Review of the bioresources market

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 and considers issues such as:

  • the scope for bioresources competition under the current market model
  • the current barriers to competition and the development of the market
  • different forms of competition and market models
  • the steps needed to achieve these market models and overcome any barriers.

The review is informing how we regulate, including our potential approach at PR24. In this page, we provide updates on this work.

In May 2021, we published a consultation setting out our draft findings from our review.

On 4 November 2021, we published our second market monitoring report which includes an update on our market review.

Reforms as a result of our review

Information requirements

In May 2021 we issued an updated direction that requires companies to provide improved market information and market monitoring information. Companies were required to produce this information by the end of July 2021. We have used this information to produce an updated bioresources market dashboard, as well as our second market monitoring report

Cost allocation

In our market review we set out the need to improve cost allocation and the steps we intend to follow to address this. In April 2021 we provided guidance to calculating sludge liquor costs and in October 2021 we provided further guidance on the how energy generation revenues and overheads should be allocated.

Bid assessment framework

Following our consideration of potential market models, we produced draft guidance on 4 November 2021. This consultation closes at 5pm 9 January.

Other changes

Our bioresources market review consultation also proposed changes to how we undertake our cost assessment and establish the outcomes for bioresources at PR24, and how the sector can collaborate in future.

Stakeholder event: Bioresources energy review

This was a stakeholder event hosted by Jacobs on 27 May 2021 with contribution from Ofwat. These were the slides presented.

Stakeholder event: Bioresources market development – Review of progress and findings to date

ADBA presentation – Bioresources market

We gave this presentation at the Anaerobic Digestion and Bioresources Association’s members meeting in April 2021.

Stakeholder event: Bioresources price control

This was a stakeholder event hosted by Ofwat on 9 April 2021. We have published the agenda and slides.

 

Stakeholder event: Bioresources information

This was a stakeholder event hosted by Ofwat on 25 February 2021. We have published the agenda and slides.

 

Stakeholder event: Bioresources market development – Review of progress and findings to date

This was a stakeholder event hosted by Jacobs on 15 January 2021 with an introduction by Ofwat and contribution from the EA. These were the slides.

 

Supplementary Bioresources market information

This was an information request commissioned by Ofwat on 17 December 2020. Sewerage companies were asked to fill out a set template. With water companies’ agreement we are publishing the non-confidential elements of their returns in the table below.

 

 Water company Data Supplementary commentary
Anglian Water Anglian Water data Anglian Water supplementary commentary
Dŵr Cymru Dŵr Cymru data Dŵr Cymru supplementary commentary
Hafren Dyfrdwy Hafren Dyfrdwy data Hafren Dyfrdwy supplementary commentary
Northumbrian Water Northumbrian Water data Northumbrian Water supplementary commentary
Severn Trent Water Severn Trent Water data Severn Trent Water supplementary commentary
South West Water South West Water data South West Water supplementary commentary
Southern Water Southern Water data n/a
Thames Water Thames Water data Thames Water supplementary commentary
United Utilities United Utilities data United Utilities supplementary commentary
Wessex Water Wessex Water data n/a
Yorkshire Water Yorkshire Water data Yorkshire Water supplementary commentary

 

Based on this data, we published this Power BI report:

Please note that our bioresources market information dashboard contains more recent information.