The water industry’s longest-serving chief executive, Wessex Water’s Colin Skellett, gives his view on how competition will open up other markets
Freeing up businesses to choose their water and sewerage supplier is a positive move in terms of making Britain’s water industry more competitive – and hopefully this Open Water initiative for England is only the start.
The most significant issues currently facing the industry, from dealing with climate change and resilience to meeting customer expectations and keeping bills down, cannot be dealt with simply by carrying on as we are. It’s vital that water companies embrace innovation to meet these challenges, and this innovation is most likely to come if markets and competition are involved.
Take climate change, for example. We’re already seeing more intense rainfall and longer dry periods so we are going to need to be innovative about how we persuade people to use less water, how we deal with leakage, as well as about water storage and water transfers.
This might involve working with farmers or landowners in different ways so they can release water in times of need or slow water through the system during periods of excessive rainfall. With Brexit and the changes that will inevitably come with leaving the Common Agricultural Policy, there is an enormous opportunity to introduce a new way of working with the farming industry and landowners.
We’ll probably see the development of multi-utility services, so instead of having different providers and bills for broadband, energy and water, customers will deal with a single company
At the moment, the country spends about £13 billion a year on environmental resilience and catchments; but how, through innovation, could this be better spent?
Initiatives like EnTrade, which involves running a reverse auction with farmers, in which they bid for how much they need to be paid to take a certain amount of nitrate out of the system, are the way forward. This preventative approach is far more cost effective than putting in expensive treatment processes to remove chemicals from supply. But innovation like this won’t come unless there are market mechanisms in place to make it happen.
So where else could competition be introduced? It is likely that trading between water companies will become more common, while at the other end of the value chain there will be more competition in the biosolids market through waste-to-energy businesses.
There’s also the question of creating a household retail market. Customers are in favour of this, but at the moment the financial benefits are marginal, in the region of about £6 to £8 a year – no one is going to switch on that basis. Instead, we’ll probably see the development of multi-utility services, so instead of having different providers and bills for broadband, energy and water, customers will deal with a single company.
However retail competition develops, it’s important the water industry does not follow the energy market; the major problem there is the clunky hand-offs between retailers and wholesalers as well as between meter readers and retailers. Companies need the right systems to ensure that the customer experience is seamless.
I think this is a challenge that can be met. And if we can get Open Water right – as Wessex Water plans to do with water2business – it’s likely to provide a terrific platform on which to build the competition and innovation that is so crucial to the future of the industry.
BEST SERVICE FOR BUSINESSES
Wessex Water and Bristol Water provide industry-leading customer service, and the retail arm they’ve formed as part of the new Open Water initiative will offer the same high standards.
water2business has promised to offer large and small businesses, schools, hospitals, charities and councils tailored water and wastewater management that will help improve efficiency and deliver savings.
Organisations that switch to water2business will benefit from consolidated billing for multi-sites – even those not in the Wessex or Bristol areas – and, through its partnership approach, firms could improve sustainability and environmental credentials.
Director of business retail Geoff Smith says: “We pride ourselves on providing first-class customer service and our priority is ensuring that customers get the best out of their water supply.
“With our huge industry knowledge we can tailor our services to individual needs and help companies become more efficient.”
For more information please visit www.water2business.co.uk or call 0345 850 0714