A summary of the challenges and options that lie ahead for UK water utilities in the AMP 6 regulatory cycle

1. Innovation as a
Necessity
An Introduction to TrunkMinder
“Service Delivery” Open Innovation
Event
11th October, 2012

2. • Northumbrian Water Group
undoubtedly takes its
performance seriously
• NW does so
• not just as regards OFWAT
• but as part of its broader community
pursuing best practice internally and
externally

3. • It is also important to
acknowledge the “headaches”
of operating a water system
simply on a day to day basis
• the bursts
• the OFWAT queries and consultations
• the local press and radio asking for
comments when things have gone awry
• But a broader picture that will
potentially transform the
operation of utilities in the UK
and with innovation at its core

4. • The audience is already
familiar with how the water
sector currently works
• OFWAT has itself acknowledged
the current CapEx bias
• Detailed OFWAT targets have
also undoubtedly dominated
much of utility activity to date
• and all against a background,
until recently, of economic
growth and debt-financed capital
structuring

5. • But the context is changing and
potentially significantly
• Whilst important in the long-term
the change is not just about
smart network management and
data-led automisation which is
some way down the road
• Instead the change is more
immediate
• TotEx in place of CapEx
• broader outcomes in place of detailed
outputs
• outperformers keeping the benefits
• Unfortunately this is against a
backdrop of economic frailty not
just in the short term but at least
the medium term too

6. • The current backdrop is also
one
• where OFWAT has been
criticised earlier in the year over
leakage, criticism that is likely to
get passed on to you in the
course of the AMP6 process
• where those who hope to
respond simply with a “well we’ll
replace all the pipes then” are
likely to get pretty short shrift

7. • As ever, the key issue will be
the financials
• but not in a “spend to improve
infrastructure” kind of way that
has applied before
• instead in a “you’ve got to do
more with less…you’ve got to
be smarter” kind of way

8. Option 1 – Business as Usual
• As a result, water utilities have a choice
• They can carry on as they are, continuing with
• current pain points
• having only limited knowledge of what is going on on their trunk
main network
• paying compensation for bursts and having their brand undermined
• having employees and contractors out in the roads running manual
inspections and repairing and replacing cheap kit with all the health
and safety risks that go with that
• with making the same old submissions to OFWAT, and have them
rejected as not reflecting the new realities

9. Trunk Main Option 1
– Business As Usual

10. Option 2 – Outperforming
• Or utilities can position themselves for the future as outperformers
• working on credible regulatory plans that reflect the diminishing scope for
CapEx
• lessening the disruption and costs of bursts by repairing leaks before they
become bursts
• applying automation to know real time what is happening on their critical
mains
• having a single supplier providing four points of critical information rather than
four suppliers each providing one each
• using resilient technology
• to reduce health and safety exposure
• that allows reports and data to be gathered and viewed not in a Day-Glo jacket in the
middle of the road but when
• it is needed
• before customers know about it
• from wherever the utility operator happens to be

11. Trunk Main Option 2
- Permanent Monitoring

12. TrunkMinder
• Because that is what Syrinix’s TrunkMinder
provides
• 150 being deployed across London
• Providing real time information
• Allowing leaks to be located on trunk mains within 1 metre and
repaired before bursts occur
• Automatically monitoring utility strategic networks every second of
every day
• Guarding critical pipes with a web-based configurable interface
• Guarding critical brands
• With a sub-3 year payback

13. • Whilst swimming in a river, the
overall direction can seem
unclear
• But viewed from above, the
direction in which the UK water
sector is heading, with AMP6
preparations well underway, is
very clear indeed and that is
• towards spending less to do more
• towards acting on an informed basis
• towards innovation at the core of your
activities
• Syrinix’s aim with TrunkMinder
is to work very much with
water utilities as they adapt to
those trends and continue as
the leading company that they
are