The drive for efficiency The United Kingdom Perspective

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1 The drive for efficiency The United Kingdom Perspective Nick Curtis and Stuart Trow Consultants,

2 10 Regional Water and Sewerage Companies (WASC s) 11 Water Only Companies (WOC s) Average E&W Company Property count (Millions) 1.1 Length of main (km) 14,601 Water services in Scotland and Northern Ireland are provided by two public companies Total leakage (Ml/d)) Detected repair numbers per year ,732 Reported repairs per year 5,194 AZP (m head) 42 Total Leakage E&W (2009/10 values): 133 litres/ property /day ILI approx 2.2 average Range 1.1 to 4.3

3

4 Regulatory and other drivers impacted by the distribution system Serviceability Customer Services Leakage Energy DG3 Interruptions to supply DG2 Low Pressure Risk Service Incentive Mechanism (SIM) Sustainable Economic Level of Leakage (SELL) SoSI (security of supply index) Tariff management Costs Carbon Greenhouse Gases Water Quality Safety Electricity Site visits in vans Chlorine Colour Turbidity Metals Site visits have a safety risk

5 Customer Focus Willingness to pay Brand Reputation

6

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8 Drivers for Change in the UK lower headroom, another drought Energy costs / Tariff Management Carbon trading Water efficiency Climate change Changes in regulation Customer focus External challenge The media international comparisons EU directives Cost efficiency Aging Infrastructure IWA Cities of the Future UK TSB UKWIR Water Innovation Networks New technology, techniques, innovation Competition Improved Efficiency Business separation Reputation

9 Efficient Operations Flow Control Efficient Asset Management Decision support Pressure Control Pressure Management Energy Efficiency Incident Understanding Leakage Control Asset life extension Manpower Control Selective Replacement Minimise future Totex

10 Where do people live?

11 Regional characteristics rainfall and temperature

12 Regional characteristics frost

13 Annual Average Age (Years) Calculated Average Age (Relining Benefit, 0 Years) Anglian Dwr Cymru United Utilities Northumbrian & North East Severn Trent South West Southern Thames Wessex Yorkshire Bristol Essex & Suffolk South East South Staffs Three Valleys Mains age 1990 To Financial Year End (March) Reproduced with permission from: Has infrastructure renewals accounting (IRA) delivered what was expected of it after privatisation of the water industry in England & Wales? Curtis, J.S., MA dissertation, Sheffield Hallam Business School, 2012

14 Burst rate (per 1000km per year) Burst Rate (Per Kilometer Per Year) Does age matter? 350 Relationship Between Age and Burst Rates in R² = R² = Reline Benefit 0 Reline Benefit 30 Expon. (Reline Benefit 0) Expon. (Reline Benefit 30) Age (Years)

15 TMS TVN SST ESK PRT BRL NES SRN SVT NWT YKY NNE SEW ANG WSX SWT WSH m/person 10 Main length per person JR

16 PRT NWT SST BRL SVT SRN NES ANG TMS TVN WSX WSH SEW YKY SWT PRT ANG NWT WSX WSH SVT BRL SWT SRN NES SST SEW YKY TVN TMS JR10 Burst mains nr/1000km 4.00 JR10 Burst mains nr/1000 properties

17 SST TMS YKY SEW TVN NWT SVT BRL WSH NES PRT SRN ANG SWT WSX DG2 % Props/ DG2 JR10 % props 30 DG3 6><12hrs NES NWT SVT YKY ANH TMS SWT SRN WSX WSH SEW 0 0 JR03 JR04 JR05 JR06 JR07 JR08 JR09 JR10 JR11 JR12

18 Operational use % DI L16/L26 JR03 JR04 JR05 JR06 JR07 JR08 JR09 JR10 ANH NNE NWT SRN SVT SWT TMS WSH WSX YKY

19 WD illeg unbill % WD L18/L20 JR03 JR04 JR05 JR06 JR07 JR08 JR09 JR10 ANH NNE NWT SRN SVT SWT TMS WSH WSX YKY

20 JR10 USPL% WD (L25-L24)/L20 JR03 JR04 JR05 JR06 JR07 JR08 JR09 JR10 ANH NNE NWT SRN SVT SWT TMS WSH WSX YKY

21 Conclusions Many factors explain the performance of distribution networks; there are significant regional differences in environmental and network circumstances in E&W which require a range of solutions. Comparison of network efficiency should also recognise those differences; there is no universal measure which can tell the whole story. Regulation, competition and brand reputation are driving the need for greater efficiency.

22 Thank you

23 Av cost k/ml/d saved 1400 JR10 T1 Total WE savings % DI Total savings % DI

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