Resilience PR19 and AMP 7
Resilience, PR19 and AMP7: the outlook for contractors and product manufacturers. 19-03-2020
The Water Act 2014 extended Ofwat’s primary duties to include furthering the long-term resilience of water and wastewater services. Always important in maintaining the delivery of water and wastewater services, in PR19 (Price Review 2019) resilience in the round has been highly prominent in the water company’s thinking and business plans. This article seeks to place the resilience of physical infrastructure and associated capital works in the wider context of ‘resilience in the round’ and, in particular, looks at the impact of this evolution on contractors and product manufacturers and the contribution they can make.
Resilience in the round
The definition of resilience referenced by Ofwat is:
‘The ability to cope with, and recover from, disruption and anticipate trends and variability in order to maintain services for people and protect the natural environment now and in the future.’
The three different spheres of resilience – ‘resilience in the round’ – are corporate, financial and operational. Clearly, all three are closely linked and fundamental to a water company’s business model. If a water company’s reputation is damaged by, for example, a pollution incident, it may find it harder or more expensive to raise finance which in turn will impact on its ability to fund physical infrastructure projects such as new pipelines, reservoirs and treatment works.
Six capitals and 4Rs
Taking Anglian Water as an example, their business model embraces, ‘…an integrated systems approach to resilience, considering the needs of our customers, stakeholders and the environment’. Anglian references the 4Rs and six capitals in their systems thinking and resilience reporting.
The six capitals emphasize the different kinds of capital an organisation relies on to survive and thrive. They are often referred to as financial, manufactured, human, social/relationships, intellectual and natural. A major resilience project draws on financial, manufactured (construction) and human capital and impacts on ecosystems whose building blocks are natural capital such as geology, flora, fauna, soil and water.
Resilience – the ability to withstand shocks and stresses - can be modelled as ‘Risk x 4Rs’. Risk takes into account the scale and duration of impact of any shock or stress, the likelihood it will occur, and the vulnerability of the organisation. The 4Rs are, in effect, factors that mitigate the risk. The 4Rs of resilience are Resistance, Reliability, Redundancy and Response/Recovery. Increasing capacity, creating alternative sources of supply, ensuring system reliability and building in control mechanisms are just some of the ways water companies can increase network resilience.
Characteristics of network resilience projects
Whilst every infrastructure resilience project is different, there are certain characteristics that are common to many. Resilience projects, by their very nature, tend to be strategic compared to ‘bread and butter’ maintenance and repair works. This provides the opportunity for detailed planning, greater scope for innovation and creativity, and collaborative input from ‘expert’ third parties such as contractors and product manufacturers. These factors are important because resilience projects are often complex, larger in value and physical size, and higher profile. Consequently, there is a premium on quality and ‘getting it right first time’. Water companies shouldn’t have to revisit critical resilience infrastructure.
Opportunities and challenges
Given the above, resilience projects provide both opportunities and challenges for contractors and product manufacturers. Alongside resilience, innovation and customer service, collaboration is one of the most prominent themes of PR19. One opportunity for contractors and product manufacturers is to collaborate with water company engineering teams and consulting engineers to unlock efficiency gains at the design stage. Successful collaboration, however, places demands on contractors and product manufacturers. They have to have a culture that embraces collaboration, the technical resources, capacity and experience to collaborate, and the ability to deliver on their commitments to the group. A further opportunity is that the development of new products and techniques on one resilience project are often transferable to others.
From theory to reality: Dalmacoulter resilience scheme
An example of the afore-mentioned opportunities and challenges in action is the Dalmacoulter resilience scheme in North Lanarkshire. The scheme required the construction of a1000mm diameter HPPE pipeline between Cumbernauld and Airdrie. The pipeline was almost 5km in length and was in duplication to the existing pre-stressed concrete pumping main. It ensures the resilience of supply to 185,000 people.
The project was delivered by the Caledonia Water Alliance (CWA), a partnership of AECOM and Morrison Utility Services.
AVK collaborated on the design and development of critical phases of the project. The final scheme design incorporated thirteen gate valves including four DN800 Series 55 RSGV (Resilient Seated Gate Valves) which were developed specifically for the project. At the time the largest RSGV ever supplied into the UK market, they provided the impetus for AVK to start work on developing DN900 and DN1000 RSGV for other resilience projects across the UK.
Dalmacoulter illustrates the ‘demand pull’ influence of water company resilience projects on new product development and range extension. Early engagement, recognition of manufacturer expertise, and close collaboration created an environment conducive to creativity, innovation and challenge resolution.
Always on
A mantra of AMP7 is ‘always on’, the requirement of water companies to ensure continuity of supply to domestic and commercial customers. This is likely to lead to an increase in the number of network resilience projects to link different elements of the water supply network both intra-regionally - within individual water company regions – inter-regionally – across water company boundaries. These projects provide contractors and product manufacturers with the necessary technical, human, financial and cultural ‘capital’ with an exciting opportunity to contribute to the resilience of the nation’s water and wastewater networks.
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This article was featured in the Institute of Water, Spring 2020 Edition - click here