Shake-up needed to meet carbon targets
The water industry faces a radical shake-up and must adopt innovative technology to meet the demands of a low carbon future, says a report by the Council for Science and Technology, which is funded by the government.
Published last month, the report - Improving Innovation in the Water Industry - calls for new, sustainable methods of powering the industry, in addition to pump optimisation techniques to reduce energy demand.
"Pump optimisation, while highly desirable, is seen by the water companies as a medium to long-term goal. However, the water industry is potentially advantaged to make use of intermittent sources of renewable energy such as wind and solar for non-time-sensitive uses such as pump storage, "according to the report.
Although companies welcome this approach, some question whether Ofwat will look favourably on wind turbines becoming part of the regulatory asset base. However, Ofwat's climate-change policy statement emphasises the need for companies to adapt to climate change requirements in the 2009 price review.
And regardless of the price review, from April 2010 water companies will be subject to the government's Carbon Reduction Commitment, the UK-wide mandatory scheme to promote energy efficiency that requires companies to purchase allowances for their CO2 emissions.
The scheme is "an opportunity to sharpen competitive edge in the face of the current recession", said Liam McDonagh, head of consultancy services at power company Ener-G. He believes it can be used as "a springboard to boost bottom-line performance by reducing energy costs while enhancing corporate social responsibility programmes".
The water industry is the fourth most energy intensive sector in the UK, accounting for 3% of the total UK electricity demand but with only 10% of its energy drawn from renewable sources.
The water industry used 7,700GWh of energy in its total operations during 2005/ 06, emitting more than four million tonnes of greenhouse gases and contributing almost 1% of the total UK greenhouse gas emissions.