In the bidding market third party providers submit bids to water companies to provide solutions to help it meet their future water needs, as set out in their water resources management plan (WRMPs). The third party providers can be either other water companies or companies from different sectors.
Options can either be on the supply side (such as water trades to provide more water) or on the demand side (such as water efficiency schemes to reduce the use of water). The bidding market enables third parties to provide these options where they are better value solutions than a water companies own options.
As part of our work towards the next price review in 2019 (PR19) we have introduced a number of policies to support the bidding market:
- Company bid assessment frameworks: To support bids, encourage innovative solutions and give confidence to potential third party providers, water companies will publish bid assessment frameworks from 2019. These will set out the policies and processes that will be followed when assessing bids from third parties, ensuring a level playing field and fair treatment. Appendix 9 of our PR19 final methodology set out the principles companies should follow, and once they are submitted we will publish copies on our website here.
- Water resources market information platform: We have required water companies to provide greater visibility and accessibility to existing information, including key assumptions and economic data that underpin their planning and investment processes. This supports third parties in the bidding market to identify opportunities and put forward options. Our October 2017 guidance ensures this is done in a consistent format, and we will signpost to this information on our website here.
These sit alongside our work to encourage greater levels of water trading between water companies. We provide more detail on our policy work to encourage water trading here.