Project:
Unlocking Bioresource Market Growth
Stimulating the bioresources market to enable unlock greater benefits across the water sector.
This project sought to enable collaborative development of the bioresources market using a mature prescriptive analytics platform. This project aims to provide WaSCs with the support necessary to overcome existing barriers and unlock the benefits of these markets.
Project stats:
Number of partners:
Funding received:
Estimated completion date:
May 2023
Why is this project important?
This project could enable huge monetary efficiencies that could be invested more effectively in other important areas such as the environment and customers. It also encourages greater collaboration, supported by data, that could prevent siloed working and supports Ofwat’s vision to create efficiency in the biosolids treatment sector, by promoting active collaboration between WaSCs.
Context of the project
The water industry’s regulator Ofwat has established a price control for bioresources which includes collection, transport, treatment and disposal of sewage sludge and associated by-products. This aims to stimulate bioresources markets between water and sewerage companies (WaSCs) and third-party service providers. The estimated benefits from greater utilisation of these markets lie between £370-£1,390m over 30 years.
In the most recent Bioresources Market Reviews, Ofwat indicated that short-term marginal trades have limited potential to unlock the full benefits of markets. It indicated that more focus should be put into inter-company optimisation, such as the development of joint capacity, and exploiting the benefits of economies of scale.
What’s at the core of the project?
Efficiencies can be achieved by integrating the bioresource value chains of Anglian Water, Thames Water, Northumbrian Water and Southern Water (equivalent to circa 50% of the total sludge production for England and Wales), into a single decision support platform.
A tool will be developed to enable WaSCs to utilise alternative, collaborative business planning approaches to displace capital investments, support net zero goals and increase the resilience of the overall bioresources operations.
By integrating bioresources networks, this project will enable WaSCs to overcome critical barriers to trading. These include the different pricing of activities and limited visibility of other WaSCs’ strategy, challenges and site-specific constraints. By providing WaSCs with a shared strategic 25-year view, the platform enables collaboration through identifying market opportunities.
By involving five UK WaSCs in this project, the outcome is expected to positively impact around 50% of the population in England and Wales.
Important strategic outcomes:
Outcome 1:
Create a level playing field for biosolids activities to identify opportunities for collaboration across multiple WaSCs.
Outcome 3:
Identify opportunities to offset investment by sharing existing or new capacity across multiple WaSCs.
Outcome 5:
Identify opportunities to rationalise sites across borders to decrease Industrial Emission Directive compliance costs.
Outcome 7:
Quantify the potential to mitigate operational carbon emission and support the industry journey to Net Zero.
Outcome 9:
Stimulation of one or more fixed term trading agreements between WaSCs and/or third parties.
Outcome 11:
Create and demonstrate the benefit of new adaptive planning capabilities within water companies, enabling rapid, systemic scenario analysis.
Outcome 2:
Identify opportunities for shared investments, to improve logistics and treatment and/or manage outlets.
Outcome 4:
Identify opportunities to reduce overall expenditure.
Outcome 6:
Identify opportunities to decrease operational expenditure through different operational plans and through the utilisation of exiting headroom.
Outcome 8:
Demonstrate how resilience can be improved by taking a systemic approach to planning.
Outcome 10:
Provide a test bed for regulators, task forces and specialist working groups to test and quantify the impact of regulation before it is implemented.