Picking up on a theme from an earlier posting on Inside Track, and to the continued debate between water shortages in the south and over abundance in the north, I always find it amazing how seemingly local news stories can get picked up and distributed around the world.
In the Melbourne Herald Sun article today, Thames Water is (allegedly) thinking of towing icebergs from the Arctic to London to solve the drought. Apparently an iceberg could contain enough water to supply over 400,000 families for a year, although there is no comment on how the water would be delivered to homes!
The light-hearted nature of the article hides a more serious set of issues facing the UK and Europe. The utilities sector is facing massive upheaval and change, forced upon it by environmental and circumstantial reasons. Listing out some of the issues, one could be forgiven for thinking that we are heading into a crisis: Water shortages in the south of the UK, brought about by exceptionally low rainfall, has brought a focus on leakage and usage of this precious resource.
Coupled with this, the need to build thousands of new homes and the construction programmes for the Olympics etc, will further strain existing infrastructure and resources, particularly in the south. The construction of new homes, especially on flood plains, has led to calls for more investment from water companies in flood-relief schemes. Early indications from Ofgem and National Grid that the gas supply and demand position for the winter period will be tight - possibly tighter than the winter just gone - has elevated the debate and construction related to securing gas supply from further afield, with new LNG (liquified natural gas) terminals and gas pipelines.
The pending decommissioning of the existing nuclear power estate in the UK has led to the announcement from politicians that the construction of new nuclear power stations was back on the agenda. Coupled with this, investment in renewable sources, such as wind farms, has sparked (no pun intended) heated local debate in some rural areas over the positioning of turbines.
The shortages in gas, the reduction in storage capacity through maintenance programmes, and the spiralling oil prices, potentially coupled with future interest rate rises, have led to continuing increases in consumer debt. Ultimately, the cost of new pipes for water, new gas supply lines and new power stations has to come from the public (directly through bills or indirectly through taxation). The tremendous investment programme will continue to put a strain on individual finances for years to come.
All is not lost, though. The utility companies are all working on the issues, and ideas such as the towing of icebergs to the UK will undoubtedly be on the list of possible, albeit extreme, solutions. Higher up the list, and more realistically, we are seeing applications for desalination plants and also flood defence schemes; actively constructing new LNG terminals and other gas infrastructure; we are maintaining the storage facilities; we are dusting off and updating plans for execution in case of a gas demand/supply imbalance; and debating and progressing the nuclear/renewable debate.
On consumer debt, utilities are continually considering how best to lower cost-to-serve, including the use of automated and streamlined and outsourced (best of breed) processes.
This overall action programme suggests to me that there are going to be many more stories similar to the iceberg one, where journalists, desperate for copy, pick on the more extreme ideas low down on the list of actions for utilities.
I might be eating my words (or should that be drinking my words?), though, if we do get an iceberg for London.
(Thanks to my colleague Carl Haigney (Utility General Manager here at Xansa) for spotting this one.)
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