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New technology adoption will ensure AMP 6 targets are met

07 February 2016

Adoption of new technologies will be instrumental in meeting the new AMP 6 targets, says Jeremy Shinton.

Growing costs of energy, transport, and other 'raw' materials to the water process business mean that water companies will have to look deeper into their souls to gain 'margin' to pay investor dividends.

Add to that the constraints applied by the regulator, which mean that prices can't be increased beyond those agreed on an individual basis with OFWAT, except by applying the ‘K’ factor, allowing the water companies to increase their prices by an agreed percentage over and above the determination value (although this cannot be applied every year).

During the last five years water industries have been busy with the implementation of the capital projects that were agreed as part of their OFWAT submissions. AMP 5 has been mainly concerned with development of new, high-efficiency water and waste water treatment plants and new methods of producing energy from the process as a by-product. This has seen the water companies build various energy plants based on biogas, thermal hydrolysis and sludge incineration.

Many of the water companies are beginning to treat the process like that of a large factory enterprise, with operational equipment effectiveness (OEE) or lean thinking in mind. There are many differences between a water treatment plant and a food or automotive manufacturing business, but there is the same driver and that is to eliminate waste and reduce not just processing costs but overall business costs.

If we consider the seven manufacturing wastes (as defined by Ohno in the Toyota Production System) they are: over production, waiting (by operators and machines), transportation of materials, unnecessary or over complicated processes, excess stock or materials, excess movement by operators and defective products. There are some areas in which the water companies could benefit by stringent analysis of procedures and production to get the best returns from their plant assets.

If we take ‘transportation of materials’ as an example we could apply this to utilisation of tanker transportation which could result in significant cost reduction in fuel bills for the business.

There are many other areas in which lean principles can be applied, such as sludge treatment and optimisation of energy production, intelligent use of maintenance and predictive maintenance, with links to ERP and asset job cards creating an holistic approach to the business needs.

Utilising technology to implement lean strategies will be crucial to generating effective savings. Although a great deal of hype surrounds the terms ‘Internet of things’, ‘M2M’ and ‘big data’, they will be instrumental technologies that all businesses will have to embrace, including those concerned with water supply and waste water treatment. The ease of data flow that these technologies will bring will revolutionise the information available to managers and operators enabling them to model the response of the process network to the weather conditions and the demand requirements.

The water companies are extremely tightly regulated and must provide the government with statistics on how well they are operating, from the extraction of raw water to final delivery to the tap, as well as on collection of waste water through treatment and back to the rivers and reservoirs. This necessitates the need for them to use all of the processes mentioned above, especially as AMP 6 will require the water companies to undertake activities that will extend the life of their plants and apply a TOTEX methodology.

Jeremy Shinton is business solutions manager, Mitsubishi Electric. Mitsubishi Electric assists water companies in their efforts to improve operational efficiency by implementing systems that transform maintenance strategies and ensure plants operate within optimum parameters.

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