In the light of Environment Minister Stephen Barclay’s call for water company CEOs to accelerate plans to deliver on sewage spills reductions in the next 12 months, Steve Morris, Managing Director at wastewater technology specialists HUBER Technology UK, takes a look at mitigating risk and delivering supply chain resilience during AMP8.

Steve Morris: We’ve all seen the continuing high profile and critical coverage of water company performance in the last few years – with the regulators and government now raising their game to tighten up and address public concerns over pollution incidents and water supply outtages in both water and wastewater infrastructure services.

A number of the water companies have recently published their half-yearly reports and accounts – always an interesting read for the wider water sector. However, for me the most interesting read recently has been the commentary they are required by law to provide on the principal risks and uncertainties – both present and future - facing their organisations.

Managing risks across all parts of their business – with the principal risks broadly defined as compliance, financial and operational - is an ever-present duty for the water and wastewater companies.

Understandably – the risk of strategic asset failures and operational incidents can not only lead to additional production, distribution and treatment costs, they can also result in regulatory under-performance, non-compliance and ODI penalties accompanied by significant financial penalties and fines.

Nowadays pretty much all them flag up supply chain resilience as part of this. In the wake of Brexit, the pandemic and Russia’s invasion of Ukraine, resource scarcity or disruptions to supply chains which prevent the procurement of products or services at the expected cost, availability, or quality are explicitly being identified as increasing risks.

HUBER sits as a specialist technology solutions provider in the water and wastewater treatment side of the supply chain and we have a very clear awareness of the peace of mind factor we offer our customers in mitigating those risks. We understand the benefits of consistent access to a reliable source of goods and services from the supply chain affords our water company customers to help them deliver the services they are tasked with providing.

In the context of the upcoming AMP8 investment programme this is key – the water companies are proposing a massive expansion of their activities in the AMP8 business plans and the government, regulators and public have clear expectations that they will have the capability to deliver.

Storm Overflows Discharge Reduction Plan - push to deliver targeted improvement within specified timeframe

Photo: example of storm overflow

This extends to targeted challenges where they are now being pushed to deliver a given improvement within a specified timeframe. The most high profile example of this is of course the Storm Overflows Discharge Reduction Plan which sets out a mandatory £60 billion investment programme for improving all storm overflows performance, culminating in a requirement that by 2050, no storm overflows will be permitted to operate outside of unusually heavy rainfall or to cause any adverse ecological harm.

As part of this, the water companies will be required to ensure that all inland, estuarine and coastal storm overflows have screening controls in the shape of screens that avoid pollution by limiting the discharge of persistent inorganic material. In June 2023, Ofwat announced that an additional £1.7 billion of investment will be made available to accelerate new storm overflows infrastructure, so it can be delivered before 2030.

Photo: Environment Minister Stephen Barclay

The call for action was further reinforced by the new Environment Secretary Steve Barclay, writing to water company Chief Executives in December calling on them to go “further and faster” to secure a measurable reduction in sewage spills in the next 12 months and asking them to respond with written plans by 19th December.

With some 15,000 storm overflows in place in England alone, this will be no mean feat and the plan acknowledges that the upgrades will require significant increases in supply chain capacity, from skills to equipment.

HUBER - gearing up production capacity to meet increased demand

From a supply chain point of view, HUBER is aware of the need to have the necessary resources and capabilities in place to help the water companies deliver on these demanding commitments. With over 1300 of our storm screens are already in place at hundreds of sites across the country, we now have water companies and their Tier 1 delivery partners alike discussing the possibility of securing future production capacity at HUBER’s factory in Germany.

Photo: HUBER HQ and production facilities in Germany

We are already in a strong position to meet this increased level of demand – HUBER has made significant investment in a major expansion of its factory with the considerable levels of volume firmly in mind between now and 2030. In April 2023 the company inaugurated its new 11 million euro state of the art P3 production hall, with a production area of approx. 6,000 m².

Image: HUBER Technology - Production halls 1,2 and 3 already in place and production hall 4 under construction

With the stability and resources to build on its 150 year established presence in the global water market, HUBER is already involved in the development of another new production hall. Detailed planning for the construction of the new P4 assembly and logistics hall, which will also have an area of approx. 6,000 m², is already underway, with completion planned for the second or third quarter of 2024.

P4 will enable the value stream-optimised processing of components for filter and screen elements. In addition, P4 will be used for, the assembly of large-volume subassemblies and the logistical handling of large-scale projects.

In terms of providing security of supply for our water sector customers, this ramping up of our production capability means we are uniquely well placed to meet their requirements in the timeframe required.

The sector has always been seen as risk-averse – understandably so given the critical infrastructure it has to put in place to provide safe and reliable water and sewerage services day in, day out to millions of customers. With a long established track record of experience and proven capability, we can offer our customers the security that we are a safe pair of hands.

Maintenance capability at sewer networks a key requirement in AMP8

This also extends to our ability as an OEM to provide continuing maintenance and servicing for the HUBER assets with decades of operational life which are already in place across the country, and the massive volume of upgrades and new assets which will be going in during AMP8.

In addition, a significant investment in new equipment for our hire fleet means we can react fast to address the points of failure which can occur for any company. Responding quickly can provide an interim solution to an unexpected problem while a more permanent solution is developed. Another benefit our customers value which also helps them to avoid the risk of non-compliance with their regulatory obligations – which can carry significant reputational and financial penalties.

Stephen Barclay spelt out, the need for accelerating maintenance work at sewer networks and the core legal requirement for effective operations through regular maintenance.

He also addressed the need for interim solutions at high spilling overflows. “Any immediate opportunities to utilise technology and engineering advances in a cost-effective way to quickly mitigate the impacts on high priority and high public interest sites should be seized”. Perhaps this in some way recognises the longer term timescales set out in the Storm Overflow Discharge Reduction Plan, which has been widely criticised.

More regulation on the cards for wastewater treatment?

In terms of developing areas of regulatory risk, our parent company in Germany is already looking ahead some 10 to 20 years further down the line and investing for the future.

The Storm Overflows Discharge Reduction plan stipulates that water companies must significantly reduce harmful pathogens from storm overflows discharging near designated bathing waters standards by 2035.

HUBER is investing cash and resources into R & D and has developed Quaternary Treatment solutions for the removal of micropollutants - sewage treatment effluents are among the most critical paths of entry for these substances into surface waters.

More regulatory activity in England is also on the cards as Ofwat looks to progress further in its work on operational resilience with a view to implementing and integrating a monitoring framework from 2026 to drive improvements that could be used from 2028 onwards.

To sum up, we believe our resources, knowledge and expertise afford us a significant competitive advantage in terms of what we can offer to help the water companies both mitigate their risks and help them deliver what is probably set to be the biggest investment programme since the water sector was first privatised in 1989.