News
A missed opportunity for Smart Metering – Water AMR
Author: Graham Mann, Water Audit Expert.
The regulator OFWAT have recently disbanded it’s smart metering advisory group, this is a missed opportunity for water AMR with numerous positives such as: –
* Water leakage reduction.
* Accurate water and waste water billing, no more estimated readings.
* Substantially reduced water demand which would improve water customers engagement with the water companies.
* Savings on average of between 20% and 40% for UK companies.
* Could contribute to new water tariffs.
* Water losses would be dealt with immediately so as not to impact on future water bills.
* Enable businesses to make huge savings on water and waste water charges.
* Will assist businesses to achieve environmental and carbon reduction targets.
The list goes on yet why the negativity?
Why is it water smart metering is not actively promoted by regulators and government? It cannot be the benefits have not been assessed?
We have a plausible theory based on over 25 years hands on experience within the water industry – virtually without exception in the very highest proportion of our surveys there is on average a 20% to 40% potential reduction in water consumption, this is a substantial water and waste water cost reduction saving. Now if we take these figures nationally right across all businesses and use a 30% water consumption drop average, after a year on year programme of installing water AMR devices to all UK businesses water meters thereby enabling them to quickly identify water losses and take action to reduce water consumption to a) reduce costs and b) hit environmental targets then the water companies would see substantial drops in water demand, but more importantly a substantial drop in revenues. The question is could the water companies stand a 30% drop in revenues derived from supply of water and waste water services? this would surely leave a massive shortfall, leaving very little if any cash for reinvestment in infrastructure and water company leakage projects.
Politicians in Wales have already rejected competition in the water market saying “If Welsh water loose business customers to other water licensed providers on price then Welsh water may have to increase prices to residential customers” an idle threat? we do not think so.
Competition to drive down prices in the water market, coupled with a 30% reduction in water demand, albeit over time would we believe put all water companies under severe financial pressure leading to pressure on OFWAT and Government to increase prices to compensate.
Taking this quite plausible theory one final step further, many water and waste water companies are getting snapped up by foreign investors, with such a massive squeeze on profits and reduction in revenues these foreign investors may well feel any further investment an unattractive proposition and in an effort to increase profits reduce quality of services and halt infrastructure investment leading to poor quality product and services.
In concluding – It may be politics has played a part in OFWATs decision to disband it’s smart metering advisory group, it may be in the medium term for good reasons, however businesses cannot sit idly by and do nothing, they have to reduce costs to remain competitive and hit environmental targets and the water companies may have to plan and get used to potentially less water demand and less income.