The UK water industry is a large consumer of energy and emitter of carbon, much of which is associated with the electricity it uses, though it also makes significant direct emissions.
As an industry, it is also well placed to become a significant generator of renewable energy, mostly through maximising the potential of biogas generation from wastewater biosolids (sewage sludge) through anaerobic digestion.
With the Climate Change Act requiring the UK to reduce its greenhouse gas emissions by 80% by 2050, the water industry, as with the rest of the UK economy, must make a contribution.
A range of factors are critical to considering how big a contribution the industry can make to decarbonisation and how quickly this might happen.
The Chartered Institution of Water and Environmental Management (CIWEM) have published a blueprint document aimed at addressing the questions of decarbonisation and offers an analysis of where the main opportunities for carbon emissions reduction lie for the industry.
An accurate prediction of the extent and pace of decarbonisation is difficult as there is considerable variation in terms of these between companies and the pace of change will be influenced considerably by factors such as energy prices, political will and regulatory incentivisation.
In light of the evidence presented in the report, CIWEM proposes that:
- Water companies in the UK should be incentivised to make progressive carbon emissions reductions between now and 2050, aiming for 10% emissions reduction per AMP round, against an appropriate baseline. This would drive a trajectory broadly in line with achieving an 80% emissions reduction by 2050.It should be at the companies’ discretion how they would meet such a target. Earlier savings may be more cost-effective to achieve through direct efficiency, avoidance savings and offsetting from renewable energy generation, taking advantage of ‘low hanging fruit’. As these opportunities diminish and the price of renewable grid electricity becomes less, this balance may change.
- Water companies must be allowed to take on greater innovation risk – this could be achieved through a financial incentive and may take the form of not forcing water companies to demonstrate cost effectiveness within 5 years. There is a need for a longer-term perspective to investment decisions. We understand that Ofwat are willing to accept this approach and we welcome this.
- Ofwat should encourage greater investment in R&D on low-carbon solutions, including those which have a longer-term time horizon. UKWIR may be the ideal vehicle for such R&D, but there is a need for greater focus on these more strategic carbon reduction issues and how findings may be shared in the widest possible common interest.
- Ofwat and the Government should encourage and if possible, facilitate greater collaboration between water companies in the development of innovative technology to the commercial stage. UKWIR, in a modified guise, could be an appropriate vehicle for this.
- Ofwat, the Environment Agency and Defra must ensure that a balanced and proportionate approach is taken to the dichotomy between high carbon treatment solutions and local environmental regulations. There is a conflict between this kind of environmental quality legislation and the climate change mitigation implications of treating water to an ever-higher standard. A more risk-based approach including more dynamic consenting is a way to mitigate against this driver and should be promoted where outcomes would be likely to be positive.
- Building regulations must be aggressive in encouraging low water use in new developments and in the development of infrastructure which enables greater discretion between where highly treated water is required and where it is not.
- Water companies should be given a target of reducing water demand of 1 l/p/d/year for domestic supplies. For non-households this should be 3% a year.
- Greater attention should be paid to removing the regulatory barriers to widespread employment of co-digestion.
- Water companies should be actively encouraged to use their land-holdings for the optimum generation of renewables.
- Water companies should become water service providers, providing advice and assistance to their customers on both water and energy efficiency associated with water use.
- The Government, Ofwat and water companies should re-examine the appropriate timescale for smart metering for water. Given that much of the cost associated with meter installation falls in relation to the deployment of installation teams, it seems entirely counterproductive to have a widespread metering programme currently in place by many water companies, installing ‘dumb’ meters, when in 10 years’ time many of these may need to be replaced with smart meters as the water industry catches up with the energy sector.
- Externalities in the SELL analysis should be reconsidered to ensure that these better reflect the full value of water and leakage should be reduced, if necessary by setting tighter leakage targets.
- Both domestic and non-domestic customers should be encouraged and helped to reduce their water consumption through a change in conscious behaviour, rooted in a deeper understanding of the value of water. Whilst water efficient appliances and metering have a role to play, education and awareness, leading to understanding and behavioural change, will be essential in reducing the amount of water required to be put into supply.
For further information on the report and a copy of the report can be found at http://bit.ly/18li3Sa