As one of the most energy intensive sectors, water utilities face three significant challenges: volatile energy costs, security of power supply, and carbon reduction commitments. Solon Mardapittas, CEO at Powerstar, considers the issues facing water companies and the energy management technologies that can achieve cost savings, power resilience, and sustainability – working for an affordable, secure, and clean UK water supply.
The water industry accounts for around 3% of the country’s energy demand. Rises in energy costs and energy market volatility that looks set to continue for the foreseeable future, combined with media attention and public pressure to improve environmental performance, make it clear that the sector must balance short-term issues of cost and sustainability with longer-term strategies to answer these challenges and futureproof water infrastructure and supply.
Water companies in England have pledged to reach Net Zero operational emissions by 2030, with companies in Scotland and Wales committed to carbon neutrality by 2040. As the fourth most energy intensive sector, reduction in carbon emissions across the water industry would represent a major achievement as part of the UK’s overall Net Zero ambitions. At the same time, where energy accounts for around 20% of operating costs for water companies, there is a strong business case for decarbonisation and energy efficiency – both reputationally and financially.
In their white paper, Water 2050[1], Water UK highlight the business benefits of a focus on sustainability, to address the additional challenges of energy security and cost,
“Increasing operational resilience by deploying renewables — solar and wind generation, coupled with battery storage makes our sites more resilient when power grids fail, meaning water customers remain in supply, and grid operators can focus their attention on other priorities such as asset health. Deploying more of these systems would also protect customers from energy price shocks, as more of the sector’s power would come from our own sources, reducing the link with fossil fuel pricing.”
As the trade association representing British water companies, Water UK are unambiguous in their stance on this balance between costs and sustainability,
“Water companies are committed to protecting customer bills by taking a ‘least cost’ approach to decarbonisation that maximises opportunities to generate new income or improve efficiency.”[2]
They specifically reference the role of deploying on-site renewables in reducing the carbon intensity of operations and infrastructure: working on an energy neutral basis, while exporting clean energy to the Grid. Crucially, the business imperatives as represented by Water UK chime with the regulators’ ethos, where the Net Zero Technology Review[3] for Ofwat examines the decarbonisation hierarchy, concluding,
“Reducing consumption of electricity in the first place is always at the top of this hierarchy. Where electricity use cannot be avoided there should be preference for onsite, behind the meter renewables to materially reduce grid electricity imports with demonstrably additional renewable electricity.”
Focusing on behind-the-meter energy technologies is clearly a win-win for utilities and, given the high energy usage in the water sector, it’s not surprising that Battery Energy Storage Solutions (BESS) are highlighted by sector bodies as a solution to help address the three critical issues: security of supply, affordable energy, and sustainability. Most importantly, for energy security, with a BESS that offers the Uninterrupted Power Supply (UPS) needed in case of any disruption to the Grid, it will ensure operations can continue until either Grid supply resumes or, in the case of longer power outages, until back-up generators can be brought on-stream. Where a water company invests in on-site renewables, a BESS will store energy generated on-site for use when most needed. For a 24/7 operation, this enables the optimum usage of on-site renewable energy alongside the use of Grid power. And, to further reduce costs and cut carbon emissions, Grid supply can be drawn down and stored in the battery when generation is most sustainable and cheapest, for use on-site when Grid energy is at peak cost / peak carbon emissions.
BESS technology ensures that any water company maximises any on-site renewables but, when combined with intelligent energy management and monitoring software – as part of a smart microgrid – there is significant further potential for savings, on energy bills and on emissions. Looking at technology as an enabler in the utility sector – smart grids, maximising renewables in a stable and secure on-site environment, combined with AI-driven energy management data – there are opportunities to achieve the combined demands of cost savings alongside Net Zero ambitions.
For these twin goals to be met, energy intelligence – real-time data, and the capacity to inform and implement energy management goals – is critical. With a BESS installed as a central part of a microgrid, the site can function in island mode, offering the resilience that is critical for water companies in the event of disruption to Grid supply. Intelligent energy management software – the control system – enables the optimum management of renewable energy generated on-site alongside that purchased from the Grid, using advanced algorithms and machine learning techniques to forecast demand and manage the different power sources, seamlessly switching from local to centralised power supply. In their white paper, Water 2050, Water UK highlight the opportunities that innovation must play in meeting the challenges facing the sector,
“With advancements in big data, AI and machine learning, we will be able to unlock valuable insights from this data to help optimise operations and investment, and manage risk.”
Harnessing data through modern energy management software makes for greater energy efficiency, allowing water companies to identify areas of improvement and potential failure points for better asset management and maintenance planning, while also identifying where loads can be shifted to reduce peak time costs. Where companies are looking to switch to Electric Vehicle (EV) fleets, a microgrid can be an invaluable asset, as high-demand charging may place too much stress on the distribution network and potentially be rejected by the Distribution Network Operator (DNO). Here, the capability to manage EV charging through energy generated on-site together with Grid supply stored in the BESS avoids such pitfalls – helping to further sustainability goals.
Ultimately, both the water industry and Ofwat have two clear priorities: delivering environmental impact with greater efficiency, and meeting customer demand for clean, reliable, and affordable water supply. Leveraging local energy sources – on-site renewable energy – with Battery Energy Storage and a smart microgrid with intelligent energy management software, is a compelling solution. As a sector with high energy usage where sites will always have complex energy flows, innovative energy management technology can meet the challenges of reliable, sustainable, and affordable power, helping water companies to deliver on these critical priorities.
To find out more about Powerstar’s cutting-edge technologies and market-leading expertise, contact: W: www.powerstar.com
[1] https://www.water.org.uk/sites/default/files/wp/2022/06/Water-UK-Water-2050-A-White-Paper-3.pdf
[2] https://www.water.org.uk/protecting-environment/climate-change
[3] https://www.ofwat.gov.uk/wp-content/uploads/2022/08/Net_Zero_Technology_Review.pdf