The challenges of AMP7 are shaping the future of the water sector as AMP8 approaches, says Ian Thompson, managing director, Xylem UK & Ireland.
AMP7 has been an incredibly challenging time for everyone working in water. The sector has not only grappled with the impact of Covid-19, but also faced increased scrutiny from the media, the public and government, especially on issues around pollution of rivers and seas.
With these challenges capital delivery of projects unavoidably slipped, meaning the spending cycle in AMP7 – 2020-25 – is not typical of previous asset management plan (AMP) periods and all stakeholders have had to adjust.
When AMP8 kicks off in 2025, one of the crucial lessons to take with us all will be the need for stakeholders to work together much more closely. The universality of water means the number of stakeholders in this particular market is high, but it is more important than ever to build productive partnerships for a better future.
This includes the utilities, their shareholders, the regulators, the supply chain and of course, the communities they serve. Increased investment and accelerated spending will be required in AMP8, but ultimately the sector will be measured on delivery. Improved planning and communication between stakeholders will mean projects can be implemented more rapidly, with all parties working seamlessly towards common goals.
Embracing innovation and new technology will also be integral to success. Harnessing connected information across utility assets and operations will require trusted partners with a deep understanding of application and compliance and will be made possible by high quality proven products and solutions from across the supply chain.
The digital transformation can be expected to gather pace in the next five years. Utilities hold huge amounts of data and information. It is by connecting their networks that they can ensure that faster decision-making ensures the most cost-effective actions take place in a timely way.
For example, around a fifth of treated water is still lost through leaks and bursts in the UK. Using digital and connected information systems in the clean water network, to ascertain where those leaks are, will help save water and save water utilities money.
Utilities and their customers will also expect value for money and flexibility around capital and operational expenditure. New financial models like as-a-service options on equipment, servicing and maintenance will increasingly be offered alongside purchase.
There has already been a shift in the way utilities plan with the supplier community, though this still varies from company to company. Further work on communication could raise the bar across the sector. Better long-term planning and understanding can only help the supply chain provide a better service to water utilities.
The global microchip shortage from 2020-23 is just one example of the kind of logistical issue that can be mitigated by long-term planning. If companies like Xylem continue to have sight of their customers’ requirements over the next five years, and have the orders in place, then resilience to temporary disruptions can be achieved.
Embracing sustainability
The last five years have demonstrated that water utilities can put sustainability at the forefront of what they do. The increased cost of energy has acted as an accelerator, making payback on introducing some products and solutions much quicker than it was previously.
Companies are adopting sustainability targets, along with an understanding of what is required to achieve them and have become true custodians of the water cycle. One example is Southern Water’s Steps to Success programme, which is protecting and improving the environment and working transparently to enhance inland and coastal habitats.
My vision for AMP8 is a step-change around sustainability and energy use, in line with net zero carbon goals. I would also like to see examples of how digital technologies are helping to reduce waste and accelerating services.
When I talk to people coming into our company, one thing that resonates is a genuine desire to make a difference. How fantastic would it be for the sector to set the global standard for adopting innovative, sustainable practices and attracting young talent with the ambition to work on the defining environmental and water challenges of our times.
