

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How well placed are wholesalers to deliver?A snapshot from our experience..

• It’s a mixed bag !

• We’ve received various levels of service

• Lack of uniformity makes being a retailer operating

nationally complex and leads to confusion for

customers

• Its not all doom and gloom…most wholesalers are

pragmatic, responsive and are adapting to the

demands of the new markets

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What will make the new market work

What will make the new market work

Customers are confident

Customers benefit from lower prices and/or better service

It’s easy for companies to join and leave the market

There is a simple and efficient switching process

There is limited or no anti-competitive behaviour

There is limited or no mis-selling Trust

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Where do they fit in?…

The role of third party intermediaries

• The good, the bad, the evil…..

• Knowledge

• Understanding

• Attitude

• SMEs

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Measure performance to drive improvement…

Service Level Agreements (SLAs)

• SLAs monitored by MOSL and Ofwat

• Monthly performance reports available for peer

comparison

• How do we measure the performance of 3rd Parties?

• There is nothing currently in place

Its not clear whether existing SLAs and KPIs benefit

the customer and this need to be the focus

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Our Promise

Sustainability Savings

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Thank you

• Stephen Riches, Asset Planning Manager (Biosolids), Anglian Water Services• Steve Bungay, Owner & Director, Helix ECL• Matt Taylor, Organics Technical Manager, Aqua Enviro

Increased competition in upstream sewage and sludge markets

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Steve BungayTechnical Director – Helix ECL

Understanding the Challenges and Opportunities

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England, are reviewing the regulatory framework for sludge

• They are promoting free markets between the water companies and commercial sector treating biowaste

• Ofwat have identified that sewage sludge, is a resource, with substantial scope for market development

• Currently, the water industry is highly regulated

Sludge Deregulation

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Economic Regulation• The UK water supply is overseen by independent water regulators in

England and Wales, Scotland and Northern Ireland

- These regulators ensure that water companies consider the needs and interests of consumers in their work, whilst maintaining efficient and economically sustainable practice

- The economic regulators for the UK water sector are England and Wales – Ofwat Northern Ireland – The Utility Regulator Scotland – Water Industry Commission Scotland (WICS)

- The regulators in the UK are responsible for settling limits on pricing and protecting customers interests, encouraging competition and investment within the industry, and administering the licensing regime for water and sewerage companies as set out in the Water Services Act (1991)

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Environmental Regulation• Water companies in the UK are committed to protecting our

environment

- The UK water sector works closely with the regulators to ensure the continued delivery of environmental benefits

- The environmental regulators that the water sector works with are

England – DEFRA and the Environment Agency Northern Ireland – Department for Agriculture Environment

and Rural Affairs (DAERA) Scotland – Scottish Environment Protection Agency Wales – Natural Resources Wales

- The regulators in the UK are committed to supporting our environment by regulating water quality and protecting public health, whilst working with the water sector to help support the industry

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Regulations – the beginning

• The Rivers Pollution Prevention Act (1876)- Part 1

Law as to Solid MatterProhibition as to putting solid matters into streams

- Part 2Law as to Sewage PollutionProhibition as to drainage into streams of sewers

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86/278/EEC)

European Union Law

Post-War Regulations for Sludge

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Regulations (1989)

UK Statutory Instrument

Current Regulations for Sludge

• The Environmental Permitting Regulations (2010)

UK Statutory Instrument

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Assurance SchemesCommercial Operators

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1 2 3 4BiomethaneElectricityBiosolids

Sewage

WastewaterTreatment

Works

SludgeThickening

Site

SludgeTreatment

Centre

including Anaerobic Digestion

Biogas

Sludge Thickened Sludge

Digester Feed

Sludge Deregulation

Deregulation in Practice

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Water Company Asset Utilisation

Deregulation in Practice

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1

1

1

1

2

2

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4

Sewage

Sewage

Sewage

Sewage

WwTW STS STC Digester


BiomethaneElectricityBiosolids

Biogas

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i1

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j2

j3

j4

j5

o1

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Sewage

Sewage

Sewage

Sewage

WwTW STS

c1

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c3

STC Digester

+1 +1

Multi-layer Back Propagated Neural Network



Biogas

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Cross Boundary Trading

Deregulation – Scenario 1

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Sewage SludgeAD Plants

Sewage Sludge & Commercial

AD Plants

AD M

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Ass

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www

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map


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i1

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+1 +1Sewage

Sewage

Sewage

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WwTW STS

c1

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STC Digester

i5Sludge


Additional input to the system


Biogas

+1

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Separated Sludge Business


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Sewage

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WwTW STS

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Biogas

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Sewage

Sewage

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WwTW STS

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STC Digester

Sludge

Sludge

Sludge

+1

Sludge i4 Optimisation links are broken



Biogas

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Deregulation in Practice• Scenario 1 - Cross Boundary Trading

- Easy to implement- Easy to optimise

• Scenario 2 - Separated Sludge Trading- Optimisation links are broken- Will not provide cost savings for customers- Will provide the water companies with the opportunity to divert

profits into the non-regulated “sludge” business• Scenario 3 - Cross Sector Trading

- Does deregulation open up the market between the water companies and the commercial sector?

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Cross Sector Trading


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Cross Sector Trading• Water Companies

- The Sludge Use in Agriculture Regulations (1989)- Safe Sludge Matrix- Biosolids Assurance Scheme

• Water Company Exemptions (giving commercial advantages)- S3 Storing Sludge- T21 Recover waste at a waste water treatment works- U10 Spreading waste to benefit agricultural land

• Commercial Operators- The Environmental Permitting Regulations (2010)- PAS110

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• Plants (2015) shown by electricity/CHP, heat only, and biomethane

Commercial Sector Operational Plants

Capacity

Electricity/CHP plants 215 210 MWe

Heat-only plants 6 0.1 MWth

Biomethane plants 25 17,266 m3/hr

Water Sector Operational Plants

Capacity

Sewage electricity plants 155 177 MWe

Biomethane sewage plants 4 4,200 m3/hr

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Cross Sector Operation

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Digester Sector ElectricityPlants

BiomethanePlants

Operational Planning Operational Planning

Sewage Sludge 159 0 9 0

Agricultural 235 276 59 36

Industrial 35 23 7 3

Commercial 79 78 15 9

• Anaerobic Digestion in the UK (2017)

- With the uptake of various financial incentives, there are now more commercial digesters than sewage sludge digesters

AD M

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Cross Sector Operation

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Opportunities• Deregulation presents opportunities and challenges to the

water industry

- Integrating skills from the water companies and the commercial sector, and, using pragmatic regulation will realise the greatest potential from a deregulated sludge market

- Cross boundary trading offers the potential to optimise the utilisation, reuse, and recovery of sewage sludge

- However, separating sludge from sewage reduces the efficiency in which they are treated holistically

- In addition to this, disparate regulations disincentivise the engagement from the commercial sector

• Overall the opportunities are limited

- Cross Boundary Trading is the only real opportunity that could offer savings to customers

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Challenges• Deregulation presents both economic and environmental

challenges

- Economic deregulation of sludge requires regulatory change to promote free markets between the water companies and commercial sector treating biowaste

- There could an opportunity to consolidate and simplify the existing regulatory framework

BAS v PAS110(Currently the commercial sector operates at a financial disadvantage to

the water companies)• Economic deregulation must NOT undo the environmental

improvements that have been implemented since the 1950’s• Reportedly, privatisation has cost customers £2.3

billion/year more than it would have if water had remained in public ownership

(Financial Times, Water Briefing, Utility Week, University of Greenwich)

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Conclusions• Cross boundary trading

- Offers the possibility of local efficiencies and optimisation• Separated Sludge Business

- Will reduce the efficiency of the overall treatment process- Prevent economic savings from optimisation of the overall

treatment process- Facilitate the transfer of “customer savings” to the non-regulated

business• Cross Sector Trading

- Due to the disparity in the cost of complying with environmental regulations, there is no incentive for the commercial sector to enter the water company sector

• Ultimately, deregulating the sludge market is NOT likely to offer savings to the water company customers

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Consulting Process Scientists & Engineers

Steve Bungay – Technical [email protected]

www.helixecl.co.uk

6th July 2017

Increased competition in sludge markets – what difference will it

make?Matt Taylor

Organics Technical Manager

Aqua Enviro is a specialist environmental consultancy, conference organiser and training provider in the water, wastewater, bioresources and organic waste sectors.

Suez Water UK

Water 2020

• OFWAT aims to promote a market for trading sludge

• Specifically this means:• Companies can trade with each other and

use processing centres in adjacent company areas to improve efficiency

• More efficient investment to make the most of sludge processing across company boundaries

• Better interaction and integration with the wider organic waste market

Legislative and non-legislative controls• 1986 EU Directive on Sludge Use in Agriculture• 1989 Sludge (Use in Agriculture) Regulations• 2010 Environmental Permitting regulations (plus Scotland, NI, etc.)• BSI PAS110:2014• AD Quality Protocol (SEPA Position Statement)• EA/SEPA/NRW/NIEA Position Statements on non-waste digestion• Animal By-products Regulations• 1996 Code of Practice for Agricultural Use of Sewage Sludge• Water industry HACCP guidelines• Safe Sludge Matrix• Biosolids Nutrient Management Matrix• Plus various others:

• Codes of Good Agricultural Practice• Groundwater source protection zones• The Nitrate Pollution Prevention Regulations• S3 exemption (field storage)• Etc…

WastesWastes

SludgeSludge

YesYes

YesYes

Input materialAD process regulated?

Digestate regulated?

NoNo

YesYesManuresManures

Purpose-grown crops or Crop by-products

Purpose-grown crops or Crop by-products

NoNo

YesYes

YesYes

NoNo

WastesWastes

SludgeSludge

Bespoke permitBespoke permit

Urban wastewater treatment directiveUrban wastewater treatment directive

Input materialAD process regulated?

Digestate regulated?

Standard rules permitStandard rules permit

Exemption from permitting


Sludge and wasteSludge and waste Bespoke permitBespoke permit SR 2010 No. 4SR 2010 No. 4EoWEoW

Bespoke permitBespoke permit

Standard rules permitStandard rules permit



Sludge Use in Agriculture RegsSludge Use in

Agriculture Regs

All AD plants in the UK

Taken from: http://adbioresources.org/map

All AD plants in the UK – excluding sludge digesters


All AD plants in the UK – excluding sludge and industrial digesters


All AD plants in the UK – excluding sludge, industrial and agricultural digesters


Opportunities

• Cross boundary trading can increase efficiency

• Utilising spare digester volumes to cost effectively increase recycling

• Share skills/expertise between waste and water sector

• Harmonised environmental regulations

• Create a level playing field

Challenges• Not being anti-competitive• Not losing benefits of integrated treatment process (sludge and

wastewater)• Maintain/improve environmental protection• Technical differences (e.g. contaminants and material properties)• Cost/profit share in regulated/non-regulated business

• Feedstock availability

• Gate fees

• Recycling targets (E, S &W)

Thank [email protected]

07833 463711

Chris Woods, Head of Food & Beverage, Nijhuis H2OK

A world tour of Key Industrial Market Trends

Dr Kees Roest, Senior Scientific Researcher, KWR Watercycle Research Institute

Local water and energy solutions - Showcase Cleantech Playground at De Ceuvel in Amsterdam, The Netherlands

Lloyd Martin, CEO, British Water

Chairman’s closing remarks

End of Conference