Why we need a blueprint for Tomorrow’s World

Stine Wilhelmsen, Common Vision Energy and Water Millennial Working Group

What will citizens need and want from future energy and water systems, and what changes are required for their expectations to be met?

This heading set the scene for ‘Tomorrow’s World’ – a one day workshop jointly led by Sustainability First and the National Infrastructure Commission – in which the speakers did their best to set the scene despite the plethora of known unknown clouding the horizon. What will the regulatory landscape look like post-Brexit? In what ways will smart technology continue to revolutionize the utilities industry? How will climate change impact our water and energy security?

When Common Vision invited me to come along to the workshop I was intrigued by the opportunity to hear how representatives from the water and energy sector, regulators, and organisations representing rural communities, low-income households, and the older generation viewed future opportunities and challenges.

Minutes into the first panel, I was struck by the fact that there’s no one-size-fits-all solution for future energy and water demands. People will continue to need and want different things, depending on where and how they live. Whereas millennials growing up in the digital era might get excited about the premise of smart technology controlling their heating, a pensioner could get equally worried about the demise of familiar services. To avoid leaving anyone behind the water and energy industry needs to provide affordable, tailored solutions for all pockets of society.

Generation rent

This rings equally true for initiatives aiming at engaging people in reducing water and energy consumption – a vital aspect of meeting carbon emissions targets. Campaigns encouraging people to invest in energy and water efficiency measures such as insulation is likely to fall flat on an audience of Generation Rent-ers used to moving house every 6 – 12 months.

As an additional 1.8 million households joins the pool of private renters by 2025, finding ways to a) support renters in making their rented properties more energy and water efficient, and b) incentivising landlords to invest in long-term solutions, becomes increasingly important.

The muggy minefield of renting means that many tenants will be deterred from investing in efficiency measures. Even in our group discussion we were unsure about what rights renters had when it came to switching energy providers, or installing a water meter. By 2025, more than half of 20 – 39 year olds will be faced with this issue.

Considering that 90% of households will still be older properties in 2030, the government and the industry should both take responsibility for informing renters of their rights and incentivising landlords to improve the energy and water efficiency of properties.

A millennial perspective

Despite the improbability of ever owning a property, all is not lost for the millennial generation. As the first generation to grow up as digital natives we’re more likely to accept new technological solutions such as smart meters and appliances. This technology bears promise of more personalised services and more efficient use of resources.  In fact, energy demand has fallen by 7% in the last decade, despite population growth. This is promising news for a generation faced with the looming threat of climate change’s impact energy and water security.

This brings me to the third take-away from the day. It is predicted that we’ll see an average temperature rise of 2°C in SE England by 2040 if emissions are not reduced. This means more unpredictable weather; wetter winters, drier summers, as well as increased risk of flooding, drought and heat waves. With this in mind, we need industry leaders to present blueprints for a decarbonised, secure energy and water sector, or plans for innovative behaviour change campaigns. The speakers at the ‘Tomorrow’s World’ workshop did a good job of painting a picture of the challenges ahead, but we still have a way to go in finding solutions to these.

Luckily, there’s loads of simple things we can all do to become a more “ideal” energy and water household, while we wait for the industry and regulators to come up with solutions.

Here’s the 3 things I’ll start with so please join me in shaping tomorrow’s world:

  • Be smarter. Luckily, we’re all responsible for the energy we use in our homes. Figures such as 150 litres of water per day, or 34.82 MWh (3 tonnes of oil equivalent) of energy per year, can be hard to comprehend, but what’s worth remembering is using less energy and water can be fun, simple and save you both money and time. Go through your daily routine & choose some hacks that works for you. This might be ordering a free water saving shower head from your water supplier or switching your lightbulbs to LED. A quick Google will lead you to loads of tips, or get started at waterwise.co.uk or www.energysavingtrust.org.uk.
  • Make the switch to a green energy provider. Even if you’re renting this is super simple, and can help save you money too. There are several 100% renewable energy providers out there, including Good Energy, Ecotricity and Bulb. Visit thebigdeal.com to find out more.
  • In line with the ethos of “Tomorrow’s World” workshop, a solution shared, is a solution doubled, so speak to your flatmates, friends, family, and get them involved in curbing their water and energy use.

 Sustainability First has produced a consumer focused check-list for change for use by energy and water companies, regulators and Government when engaging with stakeholders and planning future services.  The check-list,  ‘Tomorrow’s World for Energy and Water: What will consumers and citizens want in 2030?’  is now available on the Sustainability First website.  Two Common Vision videos from the Tomorrow’s World Workshop can also be viewed from the website: ‘Energy and water in 2030: Different groups and different needs’; and ‘Building citizens awareness of energy and water: A view from millennials’.

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Tomorrow’s World: A sustainable future for the next generation?

Rachel Taylor, Common Vision

What do customers and citizens need and want from future energy and water systems, and what changes are required for their expectations to be met? This was the topic of an event hosted by Sustainability first and the National Infrastructure Commission in July 2017, for which Common Vision convened a “millennial working group” to participate.

To ensure that we are able to continue using energy and water which meets our evolving needs and requires minimal lifestyle changes by 2030, we must begin enacting change now. These sustainable alternatives must take into account the challenges posed population growth, an aging population and climate change – to name a few examples.

Our energy and water systems provide us with the essentials we use and need in our everyday lives, from powering our mobile phones and heating to our showers, baths and drinking water. The provision of energy and water affects all groups in society regardless of background, income or age bracket yet, different groups do have different needs; all of which must be addressed when designing our plan for the future.

For low-income groups, the so-called ‘poverty premium’ is a major concern whereby the poorest in our society often end up paying more than higher-income households for essential goods and services. It is not surprising then that the primary needs for low-income groups were affordability and tariff consistency. Organisations such as the Joseph Rowntree Foundation have been active in this area, calling on the government to do more to help identify and tackle poverty premiums where they arise, especially in light of forecasted inflation. The elderly, as well as those living in rural areas across the UK, have in some cases also fallen victim to the poverty premium if, for example, they are not online and lack the means to acquire the information which would help them explore cheaper or greener options. This clearly demonstrated the need for better information provision, both online and offline, for these affected groups.

As well as this, the increasing life expectancy of the elderly population in the UK is indeed a cause for celebration but it also brings challenges which require us to ensure our future world is adaptable to the physical and mental ailments of this group. We must also not forget that those living in the countryside are the ones often subjected to the impact of new infrastructure developments which need its extra space. It is therefore important to listen to the insights and needs of this group in designing non-intrusive alternatives for the future.

Amongst these different views and voices, what perspectives do millennials bring to the table? Millennials are not only the leaders of tomorrow, but are increasingly, the leaders of today which leaves them with a critical role in shaping the future of energy and water. Not only will they be consumers but will also be leading energy and water companies and systems going forwards. The priorities of our millennial group for in designing these future systems were centred around sustainability, affordability and capacity.

Firstly, millennials are seen as being more environmentally conscious and driven by their personal values when it comes to making choices about utility providers, purchasing certain brands and choosing an employer. This is where in catering to the needs of millennials, energy and water companies can make gains in terms of business benefits.

Secondly, affordability is an issue for many young millennials who are still finding and settling into their careers or living in expensive cities with high rents. Exacerbating this, research suggests that millennials are earning less than the previous generation, an unprecedented trend. Considering these factors, it is important that we ensure there is not a trade-off between sustainability and affordability in choosing a utility provider especially where the common goal is to work towards a more sustainable world.

Thirdly, a common theme which emerged throughout our discussions was the capacity for millennials to act upon their environmentally-friendly values. The high instances of renting among this cohort was cited as the biggest barrier. In a society with increasing costs of living, inflated house prices and lagging wages and job opportunities, getting a foot on the housing ladder has become an impossibility for some. At least, it is not as easy a task as it was for their parents’ generation. This has led to the creation of ‘Generation Rent’ and the number of people under the age of 40 living in rented accommodation is only expected to continue increasing between now and 2025. Those living in rented accommodation have a lot less freedom and incentive to invest in energy and water saving measures such as installing smart meters, insulation, solar panels or low-flow water fixtures. In addition, and is especially the case for many student properties, in flats or houses where bills are included in the price of rent, it is likely the tenants will not even be aware of their provider much less have the motivation to investigate the sustainability policies of these providers. It is unlikely that ‘Generation Rent’ will transform into ‘Generation Buy’ any time soon, therefore, a possible solution to this could be to create incentives for landlords to ensure their rented properties meet certain standards. Undoubtedly, implementation of this would require the attention of policy-makers and the introduction of new government legislation and regulations.

Aside from this, for millennials, choice and trust were also important. This requires better information provision from both suppliers and government as well as being reliable and actively responding to the needs and values of the consumer.

In addressing the needs of all groups, there appeared to be space for collaboration between sectors in ensuring consumers have access to affordable, sustainable and user-friendly services. Meanwhile, technology has also begun to play a role in innovating the way we use and consume energy and water from smart meters to local level initiatives. However, there is still a long way to go in ensuring that the provision and levels of consumption of energy and water are future-proofed and respond to the needs and expectations of our diverse society. To ensure this journey continues, we must engage and respond to the needs of all sections of society from poorest to the richest, urban inhabitants to rural inhabitants, the old and the young.

Sustainability First has produced a consumer focused check-list for change for use by energy and water companies, regulators and Government when engaging with stakeholders and planning future services.  The check-list,  ‘Tomorrow’s World for Energy and Water: What will consumers and citizens want in 2030?’  is now available on the Sustainability First website.  Two Common Vision videos from the Tomorrow’s World Workshop can also be viewed from the website: ‘Energy and water in 2030: Different groups and different needs’; and ‘Building citizens awareness of energy and water: A view from millennials’.

Martin Cave speaks on fairness in energy pricing at Gill Owen Memorial Lecture

Sustainability First organised a memorial lecture on 17 July 2017 In memory of Gill Owen. The lecture was given by Prof Martin Cave OBE, a former Warwick Business School colleague of Gill. Martin’s very fitting, and highly topical, lecture subject was ‘Distributional and Competition Aspects of Energy Pricing’.

Starting from the essential nature of energy for households, the fact that energy accounts for a larger proportion of expenditure for poorer than for richer households and the estimate of detriment identified in the recent CMA investigation, he described a methodology for approaching distributional fairness.  He then went on to consider how innovation and smart meters could help vulnerable customers and to discuss responses to the CMA investigation, including proposals for demand-side remedies and price caps.

An internationally renowned economist, Martin specialises in competition law and the regulation of network industries, especially the communications sector. He is currently a visiting professor at Imperial College Business School and is also a member of the UK Competition and Markets Authority.

As many people commented at the event, the topic would have been close to Gill’s heart and she would have enjoyed immensely debating the issues with Martin.

Sarah Harrison, a Sustainability First Trustee and former Senior Partner at Ofgem responded to the lecture.

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Market magic in the energy and water sectors: all that glitters is not gold

Sustainability First’s New Energy and Water Public Interest Network (New-Pin) has been exploring how far market-led approaches can deliver our desired long-term public interest outcomes in energy and water.  Sharon Darcy shares some of the thinking from the recent New-Pin workshop on this topic.  Although energy and water are at different ‘moments’ in terms of their experience with markets, many of the lessons from the workshop are generic across the sectors.

Markets can deliver many benefits – they can reveal new information and bring in new skills and partners leading to innovation, efficiency, and more responsive and flexible services.  However, they are not risk free.  Markets by their very nature create winners and losers; whether this is individuals (who may or may not be vulnerable) who are expensive to serve and therefore less likely to be targeted by marketing departments or companies that in a dynamic competitive environment may quickly find themselves with stranded assets.

The New-Pin Network has identified six possible desired long-term public interest outcomes for the energy and water sectors: value for money; quality services; cleanliness; resilience; ‘place;’ and fairness.  Market-led approaches can deliver against most of these outcomes but not necessarily all of them.  And even when they can be beneficial, in these sectors, along with many others, they need clear frameworks and rules if their effectiveness is to maximised.

Working out how to capture the beneficial ‘magic’ of markets whilst also being prepared for the potential pitfalls requires clear thinking and careful communication. Given the fact that markets are unlikely to emerge spontaneously in these sectors, and will require some degree of oversight and planning, it is clearly important that market-led approaches are focused where there is a need, and opportunity, to do things differently.  Being clear about whether there is a case for change (such as new technologies coming on stream), and if there is consensus that there is a problem and what the possible solution is, is a first step.

Focusing market-led approaches where the net benefits are greatest is also important.  Although markets can have beneficial ‘trickle down’ and indeed ‘trickle up’ impacts, and can drive wider behaviour change across the sectors, not all ‘knock-on’ impacts will necessarily be beneficial.  And introducing market-led approaches can be tremendously time-consuming.  There is likely to be an opportunity cost involved.  Paying heed to where the greatest costs in the sectors lie would seem sensible when deciding where to target activity.

All too often, discussions about markets get stuck on questions of competition in the market and giving individual consumers the choice of providers.   There are clearly a far wider range of market-led approaches available in the sectors than the opportunity to switch suppliers.  These include competition for the market (such as auctions) – as well as approaches that enable local co-operation and collaboration.  Choosing the right mix of approaches to deal with each part of the value chain, whilst recognising the environmental and social externalities and systemic risks in the sectors, is important.

Markets struggle to deliver fairness and ‘place.’  It is therefore vital that policy makers and regulators are clear about what they will do about winners and losers in advance of introducing change.  The sectors, after all, provide essential services with very limited substitutes.  Understanding whether they will put protections in place up front, or only once problems emerge, can help manage expectations and enable all stakeholders prepare for change.

In the end, however, part of the magic of markets is that they are dynamic – a journey.  As no one knows what the final destination will be, building consensus on the rules of the road up front, and how to respond to the ‘bumps’ along the way as they emerge, is essential.  Stakeholders need to agree what the red lines and risk tolerances are and what they will do when events happen.

Lastly, in order to maintain public trust in a changing market environment, it is important to engage those that will impacted on how you will monitor behaviour, enforce rules and explain decisions.  Communicating why you are doing things – even if it is a decision not to intervene – is vital for such essential services.  Learning the lessons from market-led approaches and transparently sharing these insights not only helps refine future approaches but crucially also builds public confidence and hence reduces political risk.

A detailed slide deck providing information on the theory and practice of market-led approaches in the sectors, different perspectives on the issue and spider diagrams illustrating how far market approaches can deliver on our long-term public interest outcomes is available here on the Sustainability First web site.

Being fair to ‘sticky’ energy customers – both now and in a ‘smarter’ future

Thursday’s backbench Commons debate on energy prices has prompted politicians and others to consider a number of possible alternatives to the remedies made by the Competition and Markets Authority (CMA), following their investigation last year into electricity and gas prices.  Around 70% of domestic energy customers remain on energy companies’ Standard Variable tariffs (SVTs) and could save up to £200 by switching to a cheaper deal, but nevertheless decline to switch.  In a new Sustainability First paper, I have argued that any potential solution to customer ‘stickiness’ needs to be measured against two key objectives  designed to ensure that any remedy adopted is fair to all customers.  My two ‘tests’ are:  (1) that the arrangements encourage companies to price competitively and to innovate to meet the changing needs of the market, and also (2) that they avoid particularly unfair pricing for any domestic customer or group of customers.

The CMA remedies broadly deliver on the first of my two objectives by removing some previous barriers to increased tariff innovation. But the CMA only delivers on the second to the limited extent of providing protection through a price cap to customers on prepayment meters.  For the roughly 50% of households that are able to engage in principle – but for whatever reason choose not to – the main CMA remedy is to provide those customers with more information about energy pricing and switching.  The CMA does not seem to have looked across to thinking from the Financial Conduct Authority, who recently said, in its Future Mission Statement:

‘Public policy makers have traditionally assumed that people will make the ‘right’ choice for their needs if they are given as much information as possible… Our own research has also shown that that too much information can confuse consumers’.

Customers are being encouraged by the Government and regulators to become more engaged not just in their energy bills, but in choosing their retail bank and making financial provision for their retirement, to mention just two.  But is this the right approach?  Each of these activities takes time and effort, and many people will want a ‘good enough’ solution, not necessarily the absolute best.  If people choose not to make the effort, does this mean we leave them to the consequences of their inaction, particularly where essential services are concerned? Or do we seek to avoid anyone being particularly unfairly treated or exploited?  This is why both of my key objectives are important  – both to encourage competitive pricing and to avoid unfairness.

None of the  solutions proposed so far to tackle customer ‘stickiness’ – either by the CMA or others –  fully meet my two objectives.  One that seems to me to come closest, assuming there are no radical changes in current market arrangements, is in two parts.  First, as proposed by Dieter Helm, energy suppliers offering an SVT should make public for scrutiny by customer watchdogs and other commentators the margin they anticipate making on it.  This would seek to deter companies offering cheap deals to engaged customers at the expense of those on the SVT.  Second, the evidence suggests that in reality many customers actually prefer an SVT and, if switching, would opt for their new supplier’s SVT.  But, in contrast to switching to a 12-month fixed price deal, no price protection is afforded in moving to a new SVT.  As we have seen in recent weeks,  price increases by one energy company tend to be followed fairly quickly by the others. It is possible for a customer to get caught out by switching to a company that has not yet put up its price but is about to.  In my paper, I therefore suggest that price comparison sites should also start to include the date on which the SVT was last changed.  Although far from perfect, it may, by  requiring transparent information on the last price increase, at the very least offer the consumer bodies some insight into whether a new price increase might be in the offing – and so might help confidence in the switching process.

There are also lessons for the future.  The Government’s plans for a new ‘smart’ energy world with smart meters and greater customer flexibility assumes that customers will respond to better information and greater price differentiation by changing their energy purchasing and usage patterns in response to time-of-use or other ‘smart’ tariffs.  If the experience of stickiness in today’s domestic energy market is anything to go by, this could be a hard sell with many customers.  More research is needed on the likely response of typical customers, and not just the enthusiastic minority.

The Sustainability First discussion paper – “Engaged, or just good friends? – An exploration of retail electricity and gas pricing and ‘sticky customers’” –  is available on the publications page of our website – www.sustainabilityfirst.org.uk.

Jon Bird
Associate, Sustainability First

 

 

It’s time to talk: why GB household demand-side flexibility needs a high-level standing group

For the past two years Sustainability First has provided support for a major demand-side initiative, designed to encourage industrial and commercial (I&C) customers to understand more about the opportunities that their flexibility could unlock and how to set about it: whether to save money from active peak avoidance, or to earn potential new revenues if they can successfully offer services to the GB balancing or capacity markets. From time to time, business customers might be paid to export generation or to flex their power off-take to respond to the wider needs of the overall power system.

Power Responsive is a collaborative effort led by National Grid for I&C electricity customers to raise awareness, improve understanding and support development of sustainable markets for GB demand-side flexibility. The initiative is delivering a systematic work programme alongside active outreach to business customers, coordinated by a steering group whose main task is to get to grips with the major enablers and blockers for future demand-side market development:

  • What factors will drive forward market development?
  • From a customer viewpoint, what still stands in the way of successful demand-side delivery for GB ?

The group is high-level but also has the experience to flag up potential problems and to anticipate developments, focusing on matters that risk stalling wider development of GB flexibility markets before these get the chance to grow, including potential issues of trust and reputation. The group draws from a mix of market actors – retailers, aggregators, brokers, networks, the system operator – together with I&C customer representatives, including distributed generators and storage operators, and Ofgem and BEIS. The group’s job is to take a strategic look out to 2025 at what demand-side success might look like – both for the market and for industry customers. The group does not shy away from difficult or complex topics. There is a strong focus on landing outcomes and on delivery.

One important output has been the Power Responsive annual report for 2016, just published, written for the group by Sustainability First. The report offers a good overview of the current patchwork that makes up the GB demand-side flexibility markets and a useful snap-shot of the current views of both market actors and I&C customers. There is also a good ‘state-of-the-market’ infographic.

But perhaps most important, the simple fact that a group was charged with looking right across the demand-side markets for I&C customers meant that it was possible to start a productive conversation about metrics needed for these markets:

  • How to judge success?
  • How to base-line the state of demand-side markets today?
  • How to begin to assess market progress year-on-year?
  • What data is already collected? Is it comparable?
  • What analysis is already produced and published?
  • Where are the gaps in data, analysis and knowledge for future years?
  • What is the best way to tackle this going forward?
  • And, importantly, who to lead and how best to coordinate?

And so, a main conclusion must be that it can be ‘good to talk’. A constructive start has been made for the I&C customer side. But strangely, and despite rapid developments on smart meters and the burgeoning home control market, there are no current plans for an equivalent cross-industry and consumer forum for small customer and household flexibility. Why not?

Sustainability First is convinced that it is time to join the dots at a high level for the household sector too. In our response to the recent BEIS smart energy call for evidence, we pointed out that there is an unmet and current need for a high-level standing group able to look at household flexibility and the GB household demand-side in the round. Current work on household and small-customer flexibility has an inevitable focus on detailed ‘process’, organised in separate work-streams. Of course this is necessary and important (half-hourly settlement, smart meter roll-out etc). But, there is a significant gap in looking across the board – including at wider outcomes, whether intended or unintended. The aim would be to ensure coherence and consistency of approach, early warning on unexpected outcomes, to improve consensus, and to achieve a degree of common understanding across the many different actors, interests and complexities.

This is not to suggest that development of a flexible household demand-side should not be market-led. Rather, that the complexity and scope for sub-optimal and / or unexpected outcomes is significant. The potential for reputational problems are major – even from just a handful of ill-judged or mis-sold products or schemes.

 Any such group would need strong BEIS and Ofgem involvement. Because its main focus would be households, including energy customers in vulnerable circumstances, it would need appropriate consumer representation, and this may need resourcing in some way.

Sustainability First’s initial ‘menu’ of topics – based on our current and former research – and where high-level thinking is needed over a sustained period includes the following:

  • Future tariffs: implications of half-hourly settlement and cost-reflection, principles of ‘fairness’,  retailer responses including cherry-picking, choice, approaches to price comparisons.
  • Customer safeguards and protections: unexpected bills, ‘lock-in’ to kit or other sales (e.g. connected home), multi-utility models, pre-pay, debt calibration, third-party actor roles – aggregators, brokers.
  • Community & local flexibility schemes: group approaches to supply, supply licence requirements.
  • Smart appliances: requirements (if any), standardisation, avoiding proprietary set-up.
  • Privacy: customer consents on use of their data.
  • Cyber security: smart meters, smart appliances etc – minimising customer and system risk?
  • Export metering: future metering requirements for PV, storage
  • Trials: probing knowledge gaps, institutional and regulatory barriers, customer outcomes
  • Customers in vulnerable circumstances: whether and how demand-side flexibility might serve such customers well.

Sustainability First’s long-standing experience on household ‘smart’ energy tells us that such a group would add up to more than a sum of its parts. It would help focus hard on the major barriers and could resolve problems in a collaborative way to ensure a better implementation / transition to household demand-side flexibility.

The pace of change for household energy customers is set to quicken. As household flexibility markets start to evolve and to grow, it is in everybody’s interests that customer outcomes are beneficial and positive. We look forward to the BEIS / Ofgem Smart Systems Plan due this spring. We hope that it will include a clear recognition that it is now ‘time to talk’.

Judith Ward
Director, Sustainability First

Civic pride, the public interest and paying the bills: what does fairness look like for our water supplies?

On hot, sultry summer evenings tourists unsurprisingly flock around the Trevi Fountain in Rome.  There is no better place to enjoy the beauty of the city, an Italian ice cream and dream.  Whilst throwing coins into the Fountain, what few may realise is that the water they are looking at is being transported through an ancient Roman aqueduct. Infrastructure that the far-sighted Romans recognised could help provide one of the foundations for the prosperity of the city  – and indeed empire – for generations to come.

From fine art and the flowing waters in Rome, take an about turn and move on literally to what was London’s dirtiest hour: the Great Stink of 1858.  Sewage on the banks of the Thames had accumulated to such an extent that cholera outbreaks were rife and thousands were dying.  Step forward one of the greatest of the Victorians, Joseph Bazalgette.

Joseph, London’s Metropolitan Board of Work’s Chief Engineer, realised something needed to be done – and at scale.  He designed London’s sewer network, in the process reducing the risk of future cholera outbreaks and cleaning the water in the Thames.  His vision was such that he ensured that the diameter of the sewer pipes being built was considerably wider than what was needed at the time.  This enabled the network to accommodate the extra demands of the growing city and keep the river clean – without the need for digging up roads and knocking down buildings to build more pipes.

As these examples illustrate, the benefits of any new water related investment extend beyond the individuals that use it to wider society and can often be enjoyed both today and way into the future.  Having a long-term vision for such as essential service that can deliver multiple benefits, along with civic pride, would therefore seem important.

But here’s the rub. The future is uncertain.  No one knows exactly how much water will be needed in the years to come, where it will be needed and whether new technologies will emerge that will change the way it is delivered and used.  In addition, the coming generations that may benefit from such far-sighted investments and infrastructure aren’t around to speak up.

At the same time, those who currently use the services, and are likely to be expected to pay for future investments, may already be having problems in terms of paying today’s bills.  A sobering one in eight households across England and Wales currently struggle to be able to afford to pay for their water.  For many, the current system looks far from fair.

This presents policy makers and regulators with an age old challenge – how to balance the interests of current and future generations.   Clearly much can be said about not investing in new pipes and other infrastructure ‘ahead of need’. No one wants to see white elephants and stranded investments that aren’t really needed, particularly when many of today’s consumers already find it hard to make ends meet.  However, it is also important to recognise that putting off decisions around new investments may potentially make them more expensive in the future, reduce opportunities for growth or foreclose future options, particularly if space subsequently becomes more restricted.

These are big issues of public policy that all consumers and citizens should have a say in.  In an investor-owned water system as in England, it is even more important that the public interest is heard when significant decisions are made if they are to be seen as providing ‘just’ water for both today and tomorrow.

In recent years there have been significant and welcome developments in GB in terms of consumer engagement in the water sector.  Local people are now being given a voice in many of the decisions that relate to their water services through formal ‘consumer challenge groups’.  How the collective interests of citizens and communities are able to shape how services and investments need to evolve is likely to be the next stage in this journey.

As our future climate becomes more unpredictable and we increasingly face the risk of too little or too much water, uncertainty may well become more acute.  What we do know, however, is that when droughts and floods hit, communities are in the front line and need to pull together.   Having a shared and developed view of how far and fast we need to invest for a resilient future would seem wise.

All this will necessitate a ‘deep dive’ into the issue of fairness:  what is fair for individuals, communities, our shared society and the future?  People often have clear views about what is unfair – such as risks and benefits not being shared – but less so as to what fairness itself is.

A public dialogue over the issue of public interest and what a ‘just’ water system looks like is a good place to start. It would seem unwise to wait for what could be the UK’s Twenty First Century equivalent of the ‘Great Stink’ before we are galvanized into action.  If we do, Bazalgette and the architects of the Roman aqueducts may rightly question whether we have learnt all we can from their pioneering legacies.

This post from Sharon Darcy has been written as a contribution to the JustWater programme that is raising awareness and activism about water in the run up to the UN World Water Day in March.  Sustainability First’s New Energy and Water Public Interest Network (New-Pin) is exploring these issues.   At a workshop later this month New-Pin will be asking how far market approaches can deliver desired long-term public interest outcomes such as fairness in energy and water supplies.