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Recent changes to legislation on commercial water supply now mean that the UK water market is set to be more competitively priced than ever. Regional utility companies no longer have a monopoly over the water market and 1.2 million businesses and charities are set to benefit. These organisations will be able to choose their supplier based on factors such as
cost per litre and service. Getting to know the new water market at this early stage will allow those businesses which are eligible, to reap the benefits of these historic changes.
What should I know?
Changes to the UK’s water market were set in stone following the Water Act 2014 and from April 2017 the commercial water market across the whole UK was opened for business. Scotland has had a head-start (with deregulation starting in 2008), and businesses have certainly looked elsewhere for their water now that Scottish Water's monopoly no longer
applies. This is hardly surprising as changing water retailer could knock an estimated 15 to 20 percent off the average bill. With more competitive pricing expected in 2019, the potential savings are set to rise. It will certainly be commonplace to change supplier just like we are used to doing with our electricity providers. OFWAT (the water regulator in England) has granted multiple Water Supply licences since the changes in legislation, demonstrating an appetite for retailers to enter the water market and challenge the utility companies for
Director Jonathan Steven provides insight on these recent changes. “It’s a quite extraordinary change to the law whereby statutory water companies - such as United Utilities and Northumbria Water -are now obliged under the legislation to open up their network. “That can involve either allowing new water retailers to buy water at wholesale prices to resell under new brands or setting up new water companies to extract water and supply to other businesses,” he said. “It is not as straightforward as the competition in the electricity market, but it does mean that the established water utility companies no longer have a monopoly,” he added.
What are the commercial opportunities related to these recent changes in legislation?
While businesses may merely wish to change their water company to cut costs or because they are seeking a better service, the opportunity to develop their own supplies from groundwater and thus be able to compete with the utility companies could be highly lucrative. Indeed entering the water industry involves a lot of regulations and monitoring of
supply; however GGS is positioning itself to be the firm that can take the pain out of the process, dealing with everything from test drilling to license agreements.
Jonathan believes that the best way for local businesses to exploit these changes in legislation will not come from buying at wholesale and reselling, but when new supplies are established for a business or group of clustered businesses that use large quantities of water. In these scenarios any excess water could be ‘added to the grid’ and supplied
GGS has already helped established water supplies near Newcastle and Liverpool, but we hope that we can apply over 30 years of experience in the industry to further projects as awareness spreads about the exciting opportunities in the water market.
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