As part of Waterwise's Water Saving Week I thought I'd share some of my water efficiency experiences since the opening of the Non Household (NHH) Water market. As the Portfolio Manager for the North of England, I’ve had the privilege of being able to work with a range of water industry experts, including wholesalers and retailers, since 2015 and have gained a broad perspective on the delivery and operational life across our sector. I’ve also been encouraged to see how, when faced with a challenge, our industry can pull together quickly to adapt and evolve. It’s certainly one of the positives I will be taking from the industry’s recent COVID-19 response.
The Environment Agency has warned that England is facing water supply shortages by 2050 unless rapid action is taken to curb water use and wastage. The water industry has, as a result, made a number of ambitious Drought Resilience and Net Zero commitments to tackle the enduring challenge of decarbonaisation and security of supply. In order to tackle the sector’s environmental challenges, and what the current COVID-19 crisis has exposed, the water industry needs to reconnect to the real world, to customers and the water they consume. To do this we need to use data to better understand customers, the water they use and how they use it. Having better customer data, will help us to effectively respond to external circumstances as they present themselves.
The NHH water market consumes around a third of the total water supplied by the water industry. Initial analysis has indicated that this equates to around 28million kg of CO2 per month, which is the equivalent of emissions from 73,000 cars. However, despite its significance, focus to date has been on reducing domestic consumption. I believe we need to make sure business customers are a bigger part of the conversation.
A recent joint open letter from Ofwat and Environmental Agency highlights the important contribution businesses can make. The NHH market has given us the opportunity to focus on business, charity and public sector customers, to understand how they operate, their requirements and ultimately what motivates them in terms of water efficiency and Corporate Social Responsibility (CSR) agendas.
I’d like to share eight things the creation of the water retail market has enabled us to learn, so far, about NHH customers that can help drive water efficiency.
1. Mind Your Business
There are around 1.2 million customers in the NHH water market who on average consume 140 million cubic meters per month. That’s about 4.7 billion litres per day. Focusing on, and improving businesses’ water efficiency, could go a long way to meeting our environmental targets. A modest change in behaviour from the top 200 customers in the NHH market, for example, reducing their consumption by one per cent, would equate to the total water consumed by 11,560 domestic households.
2. View from the Ground
Business customers are more likely to be metered than domestic customers. The consolidated market data indicates on average 93 per cent of business customers across the larger wholesaler regions are on metered supplies. This figure is harder to establish for domestic customers, with data being dispersed across and within water companies’ individual systems. However, Defra projected that domestic meter coverage would reach 61 per cent by 2020 and as stated by the Environment Agency - the more consumption can be measured, timely and accurately, the more water efficiency can be understood and driven forward.
3. Size does matter – it’s the 80:20 split
When we look at NHH consumption itself, we see that it is skewed. Approximately 80 per cent of NHH customers consume less than 1000 litres per day, which is similar to domestic usage. However, a small percentage of NHH customers account for a large proportion of water consumed in the market. Typically, around 10 per cent of businesses consume between 1000-3,500 litres per day and two per cent consume over 13,500 litres per day. Indeed, the top 200 customers account for 11 per cent of total NHH consumption or 3.5 per cent of total UK consumption. Focusing on these larger consumers and understanding their unique requirements could offer a big return on investment and play a significant role in reducing water usage.
4. Not all NHH customers are the same
In addition to consumption variations, there is a diversity of customer types in the NHH market. Unlike the domestic market, the one size fits all - ‘per person per day target’- is unlikely to work for all commercial customers. We will need to find bespoke ways to measure and drive efficiency across different customer segments. It may seem obvious, but we need to use language and references that are relevant to the type of customer or sector we are referring to. For example, ‘litres per customer’ would be a useful indicator for a hairdresser, whereas ‘litres per car’ would be more appropriate for a car production plant.
5. Not all usage is the same
Business customers use water in a variety of ways. Some applications do not require water of a drinkable standard while others, like food production, must maintain consistently high standards. Some businesses are highly dependent on a consistent supply, whilst others have a back-up or offline capacity of their own. Usage patterns are often less fixed than domestic customers, where you normally see peaks twice a day. Working with businesses to exploit their complementary demand profiles to manage peak demands at a local network level, could mitigate the requirement to re-enforce infrastructure or even reduce base load requirement.
6. Thirst for knowledge
Many business customers have a strong desire to save water both from an operational efficiency perspective, and as part of their CSR agenda. Larger beverage production-based industries in particular are keen to ensure a reliable supply of water into the future and are acutely aware of regional water resilience challenges. These companies often have a thirst for data to support decision making in locating their operations, and would factor in demand, relative to the current available capacity on the network. More open data on local network capacities and resilience will help this process and offset the need for network reinforcement.
7. Zoom Out
Multi-site business customers think nationally. They want consistent unit comparators and the same services and experiences across regional water company boundaries. Similarly, retailers are licensed to operate nationally and so have customers in many different wholesaler regions. Having a national perspective, and the resulting collaboration gained from the NHH market, will aid water efficiency solutions that require cross regional and national solutions.
8. Heads Up – share and learn from others
As well operating nationally, new retailers in the NHH market often work across different industries and markets. For example, energy and telecoms and the Scottish and NAV markets bring the opportunity for more streamlined customer journeys and savings in time and cost. As well as benefiting from a single point of contact, aligning water to other costs, such as heating, has been shown to drive water efficiency as cost savings on heated water are ten times that of water alone. By linking data from different industries, retailers have the ability to provide improved services for their customers; drive innovation and water efficiency; and ultimately enable the incorporation of water efficiency indicators in the market dataset.
Putting Water Efficiency on the Map
At present the NHH market is focused on customer demand, but the real potential will be realised when this information is linked to supply. The opening of the NHH market has enabled the potential for the development of a national dataset, with consolidated geographic co-ordinates including customer premises, supply points and meters. Using this information will allow us to locate customers within Demand Management Areas or Areas of Water Stress and gain further insight into the supply/demand balance.
By understanding the differences between supply and demand from a national context, and exploiting the unique characteristics of business consumption, the NHH market has an opportunity to make a significant contribution to the environmental agenda and support the wider water industry in achieving its ambitious goals.
The newly formed Retailer-Wholesaler sub-group focusing on water efficiency is bringing together a group of stakeholders from across the industry to focus on how the NHH market can better drive water efficiency. To find out more please email firstname.lastname@example.org or email@example.com.