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Waterscan Open Water Market

GUEST BLOG: The Open Water Market – Think before you dive in

By Claire Yeates, Director, Waterscan

When it comes to utility procurement in the UK, water has always been the poor relation to gas and electricity.  The comparatively low cost of water supply and wastewater management, coupled with a monopolistic marketplace which gave facilities managers no choice of supply, led to water being a little understood, little noticed line in most premises budgets.

In April 2017, that all changed.  Water is now a competitive retail market, giving commercial and other non-residential water users across England the opportunity to choose where to buy water and wastewater services from. This freedom of choice is most welcome but, with choice, comes complexity. Because facilities managers haven’t had to think about water before, diving into this whole new area can be daunting – so think before you dive in.

In summary, there are three main options: you can conduct water procurement in-house (so long as you have your data in order); you can outsource the procurement exercise; or finally, you can consider the pioneering concept of self-supply.

Which is right for your organisation?  Let’s take each in turn:

  1. In-house Procurement: Organisations that lack resources to play an active role in the new open market may feel that they are better off staying with their existing supplier or conducting their own tender (perhaps believing that any savings they make will be offset by the resource involved in research, analysis and negotiation).If you fit into this category we would urge you to get your data cleansed before approaching any water retailers or you’re unlikely to be offered the best deal. For example, an outsourced water bill checking service delivers a comprehensive review of a recent water bill for each site in your property portfolio resulting in a report, which benchmarked against sector peers, details opportunities for improvement that are unique to your organisation. At the very least, this comprehensive insight into your operational water footprint will assist in negotiations with your current or future water supplier.
  2. Outsourced Procurement: An alternative is to outsource the water procurement process. This strategic approach gives you independent analysis and a fully managed tailored end-to-end service to secure the right retailer for your organisation’s specific needs. Anyone who has not had to deal with water procurement before will benefit from this approach as you will quickly build detailed insight into your operational water footprint for informed decision making.  However, it will be most beneficial for industrial and commercial water users with a higher annual spend, perhaps with a nationwide or complex portfolio, and that want help choosing the right retailer in line with operational needs, existing internal systems and sustainability goals.
  3. Self-Supply: Self-supply is a good option for non-household water users that want complete control over their water consumption and the prospect of greater cost savings. It is most suitable for high consumers or large, multi-site organisations that wish to influence the marketplace while benefiting from enhanced service and wholesale prices.  Support for this route, offered by Waterscan, navigates the complexities of the market; helps companies to get and maintain a licence; and delivers comprehensive management of the administration required to self-supply water.

Whichever option works for you, remember too that savings can also be achieved by taking a proactive approach to water management through, for example, effective leak detection, meter monitoring and even re-using water with rainwater harvesting or greywater recycling technologies.

Our decades of experience have shown that every organisation is different – there is no ‘one size fits all’ solution – so do take advice.

For specific guidance on how to make the most of the open water market, get in touch via www.waterscan.com.

Industry Spotlight: FM managers will enter water contracts ‘with confidence’…

In regards to utilities, water is often considered to be the ‘poor relation’ to gas and electricity, as described by the leading specialist water management company, Waterscan. The moderately low cost of water supply and waste water management – coupled with an inflexible marketplace – has led to it being somewhat misunderstood. However, with relatively recent developments and industry analysis, this is expected to change one year from now.

Although the Water Bill was passed over two years ago in May 2014, it is expected that it is set to ‘revolutionise’ the water market landscape in the UK for the foreseeable future. It provides all commercial and other non-household water users the opportunity for the first time to switch suppliers, negotiate contracts in terms of price and service level, and is hoped to result in improved customer service levels. For bigger, multi-site organisations, the move could also potentially reduce administration due to a ‘cohesive, consolidated’ approach to billing.

OFWAT has cited climate change leading to more droughts and floods, increasing environmental standards and a fast growing population as key drivers for this initiative. The focus is all on water efficiency and this is sorely needed as significant risks to water availability have been reported. According to the Water Resources Group, the global demand for fresh water will exceed supply by 40 per cent by the year 2030.

Making less water go further will not only help to make the supply chain more resilient to future demands, but it can also help to reduce bill costs. As the director of Waterscan, Claire Yeates, explains: “The open water market comes into force in April 2017 and that seems a long way off, but negotiations with water suppliers is scheduled to commence in October 2016 – less than 12 months from now. In order for UK businesses to get the best deal, we cannot stress enough how important it is to be prepared – and that preparation needs to start now.”

She continues: “We are encouraging companies to collate 12 months’ good quality water data and to get under the skin of their water consumption. Knowing the detail behind your bills – how much water you use, where and when – will empower facilities managers to enter negotiations with confidence and structure their water contracts in the most profitable and environmentally sustainable way. These are the companies that will see the greatest benefits from the market reform.”

Waterscan suggests that the problem is that much of this information is buried in what could be as many as 27 different water contracts if you’re a multi-site operation, and all water companies have different ‘charging mechanisms’ making accurate price comparisons ‘difficult at best’.

As a company, Waterscan provides a variety of consultancy services including a free and detailed ‘Water Check’ service which helps clients fully understand their current operational water footprint and importantly, to put it into context by benchmarking against industry norms. With minimal input required from clients, this exercise helps Waterscan to take swift action to address any inefficiencies and correct billing errors, which often results in tens of thousands of pounds saved.