Eighty-four per cent of wastewater sludge now goes to anaerobic digestion (AD) plants to be processed into energy and valuable new materials. What developments lie ahead for the industry?
With continued political uncertainty in the UK and perhaps more to come, it has been a busy start to 2017 for the AD industry, after an especially eventful 2016, and we continue to see good progress in using AD to treat and recycle the UK’s wastewater.
According to the Digest of UK Energy Statistics (DUKES), there are now 187 sites generating energy from sludge, producing green, home-made energy from existing resources. More widely, the number of AD plants in operation across the UK has risen from 424 in late 2015 to 540 at the end of last year. The global wastewater treatment technologies industry predicts exponential growth in the near future, reaching a total value of over £74 billion in 2021.
The busy and varied political environment means that the sector needs to continue its innovative streak to push these impressive statistics even higher with a continued drive to reduce costs, generate renewable energy and create safe, secure recycling routes for sewage. With the World Meteorological Organisation confirming that 2016 was the hottest year on record, and the United Nations warning we are approaching “catastrophic temperatures”, the need to reduce our greenhouse gas emissions through clean energy production has never been more important.
As we look ahead to this year and beyond, there are a number of policy challenges on the horizon for the AD and wastewater sectors. In March, Ofwat published a consultation on its strategic priorities and objectives, exploring how best to secure long-term resilience of services and protect customers from higher bills. Negatively, the consultation asserts that the regulator does not currently have confidence that the industry is planning strategically and says that it is “underachieving”, pointing to a high number of pollution incidents. Here lies a challenge for wastewater companies to plan and invest to meet the needs of consumers and offer best value for money, while demonstrating clearly the progress already being made to tackle the problems highlighted by Ofwat.
A sludge market
Separately, the regulator continues progress towards its Water 2020 strategy for the industry, making changes to the regulatory framework for wholesale markets. The upcoming price review in 2019 (PR19) and the opening of the retail market in England to competition from April will have implications for waste water and AD far into the future, and it is important that the sector engages fully with these proposals to ensure the business voice is heard loud and clear. The regulator’s plans to further develop markets for sludge and encourage collection and processing beyond traditional service area boundaries will also create challenges and opportunities for the sector, making sludge a distinct and visible part of the wastewater value chain and raising consumer awareness of this aspect of their water service provision.
Another issue requiring greater awareness from government is the co-digestion of sludge with food waste. The differences in the regulatory regimes governing sludge and digestate currently present barriers which mean the potential benefits of co-digestion are not being realised, and ADBA will continue to challenge supervisory bodies to think innovatively on how these issues can be addressed.
Looking towards Westminster, the Government continues to progress with its draft Industrial Strategy, following the publication of its Green Paper in January. With its focus on innovative R&D, skills, exports and infrastructure, there is a hugely positive AD story to tell, and water companies should consider responding to the ongoing consultation and engaging with the proposed sector deals, which promise targeted support for those industries demonstrating a powerful case for how their activities can support the Government’s aims. With the forthcoming negotiations on leaving the European Union taking up so much government time, this is a key domestic priority for the sector to rally behind to remind ministers that while Brexit is a key concern, the Government should not lose focus on our economy and supporting our industries at this challenging time.
Given the regulatory and political challenges ahead, it is vitally important that the wastewater sector continues to adapt and grow, and ADBA will continue to work with partners to increase support from politicians and regulators, helping the economic, political and climate change case for investing in AD to become clearer every day.