How would nationalisation affect innovation within the water sector?
As Monday morning rolls around again and I sit here sipping my second coffee of the day. I am reminded of the conversation I had with my father-in-law over yesterday’s lazy Sunday breakfast. The conversation had changed from the previous day’s football result (Newcastle going down 0-1 to Brighton) to which was the superior sausage flavouring, Cumberland or Lincolnshire? Being a Northern boy, I had to vote Cumberland but from this silly discussion did stem something a bit more serious. We started talking about politics, I won’t get into our respective political leanings in this article but it provided food for thought as to the effect the current political climate has on our beloved Utilities sector.
*Where business is concerned I remain politically agnostic therefore please do not read any agenda into the following words.
At the recent Labour Party Conference Shadow Chancellor John McDonnell laid out plans for the re-nationalisation of the water sector. Should Labour be voted in at the next General Election they will first line up the water industry for privatisation with this acting as the blueprint for further change within the wider gas and electricity sectors. During their party conference, a report fittingly named “Clear Water” added some clarity as to their plans.
It said the regional structure of the industry would be maintained, with ownership of the existing suppliers transferred to new Regional Water Authorities (RWAs). Ofwat would also be gotten rid of under this blueprint, with a new National Water Agency responsible for regulation within the sector and the Department for Environment, Food and Rural Affairs (DEFRA) responsible for managing economic and performance standards.
It would be easy to assume that people are generally dissatisfied with the service they are receiving from their water supplier. However, it seems that the frustration felt by a lot of gas and electricity customers does not transfer over when discussing their water.
According to Water Minister Therese Coffey, 85% of water industry customers are satisfied with the service they are receiving.
Chief Exec of Water UK, Michael Roberts has been quoted as saying: “At the moment there’s a well-run water industry that’s delivering lower bills, increasing investment, and which has cut leakage by a third over the past 20 years.”
These bullish assertions and high customer satisfaction are made in spite of the fact that the UK water industry is guilty of a slow adoption of technology and innovation. During the most recent episode of my podcast Talking Utilities, Innovation Portfolio Manager Tali Harif spoke about some of the potential for innovation within the water sector. She pinpointed online bacteriological monitoring and also leak detection as two fantastic areas where technology is being used to great effect.
One such company that is leading the way with their innovative approach to leak detectionis WatchTower Robotics. Their proprietary robot works in all pipe materials, detects leaks as small as 1 gallon per minute and as accurately as 1 foot, whilst also mapping pipe networks in 3D.
During trials with water supplier Severn Trent, Dr Wu You inventor of the robot called “Lighthouse” said, "Severn Trent offered a valuable opportunity to pilot the new leak detection robot in the UK earlier this year.”
Bob Stear, deputy chief engineer at Severn Trent, said: "We hosted You and his robot earlier this year and we were very excited about its potential so we’re now looking at the best way forward.”
"We’re working closely with him on a number of initiatives, including looking at a UK-specific model, and seeing whether we can partner with other, overseas, water companies in a much-extended trial.”
Other leak-detection methods do exist in the market, but these rely on listening to sounds caused by vibrating pipes and a reduction in pressure. However, using acoustics for detection can be a problem in cities due to higher levels of noise.
Watchtower’s robot is designed to inspect pipes without interrupting the water service, and it can be put into pipes in hydrants and in three-way junctions. From there, analytics create a map that tells pipe operators where the leaks are, how large they are, and what the probability of catastrophic failure is.
Given the fact that one failure such as a burst pipe can potentially cost millions of pounds, it’s easy to see the value of a tool such as Watchtower’s Robot and they’re definitely ones to watch after trials in Saudi Arabia, The United States and the UK.
I’m happy to note that these innovative efforts are not solely located in the south of England. In a recent interview with Northumbrian Water’s Head of Strategy Martin Jackson, he shared the company's vision to become “the world's most digital water company” and with them having won the Fujitsu Digital Innovation award, it looks like they’re off to a great start.
Martin told me, “The key is looking at the outcomes that we deliver to our customers, understanding opportunities to accomplish that outcome more smartly, and then using the myriad of technologies that can help us achieve that more successfully.”
It’s worth noting that innovation doesn’t need to be confined to interactions with customers. Often looking at things to make your colleague’s lives easier brings a lot of value as well. One such example of this is British Water’s web-based system for real-time audience engagement at their latest conference. Using the platform they were able to conduct polls, gauge the mood of the audience and even submit live questions for a Q&A.
There’s no way to tell if Labour’s plans for a renationalising the water industry would be a help or a hindrance when it comes to embracing innovation. However, based on what I’ve seen in the last couple of months, I’m confident that the water industry has the support of their customers and a strong appetite to keep their utility among the front-runners of technological adoption.
Image Credit: Syd Mead
British Airways IT Meltdown - Lessons for Startups
Robert P. Mollen, Counsel at Fried, Frank, Harris, Shriver & Jacobson (London) LLP. I spent the past weekend dealing with the effects of the British Airways IT system failures (a very stressful end to an otherwise good holiday). Based ...