Aquastrat

Strategies for water and renewables

Moving the Goalposts

4th November 2014, 11:03

So, as previous articles have suggested, there may be little interest among  C&I customers in taking advantage of an open water market, and incumbent WaSCs have two years to implement an effective defence strategy. If it all turns out to be a non-event  (except possibly in the South East), how might the Government and OFWAT react?

We're looking at a scenario some 5 years away, which, if but a twinkle in the eyes of the water industry, is an awful long time in politics. So predictions are fraught with difficulty. But by 2019, when the first meaningful reviews of a competitive English market would be possible, we will definitely have a Head of OFWAT, and possibly a Prime Minister, who were not the prime movers behind the competitive market. So they may not care much either way. Certainly not enough to tinker further with the market or starting to strongarm incumbents into making it more exciting.  Water, the nexus of those two political hot potatoes, health and infrastructure, has never been seen as a vote winner.

Again, the already open Scottish C&I market offer some clues. The 2011 Review of the Market undertaken by WICS certainly referred to new entrants and offered examples of innovative ideas they had brought to customers. But it studiously avoided noting Business Stream's dominance of the market.  Instead it talked of gains by customers who hadn't switched at all, but had just benefited from the simple, defensive measures offered by Business Stream, of advice on conservation and efficient use - citing 7.4bn litres less water used, 8,000t lower Co2 emissions, and some £13m less spent on water.

All good stuff, and definitely a better story than the one coming out of the competitive UK power market these days. But it seems from this that OFWAT's likely response to a squeak rather than a bang will be, like WICS, simply to redefine success.