Waste Water & Sewage Treatment Expo 2017

Lloyd Martin, CEO, British Water
Chairman’s introduction
6 July 2017

• Graham Southall, Owner & Director, V2B Consulting
• Matt Cuchra, Partner, KPMG
The importance of ongoing investment in the wastewater sector to guarantee service
quality and ongoing improvement

Lee Horrocks, LCH Executive, British Water
AMP7 Procurement Strategies – How do SME’s move
“UP” the Water Sector Value Chain?

AMP7 Procurement Strategies
How do SME’s move “UP” the Water Sector
Value Chain?

Conten
t
Who am I? My Sector Credibility…
AMP6-Where are SME’s in the Sector?
Setting the Context…
AMP7-Where the Sector needs SME’s to
Impact?
What SME’s should be doing?
What “HELP” is available to SME’s?
To Summarise…
Questions…

Who am
I? – My
Sector
Credibili
ty…
Career highlights....
Clients worked for & with….
Lee Horrocks – MBA, BSC MechE, CEng,
FIWEM
“Helping SME’s in the Infrastructure & Water Sectors”

...you provide the
capability & capacity
that makes the sector
successful.
BUT…
…whilst you are the
foundation of the sector
to date you have had the
least influence and
lowest returns…..
-Where are SME’s in the
Sector?Influence Revenue
Innovation
Profit Manpower
Technology

Setting the Context
...is the Regulator
saying?
...are the PLC’s
saying?
“…I absolutely
encourage the water
companies to look to
get the sector Tier
2’s and SME
suppliers further up
the value chain in
the delivery of
AMP7…”
“…the Tier 2 and 3
suppliers bring the majority
of the innovation to the
sector its essential we get
more innovation into the
sector in AMP7. Therefore
we must involve the supply
chain much more in our
AMP7 delivery teams…”
Catherine Ross.
CEO - OFWAT.
Key note speech at the British
Water Annual lunch June 2017…
Chris Loughlin.
CEO - Pennon.
Speaking on behalf of Water UK…
...is the Supply Chain
saying? “…the supply chain
contributes substantially to
the capability & capacity in
the sector. However to date
this has not been truly
recognised in terms of
status, influence, reward or
contribution to
innovation…”
Lloyd Martin.
CEO - British Water.
Speaking as the leading supply chain
trade body in the water sector…“What…….

What
SME’s
should
be
doing?
Research & develop a focused STRATEGY &
PLAN
Select appropriate CLIENT[S]
Identify appropriate PARTNER[S]
Be realistic about your CAPABILITY & CAPACITY
Decide on your AMP 7 RISK appetite?
What will the risk profile be?
Is it real risk?
Do you truly want to move up the value chain?
Pro-Actively talk to target client[s] &
partner[s].
MARKET yourself and your contribution to
AMP 7
At a higher level – Where the door is open!
About the innovation you have already delivered
About what innovation is coming – BE BOLD
About what savings can be realised – BE VERY BOLD
About what are you TRULY looking for in AMP 7
Recognition?
Appropriate Influence?
Fair & Reasonable reward for your contributions?
Other?

“HELP” is available to SME’s?
From the;
SUPPLY CHAIN Associations. They
know the sector and a lot of the key
people in it…
From the;
WATER PLC’s Association. Its board
has the CEO’s on it who are driving
the need for Innovation from the
SME’s
From the;
TIER 1 Contractor & Consultants
Association’s. Who are recognising
that to WIN they MUST include SME’s
in their AMP 7 teams…
From individuals &
consultants who want the
SME’s to achieve the success
they deserve...

To Summarise…
YOU the Supply Chain are the FOUNDATION of the sector…
To date your contribution has been UNDERVALUED….
….to an extent you have LET it be that way
AMP 7 will be the catalyst for change
The sector masters are driving that CHANGE
You have a REAL opportunity to realise much more than before
You should PLAN your strategy NOW
Be REALISTIC & PRAGMATIC [there is enough work for us all]
You have a short window to BE SEEN to want to step up
HELP is available you only have to ASK
…and REMEMBER…

LCH Executive Ltd
“Helping SME’s in the Infrastructure & Water
Sectors”
Contact
lch.executive@gmail.com
07817 268621
AMP7 Procurement Strategies
How do SME’s move “UP” the Water Sector Value
Chain?
Questions…….?

• Izabela Kasak, Energy Optimisation Engineer, Anglian Water
• Dr Abraham Negaresh, Senior Process Engineer, WRC
• Lorenzo Menin, Engineer, WRC
Maximising water reuse and acknowledging the role of treated wastewater reuse as
an alternative source of water supply

• Prof Bruce Jefferson, Professor of Water Engineering, Cranfield Water Science Institute
• Dr Cesar Mota, Professor Adjunto, Universidade Federal de Minas Gerais, Brazil
• Dr Kees Roest, Senior Scientific Researcher, KWR Watercycle Research Institute
• Chris Woods, Head of Food & Beverage, Nijhuis H2OK
Evaluating the benefits of technology and innovation for
both the water industry and its customers

www.cranfield.ac.uk
Sewage works of the future
Ensuring the innovation and evolution is
customer centric
Incorporating new approaches to waste water
management and sewage treatment
Biogas production from wastewater treatment

Is it time to rethink our
approach
Wastewater IN
Treated Water Out
Sewage works
Energy IN
GHG out
Sludge out
Chemicals IN
750,000
tonnes per year
(0.1% recycled)
Per ML:
634 kWh
(2-3% of UK)
406 kgCO2e
(5% of CH4)

An effluent factory
Adsorb nutrient
and recover
Increase total
energy from
sludge with
thermal processesSludge imports
(not required)
AnMBR
Thermal treatment
degasScreen Reactive media
CO2
Regenerant
Fertliser
Grit recovery
BiostruviteAmmoniaorganic recovery
Maximise recovery from
the liquor line. Avoid
return load.
Maximise production of
new biorecovery
(bioplastics etc..)
Grit removal to protect
high tech downstream
and recover grit

But what about small /
rural works

A small works / rural
works: fit and forget
Aerobic wetland
air
Anaerobic Pond
Part of wetland fitted
with reactive media if P
consent required
Part of wetland fitted
with reactive media if P
consent required
Gas compressed or
boiler for heat
generation
Gas compressed or
boiler for heat
generation
De sludge every
7-10 years
De sludge every
7-10 years
Generate community
involvement:
societal/ecosystem
benefits.
Generate community
involvement:
societal/ecosystem
benefits.

A sketch of a new
flowsheet for Australia

Analyse flowsheets to
define core attributes.
the core attributes to refine and shape

But what do people
actually value and want.

www.cranfield.ac.uk
T: +44 (0)1234 750111
Thank you for your
attention

Matt Cuchra, Partner, KPMG
Deregulating the water market and developing a
competitive marketplace

Siobhan Kennedy-Hall, Business Development Manager, water2business
Examining commercial opportunities within the non-
regulated sector

26
Siobhan Kennedy-Hall – Business Development Manager
water2business
Challenges and Opportunities
A Retailer’s Perspective
6th
July 2017
Author: Siobhan Kennedy-Hall – Business Development Manager

27
• Following the opening of the water market, companies are having to work together in new and
untested ways.
• How should we be operating in this marketplace?
• Wholesalers have a whole new set of customers – retailers, and as well as working hard to ensure
they offer a level playing field to new entrants, they must meet retailers’ expectations and provide
the service necessary to ensure end customers don’t suffer from the change.
• What do retailers want from wholesalers ?
• How well placed are wholesalers to deliver?
• The role of third party intermediaries
I’m excited to be part of this expert panel will explore the challenges and opportunities presented by
the opening of the water market.
What are we here to debate…
Todays Subject Matter

28
A Wessex Water and Bristol Water
Company creating innovative, tailored
water management packages for
business customers throughout
England and Scotland
Who are we...
water2business

29
What were the key drivers…
The Retail Market
Encourage innovation
Improve water efficiency
Drive down pricing
Improve customer service

30
How should retailers do it?
“Do what you do so
well that they will want
to see it again and
bring their friends”
Walt Disney
Iconic America businessman

31
Consistently
Good Service
Innovation
Customer
Expectations
What should the market deliver ?
This is what our customers say…

32
• Uniformity – Can we have a common approach
from wholesalers…
• Tariffs and pricing
• Methods of communications and interactions
• Service Level agreements and performance
• Service offerings
What do we want from Wholesalers?
Here’s our wish list for you...

33
How well placed are wholesalers to deliver?
A snapshot from our experience..
• It’s a mixed bag !
• We’ve received various levels of service
• Lack of uniformity makes being a retailer operating
nationally complex and leads to confusion for
customers
• Its not all doom and gloom…most wholesalers are
pragmatic, responsive and are adapting to the
demands of the new markets

34
What will make the new market work
What will make the new market work
Customers are confident
Customers benefit from lower prices and/or better service
It’s easy for companies to join and leave the market
There is a simple and efficient switching process
There is limited or no anti-competitive behaviour
There is limited or no mis-selling
Trust

35
Where do they fit in?…
The role of third party intermediaries
• The good, the bad, the evil…..
• Knowledge
• Understanding
• Attitude
• SMEs

36
Measure performance to drive improvement…
Service Level Agreements (SLAs)
• SLAs monitored by MOSL and Ofwat
• Monthly performance reports available for peer
comparison
• How do we measure the performance of 3rd
Parties?
• There is nothing currently in place
Its not clear whether existing SLAs and KPIs benefit
the customer and this need to be the focus

37
Our Promise
Sustainability Savings

• Stephen Riches, Asset Planning Manager (Biosolids), Anglian Water Services
• Steve Bungay, Owner & Director, Helix ECL
• Matt Taylor, Organics Technical Manager, Aqua Enviro
Increased competition in upstream sewage and sludge markets

UnderstandingtheChallengesandOpportunities
SLUDGEDEREGULATION
SLUDGE DEREGULATION
Steve Bungay
Technical Director – Helix ECL
Understanding the Challenges and
Opportunities

SLUDGEDEREGULATION
• Ofwat, the economic regulator in
England, are reviewing the regulatory
framework for sludge
• They are promoting free markets
between the water companies and
commercial sector treating biowaste
• Ofwat have identified that sewage
sludge, is a resource, with substantial
scope for market development
• Currently, the water industry is
highly regulated
Sludge Deregulation

SLUDGEDEREGULATION Economic Regulation
• The UK water supply is overseen by independent water regulators in
England and Wales, Scotland and Northern Ireland
- These regulators ensure that water companies consider the needs
and interests of consumers in their work, whilst maintaining
efficient and economically sustainable practice
- The economic regulators for the UK water sector are
 England and Wales – Ofwat
 Northern Ireland – The Utility Regulator
 Scotland – Water Industry Commission Scotland (WICS)
- The regulators in the UK are responsible for settling limits on
pricing and protecting customers interests, encouraging
competition and investment within the industry, and administering
the licensing regime for water and sewerage companies as set out
in the Water Services Act (1991)

SLUDGEDEREGULATION Environmental Regulation
• Water companies in the UK are committed to protecting our
environment
- The UK water sector works closely with the regulators to ensure
the continued delivery of environmental benefits
- The environmental regulators that the water sector works with
are
 England – DEFRA and the Environment Agency
 Northern Ireland – Department for Agriculture Environment
and Rural Affairs (DAERA)
 Scotland – Scottish Environment Protection Agency
 Wales – Natural Resources Wales
- The regulators in the UK are committed to supporting our
environment by regulating water quality and protecting public
health, whilst working with the water sector to help support the
industry

SLUDGEDEREGULATION Regulations – the beginning
• The Rivers Pollution Prevention
Act (1876)
- Part 1
Law as to Solid Matter
Prohibition as to putting solid matters into
streams
- Part 2
Law as to Sewage Pollution
Prohibition as to drainage into streams of
sewers

SLUDGEDEREGULATION
• Sewage Sludge Directive (Council Directive
86/278/EEC)
European Union Law
Post-War Regulations for Sludge

SLUDGEDEREGULATION
• The Sludge Use in Agriculture
Regulations (1989)
UK Statutory Instrument
Current Regulations for Sludge
• The Environmental
Permitting Regulations
(2010)
UK Statutory Instrument

SLUDGEDEREGULATION
Water Companies
Assurance Schemes
Commercial Operators

SLUDGEDEREGULATION
1 2 3 4
Biomethane
Electricity
Biosolids
Sewage
Wastewater
Treatment
Works
Sludge
Thickening
Site
Sludge
Treatment
Centre
including
Anaerobic
Digestion
Biogas
Sludge Thickened
Sludge
Digester
Feed
Sludge Deregulation
Deregulation in Practice

SLUDGEDEREGULATION
Water Company Asset
Utilisation
Deregulation in Practice

SLUDGEDEREGULATION
1
1
1
1
2
2
2
3
3
4
4
Sewage
Sewage
Sewage
Sewage
WwTW STS STC Digester
Water Company Asset Utilisation
Biomethane
Electricity
Biosolids
Biogas

SLUDGEDEREGULATION
i1
i2
i3
i4
j1
j2
j3
j4
j5
o1
o2
Sewage
Sewage
Sewage
Sewage
WwTW STS
c1
c2
c3
STC Digester
+1 +1
Multi-layer Back Propagated Neural Network
Water Company Asset Utilisation
Biomethane
Electricity
Biosolids
Biogas

SLUDGEDEREGULATION
Cross Boundary Trading
Deregulation – Scenario 1

SLUDGEDEREGULATION
Sewage Sludge
AD Plants
Sewage Sludge
& Commercial
AD Plants
ADMap-AnaerobicDigestionandBioresourcesAssociation:www.adbioresources.org/map

SLUDGEDEREGULATION
i1
i2
i3
i4
j1
j2
j3
j4
j5
o1
o2
+1 +1
Sewage
Sewage
Sewage
Sewage
WwTW STS
c1
c2
c3
STC Digester
i5Sludge
Additional input to the system
Biomethane
Electricity
Biosolids
Biogas
+1

SLUDGEDEREGULATION
Separated Sludge Business

SLUDGEDEREGULATION
SLUDGEDEREGULATION
i1
i2
i3
i4
j1
j2
j3
j4
j5
o1
o2
+1 +1
Sewage
Sewage
Sewage
Sewage
WwTW STS
c1
c2
c3
STC Digester
i5Sludge
Biomethane
Electricity
Biosolids
Biogas
+1

SLUDGEDEREGULATION
i0
i0
i0
i0
i1
i2
i3
j1
j2
o1
o2
Sewage
Sewage
Sewage
Sewage
WwTW STS
c1
c2
STC Digester
Sludge
Sludge
Sludge
+1
Sludge i4
Optimisation links are broken
Biomethane
Electricity
Biosolids
Biogas
+1

SLUDGEDEREGULATION Deregulation in Practice
• Scenario 1 - Cross Boundary Trading
- Easy to implement
- Easy to optimise
• Scenario 2 - Separated Sludge Trading
- Optimisation links are broken
- Will not provide cost savings for customers
- Will provide the water companies with the opportunity to divert
profits into the non-regulated “sludge” business
• Scenario 3 - Cross Sector Trading
- Does deregulation open up the market between the water
companies and the commercial sector?

SLUDGEDEREGULATION
Cross Sector Trading

SLUDGEDEREGULATION Cross Sector Trading
• Water Companies
- The Sludge Use in Agriculture Regulations (1989)
- Safe Sludge Matrix
- Biosolids Assurance Scheme
• Water Company Exemptions (giving commercial advantages)
- S3 Storing Sludge
- T21 Recover waste at a waste water treatment works
- U10 Spreading waste to benefit agricultural land
• Commercial Operators
- The Environmental Permitting Regulations (2010)
- PAS110

SLUDGEDEREGULATION
• Plants (2015) shown by electricity/CHP, heat only, and
biomethane
Commercial Sector Operational
Plants
Capacity
Electricity/CHP plants 215 210 MWe
Heat-only plants 6 0.1 MWth
Biomethane plants 25 17,266 m3
/hr
Water Sector Operational
Plants
Capacity
Sewage electricity plants 155 177 MWe
Biomethane sewage plants 4 4,200 m3
/hr
AnaerobicDigestionandBioresourcesAssociation:www.adbioresources.org
Cross Sector Operation

SLUDGEDEREGULATION
Digester Sector Electricity
Plants
Biomethane
Plants
Operational Planning Operational Planning
Sewage Sludge 159 0 9 0
Agricultural 235 276 59 36
Industrial 35 23 7 3
Commercial 79 78 15 9
• Anaerobic Digestion in the UK (2017)
- With the uptake of various financial incentives, there
are now more commercial digesters than sewage sludge
digesters
ADMap-AnaerobicDigestionandBioresourcesAssociation:www.adbioresources.org/map
Cross Sector Operation

SLUDGEDEREGULATION Opportunities
• Deregulation presents opportunities and challenges to the
water industry
- Integrating skills from the water companies and the commercial
sector, and, using pragmatic regulation will realise the greatest
potential from a deregulated sludge market
- Cross boundary trading offers the potential to optimise the
utilisation, reuse, and recovery of sewage sludge
- However, separating sludge from sewage reduces the efficiency in
which they are treated holistically
- In addition to this, disparate regulations disincentivise the
engagement from the commercial sector
• Overall the opportunities are limited
- Cross Boundary Trading is the only real opportunity that could
offer savings to customers

SLUDGEDEREGULATION Challenges
• Deregulation presents both economic and environmental
challenges
- Economic deregulation of sludge requires regulatory change to
promote free markets between the water companies and
commercial sector treating biowaste
- There could an opportunity to consolidate and simplify the
existing regulatory framework
 BAS v PAS110
(Currently the commercial sector operates at a financial disadvantage to
the water companies)
• Economic deregulation must NOT undo the environmental
improvements that have been implemented since the 1950’s
• Reportedly, privatisation has cost customers £2.3
billion/year more than it would have if water had remained
in public ownership
(Financial Times, Water Briefing, Utility Week, University of Greenwich)

SLUDGEDEREGULATION Conclusions
• Cross boundary trading
- Offers the possibility of local efficiencies and optimisation
• Separated Sludge Business
- Will reduce the efficiency of the overall treatment process
- Prevent economic savings from optimisation of the overall
treatment process
- Facilitate the transfer of “customer savings” to the non-regulated
business
• Cross Sector Trading
- Due to the disparity in the cost of complying with environmental
regulations, there is no incentive for the commercial sector to
enter the water company sector
• Ultimately, deregulating the sludge market is NOT likely to
offer savings to the water company customers

SLUDGEDEREGULATION
Consulting Process Scientists & Engineers
Steve Bungay – Technical Director
stevebungay@helixecl.co.uk
www.helixecl.co.uk
6th
July 2017

Increased competition in sludge
markets – what difference will it
make?
Matt Taylor
Organics Technical Manager

Aqua Enviro is a specialist environmental consultancy,
conference organiser and training provider in the water,
wastewater, bioresources and organic waste sectors.
Suez Water UK

Water 2020
• OFWAT aims to promote a market for
trading sludge
• Specifically this means:
• Companies can trade with each other and
use processing centres in adjacent
company areas to improve efficiency
• More efficient investment to make the
most of sludge processing across
company boundaries
• Better interaction and integration with the
wider organic waste market

Legislative and non-legislative controls
• 1986 EU Directive on Sludge Use in Agriculture
• 1989 Sludge (Use in Agriculture) Regulations
• 2010 Environmental Permitting regulations (plus Scotland, NI, etc.)
• BSI PAS110:2014
• AD Quality Protocol (SEPA Position Statement)
• EA/SEPA/NRW/NIEA Position Statements on non-waste digestion
• Animal By-products Regulations
• 1996 Code of Practice for Agricultural Use of Sewage Sludge
• Water industry HACCP guidelines
• Safe Sludge Matrix
• Biosolids Nutrient Management Matrix
• Plus various others:
• Codes of Good Agricultural Practice
• Groundwater source protection zones
• The Nitrate Pollution Prevention Regulations
• S3 exemption (field storage)
• Etc…

WastesWastes
SludgeSludge
YesYes
YesYes
Input material
AD process
regulated?
Digestate regulated?
NoNo
YesYesManuresManures
Purpose-grown crops
or Crop by-products
Purpose-grown crops
or Crop by-products
NoNo
YesYes
YesYes
NoNo

WastesWastes
SludgeSludge
Bespoke permitBespoke permit
Urban wastewater
treatment directive
Urban wastewater
treatment directive
Input material
AD process
regulated?
Digestate regulated?
Standard rules permitStandard rules permit
Exemption from
permitting
Exemption from
permitting
Sludge and wasteSludge and waste Bespoke permitBespoke permit SR 2010 No. 4SR 2010 No. 4EoWEoW
Bespoke permitBespoke permit
Standard rules permitStandard rules permit
Exemption from
permitting
Exemption from
permitting
Sludge Use in
Agriculture Regs
Sludge Use in
Agriculture Regs

All AD plants in the UK
Taken from: http://adbioresources.org/map

All AD plants in the UK –
excluding sludge digesters

excluding sludge and
industrial digesters

excluding sludge, industrial
and agricultural digesters

Opportunities
• Cross boundary trading can increase efficiency
• Utilising spare digester volumes to cost effectively increase recycling
• Share skills/expertise between waste and water sector
• Harmonised environmental regulations
• Create a level playing field

Challenges
• Not being anti-competitive
• Not losing benefits of integrated treatment process (sludge and
wastewater)
• Maintain/improve environmental protection
• Technical differences (e.g. contaminants and material properties)
• Cost/profit share in regulated/non-regulated business
• Feedstock availability
• Gate fees
• Recycling targets (E, S &W)

Thank you
MattTaylor@aquaenviro.co.uk
07833 463711

Chris Woods, Head of Food & Beverage, Nijhuis H2OK
A world tour of Key Industrial Market Trends

Dr Kees Roest, Senior Scientific Researcher, KWR Watercycle Research Institute
Local water and energy solutions - Showcase Cleantech Playground at De Ceuvel
in Amsterdam, The Netherlands

Lloyd Martin, CEO, British Water
Chairman’s closing remarks

Waste Water & Sewage Treatment Expo 2017

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Editor's Notes