The challenges posed by climate change and population growth mean we need bold, creative and innovative action to ensure we have reliable access to resilient, affordable water and wastewater services in the future.
We have been changing the way we regulate parts of the sector, to bring benefits to customers, the environment and society. Wastewater sludge transport, treatment, recycling and disposal is one such area. We are calling these activities bioresources services. We want to change the thought process from viewing this as an inconvenient waste produced by treating wastewater, to seeing it as an opportunity. The trading of bioresources could be a real breakthrough – economically and environmentally. By kick-starting this market, we can develop even more low-carbon energy generation and reduce water bills.
PR19 reforms
We expect water companies to think about their own bioresources activities as separate from their other wastewater functions of sewage collection and sewage treatment. At the 2019 Price Review (PR19), we changed the way we regulate to create a separate binding price control for bioresources activities to create greater transparency. This will help to drive more commercial arrangements for how their different activities interact with each other.
Due to the changes we made at PR19, the water companies now receive revenue from customers to safely treat the bioresources they produce but are better incentivised to look for the most efficient option for dealing with bioresources. There is no obligation for the companies to use their own facilities or people to transport, treat, recycle or dispose of these bioresources.
Our Water 2020 document published in May 2016 explains the rationale for why we are promoting markets in bioresources. We will keep the development of the market and our regulatory approach under review.
During PR19, we set up a sludge working group to discuss how we could separate out bioresources from the other water company activities, and also looking at the market information companies should publish. The details of these working group meetings are available on our website.
To help customers understand how much they could pay for bioresources services, we have published each company’s projected average bioresources bill per household over the 2020 to 2025 period[1] on our website.
Other reforms
Following PR19 and our first ‘Bioresources Market Monitoring Report’ we launched our review of the bioresources market on 19 October 2020. The review is a more comprehensive look at the market.
We published our second market monitoring report, which includes an update on our market review on 4 November 2021
We require companies to publish information about their own bioresources treatment facilities which they may want to make available for others to use under commercial arrangements. We published our ‘Bioresources market information direction’ in May 2021 which updated these requirements. Companies market information is available, along with a dashboard we have produced to visualise much of this information.