logo footer October 31, 2022

The race to net zero: UK water utilities set the pace, now it’s time to accelerate

Nearly two years ago, water utilities in the UK unveiled an ambitious plan to deliver a net zero water supply for customers by 2030 – the first sector-wide commitment of its kind in the world. Here, we explore the factors that have made the approach successful and what other water utilities can learn to help accelerate their pathway to net zero.

When the Water UK Net Zero 2030 Routemap was launched in 2020, it was estimated that it could save 10 million tons of greenhouse gas emissions (GHG) by 2050 – putting the sector two decades ahead of the country’s broader net zero deadlines. Considering that water companies produce almost a third of UK industrial and waste process emissions – it was encouraging to see utilities acting so decisively and proactively.

What makes the UK approach so unique, however, is that it seeks to harness the power of collaboration; bringing together the entire national water sector in sharing knowledge and learning, technology, and systems to maximize the climate impact. It’s an unprecedented step forward that should be emulated in other regions. However, only 81 water utility companies globally have since committed to achieving net zero or carbon neutrality by 2050, including 23 in Australia and the UK’s 13.

According to the last published IPCC report, we have just 10 years to act. The current ambition to limit warming to ~1.5°C (2.7°F) requires a 43% emissions reduction by 2030. To reach that goal, the water sector needs to be able to at least halve its emissions while also making the necessary investments in system resiliency to mitigate the expected impacts of climate change.

With so little time to move and utilities already experiencing investment constraints, it begs the question of what we can learn from the example set in the UK and how most water utilities around the world can accelerate their journey to net zero.

Sector-wide collaboration has a multiplier effect

Knowing the scale of the net zero challenge and the fact that the sector has historically been slow to change, it’s clear that major water players will need to collaborate at both a national and global level. Leaders in the UK recognized that a collaborative approach was required and have acted on it; sharing study results across most utilities and working with regulators to support investments. This is what sets this example apart.

The UK’s collaborative approach has resulted in the exploration of a wide variety of solutions to progress toward net zero – around two dozen actions in total. The actions span all three types of emissions including Scope 1 (direct emissions from the company’s owned or controlled operations), Scope 2 (indirect emissions from purchased energy) and Scope 3 (indirect emissions resulting from assets not owned or controlled by the organization but that the organization indirectly impacts in its value chain).

These actions are detailed in the chart below.

By exploring several different pathways, the UK utilities are helping to validate the effectiveness, impact, and implementation costs of new and existing solutions – which is key to encouraging others to adopt similar measures, more cost-effectively.

Our analysis reveals the preferred measures adopted so far by UK utilities have skewed toward actions that are either the most operationally ready, require the lowest capital investment, or have the potential to result in other cost savings – with most focusing on reducing Scope 1 or 2 emissions. For example, 100% of UK utilities already invested in leakage and NRW reduction as it reduces both energy costs and emissions. They are also all using alternative renewable energy sources and ~93% have adopted or are trialing green fuel alternatives.

Regardless of the specific action explored, sharing data about these initiatives is critical, particularly in terms of understanding success in terms of the costs relative to the CO2 impact. This is a metric that few studies publicly highlight at present but one that is essential for prioritizing initiatives to be implemented towards net zero goals.

Typically, only the largest utilities can afford to embark on dedicated, detailed studies to assess the potential cost and impact of new solutions and to prioritize key initiatives, with the support of leading consulting engineers. That leaves most utilities, especially the numerous small to medium size utilities, with little data to support their decision-making process on where to start, especially as they have limited financial resources to support the transition.

Fortunately, new tools are being developed to help utilities identify areas for reducing greenhouse gas emissions, while increasing energy savings and reducing costs. ECAM (Energy Performance and Carbon Emissions Assessment and Monitoring) is a free, open-source web application developed by the International Water Association (IWA) & the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) to assess utilities’ greenhouse gas emissions and energy consumption. The tool allows users to compare utilities’ emissions over time and provides a starting point for improved sustainability. The IWA is seeking partners to continue improving this tool and further developing the guidance for utilities.

Exploring new business models and sources of revenue

The variety of actions explored also demonstrates a shift in perspective – with leaders starting to view net zero as a strategic opportunity to realize transformative change – instead of a regulation with which they need to be compliant. In particular, it is promising that actions aimed at reducing Scope 3 emissions are included in about half the plans; to comply with evolving international standards, drive transformation across the whole supply chain, and provide new sources of revenue for water utilities to support their transition.

However, only a few utilities are pursuing opportunities to think beyond their primary mission of delivering water. For example, only one UK utility is targeting the potential of biochar production and algae growth for renewable energy production. While it is reasonable for utilities to begin by focusing on direct emissions and to prioritize solutions relating to their core business, they may be missing out on new revenue sources that lie at the intersections between water, energy provision, food security, carbon capture, and biodiversity.

With the price of water limiting utilities’ ability to generate additional revenue from traditional sources, it is more critical than ever to explore the potential to be a ‘multi-purpose utility’ and take inspiration from the circular economy to diversify source of revenues.

Looking ahead

The increasing frequency and intensity of climate change impacts – from water scarcity to severe weather events – will challenge water utilities in their short-term investment prioritization to achieve net zero goals.

The UK’s focus on sharing learnings at scale should be a source of inspiration for the global water sector, which needs to accelerate the pace of innovation adoption if it is going to meet the challenges ahead. At the local level, that means implementing the initiatives shown to have the largest and fastest impacts – not necessarily the newest or most ‘disruptive’.

As the price of water remains a constraint for investment, utilities must seek out efficiencies as they develop new sources of revenue. We need to amplify collaboration across several utilities, scale trials and encourage results sharing – all at the international level – to support utilities in identifying the most cost-effective and proven measures. This is how we can support the transition of thousands of water utilities worldwide.



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