MPs hear a case for system operator

The introduction of a system operator in water “is an idea whose time has come,” director of regulation at Affinity Water, Chris Offer recently told an all party group of MPs.

Offer (pictured) told the All Party Parliamentary Water Group the introduction of a a system operator to manage the transportation and balancing of water in the South East “will help to make sure we only invest what is needed and so should unlock the door to long-term investment that some would argue has been postponed as a result of the existing five-year price regime that focuses on individual company plans as opposed to regional solutions.” He highlighted the so called trilemma of cost, security of supply, and environmental impact that the water sector must address when forming decisions to invest in water resources.

Offer reminded the MPs that Water UK’s Water Resources Long-term Planning Framework showed that in the South East will need up to a 40% of supply increases by 2040. This, he said, meant “ultimately a new reservoir and other strategic infrastructure that supplies the South East will be needed.” But he went on to says the timing of the investment was uncertain.

Offer sketched out how a system operator might function as:

  • initially it would concentrate on the use of all available resources between water companies and other suppliers and coordinate longer term requirements of the companies;

  • it would bring on efficient multilateral trading and, over time, possibly extend to seasonal, weekly and even daily optimisation of resources between suppliers;

  • it would not necessarily have to own assets it could simply be the coordinating body that identifies the need for the asset;

  • – it might identify the needs and availability of the water resources in the East and South East and determine a regional hub to be the most effective and efficient solution way to counter water scarcity so individual companies would then decide how best to provide the infrastructure and the asset ownership; and

  • it could provide these assets through a direct procurement model as in use to deliver the Thames Tideway.