Changes to Sludge Treatment Regulation in the U.K.: How to Maximize the New Opportunities

The water industry’s economic regulator for England and Wales, Ofwat, is creating opportunities for more competition and efficiency in sludge treatment in the U.K. In this white paper, Jacobs investigates how the industry is responding and considers ways to increase uptake of market-based solutions.

Ofwat has separated sewage sludge-related activities into a separate ‘bioresources’ price control with total forecast expenditure of £3.5 billion ($4.3 billion USD) between 2020 and 2025. Separating bioresources revenues out brings the sector under detailed scrutiny and has laid the groundwork to encourage water companies to develop new, more efficient ways of running their energy and fertilizer production lines, as well as to develop and access new bioresources markets for the delivery of efficient services.

The overall aim is to make these business areas innovate commercially and technically to bring costs down for their customers. There are certainly lots of potential opportunities for new market services across the sector, but the new allowances for these bioresources businesses also bring their challenges. This may or may not provide long-term customer value.

Development of new market solutions currently appears to be slow. In this white paper we consider some of the factors affecting the development of markets and outline some options for the industry to accelerate the advancement so that they can better meet customers’ needs.