Unlocking bioresource market growth

Key information:

Bioresources are organic waste materials with the potential to be repurposed and reused as a result of certain processes. In December 2019, Ofwat established a price control for bioresources, which included guidance for collection, transport, treatment and disposal of sewage sludge and associated by-products. The guidance aimed to stimulate the development of a bioresources market, in which water and sewerage companies and third-party service providers could participate – with benefits to customers and the environment estimated at between £370-1,370m worth of efficiency improvements. 

Despite this great potential for bioresources to be used to help water companies meet net zero targets, up until relatively recently, this hadn’t been the case. To address this, Anglian Water worked with four companies to develop a planning platform to accelerate collaboration on strategies around bioresource potential and use. 

Unlocking bioresource market growth is an Ofwat Innovation Fund project that aimed to provide water and sewerage companies with the support necessary to overcome existing barriers and unlock benefits of these markets. The platform sought to identify opportunities for companies to trade existing bioresources and determine the best potential outcomes of future investments, helping to tackle common challenges and in so doing, minimise environmental impact of the resources, while improving customer value. 

The project sought to provide an indication of capital cost, highlighting potential impact on operational cost savings, carbon reduction and increased resilience, and demonstrating the potential effect of better managing these bioresources.  

By integrating bioresource value chains (the full lifecycle of the bioresource) from Anglian Water and four other water and sewerage companies into a single platform, these objectives were achieved. As a result, this resource can capture the equivalent of around 50% of the total sludge production for England and Wales (Bioresources market information – Ofwat). 

The project did this through use of an AI-driven platform (Decisio) to create a dashboard that modelled various scenarios, including potential implementation of carbon penalties and biomethane incentives. 

From the modelling undertaken, key insights include: 

• Data availability needs to be improved –  high level assumptions had to be made depending on what was publicly available, but more could be done. 
• We need to make use of current networks – Optimisation of current networks has a significant impact – the platform creates an ideal solution which guides decision making and does not consider operational necessities. 
• Short-term collaboration is valuable – future demand can be met through the sharing of capacity through cross-border trading. 
• But long-term collaboration creates more robust networks – open networks show better resilience to potential future changes. 
• Consider regulatory changes –the current technology could be affected by a change in availability of landbanks (large areas of land used for disposal), affecting cost of service. 
• Multiple routes available – the bioresources sector has great potential to be decarbonised through various schemes. 
• Wider stakeholder involvement – inclusion of wider stakeholders can improve the scope for opportunities.  

More information on the project can be found on the BMA website here, where you are also able explore the interactive dashboard. 

The next step for the project is to expand on the modelling by including the other neighbouring water and sewerage companies on the platform. The team are also working to align the project with outputs from a separate piece of work; the National Bioresources Strategy –  a 25-year strategy for the sector that is due to be published imminently.