Welcome to 5th sludge working group meeting

20 July 2016

Trust in water 1
Agenda

Agenda Item Time

Design options for promoting greater use of markets within Sludge Transport
1 10:00 to 10.30
Treatment, Recycling and Disposal – Ofwat (Alison Fergusson)

Environmental Regulations covering sludge treatment and use – (Facilitated

2 10.30 to 11.30
by EA, Fran Lowe)

3 Water Company perspective (Facilitated by Anglian Water, Simon Black) 11:30 to 12:30

Lunch 12:30 to 13:00

‘Other Organic Waste’ Industry perspective (Facilitated by Renewable Energy

4 13:00 to 13.45
Association, Alexander Maddan)

5 Drivers for change (Facilitated by EA, Paul Hickey) 13:45 to 15:00

6 Actions and setting future working group sessions – Ofwat 15:00 to 15:30

Trust in water 2
 Context and introduction
Alison Fergusson

Trust in water 3
Our proposed Water 2020 programme summary

PR14 regulatory framework

Markets limited to NHH retail,
Wholesale controls Retail controls no historical RCV allocated to
this.
Water Waste water Household Non - household
Retail Market Operator
Total revenue control Total revenue control Total revenue control Default tariffs required.

Return on capital Retail margins

Risk-based review

Customer engagement Default service

Proposed PR19 approach

Wholesale controls Goes from 4 to 6 price
Retail controls
controls, with markets
expanded to include water
Water Waste water Household Non - household resources and sludge.
Unfocused RCV allocation. Focused RCV allocation.
Network Network
Resources Sludge
plus plus
Scope and format of retail
default tariffs could change
Total revenue control Total revenue control Total revenue control Default tariffs but some protection still
required in Wales.
Return on capital Retail margins
Will take account of in- Range of other mechanisms
period performance Risk-based review required to support market
development including better
Enhanced customer engagement Default service accounting separation data.

Trust in water 4
Timetable for Water 2020

Trust in water 5
Evidence supports use of markets in sludge

What do we mean by sludge?

Sludge = activities of sewage sludge transport, treatment, recycling and disposal. It includes dealing
with liquors generated during treatment.

Why do we think there is scope to use markets in sludge?

There is scope to use markets because… We know this because…

We have analysed the scope for trades between

Potential gains from local market between WaSCs.
companies by geography.

Unrealised gains from market with firms in wider

We have surveyed potential entrants.
waste markets.
Dynamically increasing demand over time - change
We have analysed usage patterns over time.
in biosolids use and technology.
Relatively less stranded asset risk - shorter asset
We have examined investment requirements.
lives.

What needs to be addressed in order to realise benefits?

Within our influence / control Outside our influence / control
Consistent Missing information
with 2011 Environmental regulations
Regulatory incentives
OFT study. Transport costs
Cultural issues

Trust in water 6
 Sludge market model: making the best decisions for customers & the environment

Commercial
waste co. Farmers

Farmers
Energy
Bigtown STC,
users
WaSC X
Energy
users

Townsville
Farmers WwTW, WaSC X ??

Supertown STC, Novel Tech Co

Energy WaSC Y.
users

Trust in water 7
A customer perspective – the key benefits

Increased information transparency is likely to improve within WaSC optimisation –

with resultant cost savings.

Similarly, better information may allow us to set more targeted incentives, driving
further cost savings.

Increased optimisation of sludge activities across WaSCs (through competition) should

start to drive more material cost savings for wastewater customers.

Interplay with wider waste markets could drive further efficiency gains over time,
particularly through technological change, for wastewater customers.

Benefits may also be wider than for wastewater customers – in

particular, there may be spill-over benefits into wider waste
Our proposition for customers
markets as: (i) capacity / assets are better utilised; and (ii)
technological changes is leveraged across industries (wider UK
waste market has a Gross Value Added of £5.4bn – so benefit “Customers benefit from
could be much more material than implied by the size of sludge direct competition between
value chain). and across WaSCs and
wider waste firms, as they
seek to better utilise
capacity and seek out
efficiency gains. Lower
bills delivered through the
resultant cost savings and
the ability to generate
additional value.”

Trust in water 8
May Water 2020 document – overview of key sludge decisions

Market information:
• Companies will publish information about where their sludge is
produced and some quantity and quality parameters for the raw
sludge;
• Companies will publish limited information on location, contract
duration and the sludge volumes of successful bids, but not
prices of successful contracts;
• Companies will record information on all bids received by
WaSCs for sludge services and provide to Ofwat if required.
Price control:
• We will set a separate binding price control for sludge activities
in the 2019 price review (PR19);
• We will set the sludge price control at a company level rather
than site level.

Trust in water 9
Sludge working group

• Set up in January 2016. Meets every 6-8 weeks. Will continue

for the rest of this year.
• Intended to be an open forum for constructive discussion.
• Primary role is to “kick the tyres” on the details of design and
implementation on the sludge market mechanism, such as the
separate price control for sludge and the market information to
be published.
• Members include water companies, potential market entrants,
environmental regulators.
• It is not a decision-making body.
• Agenda items so far have included:
• Explaining Ofwat’s proposals in December consultation
• Calculating costs and benefits of proposed changes
• Detail of market information and data governance
• Likely market interactions
• Defining the boundary between sludge and other water company activities
• How to value existing sludge assets
• How the water company price control might work
• Slides and note of meeting published on our website.

Trust in water 10
 Environmental Regulation

Anaerobic Digestion is key technology for sludge treatment

100.0%
Total other including landfill
90.0%

80.0% Through a third party sludge service

provider
70.0% Phyto-conditioning/composting

60.0%
Incineration of raw sludge
50.0%
Raw sludge liming
40.0%

30.0% Incineration of digested sludge

20.0% Anaerobic
Advanced anaerobic digestion
10.0%
Digestion
Conventional anaerobic digestion
0.0%
2010-11 2011-12 2012-13 2013-14 2014-15

Different environmental regimes that govern treatment and recycling of sludge,

waste and quality digestate products are perceived as barriers to closer
integration of sludge and wider anaerobic digestion markets.

Today is for us together to focus on differences, do some myth busting, and

consider what we might want to do, indeed what we can do in this area to
maximise value from these activities and continue to protect the environment.

Trust in water 11
Thank you and questions

www.ofwat.gov.uk
Twitter.com/Ofwat

Trust in water 12
 Environmental Regulations:
sludge treatment and use

Fran Lowe
E&B Manager, Environment Agency

Ofwat, 20th July 2016

0
Regulatory framework for the water industry
Parity with other industry sectors
Controlled Waste Regulations
Industrial Emissions Directive
Emerging evidence of environmental issues

1
A range of organic materials

Sewage and sewage sludge (including liquors)

Green waste
Other municipal waste
Agricultural manures and slurries
Industrial and commercial waste from food processing and retail
industries
Crop residues
Energy crops

2
Sources of regulation

European
Waste Framework Directive
Industrial Emissions Directive
Urban Waste Water Treatment Directive
Sludge Directive
Domestic
Environmental Permitting Regulations
Urban Waste Water Treatment Regulations
Controlled Waste Regulations
Sludge (Use in Agriculture) Regulations

3
Disparate regulation of treatment and use

Unregulated – e.g. non-waste materials

Definition of waste, EoW (Waste FD)
Compliance with quality standards and protocols
Exclusions (Controlled Waste Regulations)
Environmental permitting (waste operations)
Environmental permitting (IED)
Exemptions (T21, S3)
Regulatory positions
Sludge (Use in Agriculture) Regulations
Safe sludge matrix
Urban Waste Water Treatment Directive
Medium Combustion Plant Directive

4
 SLUDGE TREATMENT INDIGENOUS

Agricultural
Interim Storage land

CHP
Clean up Biogas &
inject into
grid/vehicles

Storage Treated Liquid

Digestate Interim
Flare Storage Disposal

Biogas
Biogas

c
Treated
SEWAGE Anaerobic Dewatering/ Sewage
SLUDGE Recovery
digestion Drying Sludge Agricultural
land

Liquor
Liquor
Non- Non-
agricultural Composting Agricultural
Inlet works TREATMENT land land

Liquor Liquor

Urban Wastewater Treatment Regulations GRIT ( see grit Sludge Phyto-

schematic ) Conditioning
BIODEGRADABLE
Environmental Permitting Regulations SEGREGATED
WASTE
Sludge Regulations
WASTEWATER Recovery / WASTEWATER
disposal other
TREATMENT TREATMENT
than a WwTW
Clarity Required
WORKS WORKS

Excluded under Regulation 7 Controlled Waste Regs.

The Environmental Regulatory Framework as applicable to water industry wastes – as agreed by industry/ Agency TaF – June 2011 (Version 1) edit

5
Sludges and waste waters

Case law confirms that sludge (including liquors) is distinct from waste
water. This distinction is important in determining which legislation applies
to sludge.

Interpretation of SLUDGE:
... Residual sludge from sewage plants treating domestic or urban
waste waters and from other sewage plants treating waste waters of a
composition similar to domestic and urban waste water.
Interpretation of TREATED SLUDGE:
... Sludge or septic tank sludge which has undergone biological,
chemical or heat treatment, long term storage or any other appropriate
process so as significantly to reduce its fermentability and the health
hazards resulting from its uses...
Source: The Sludge (Use in Agriculture) Regulations 1989
6
Examples of effective sludge treatment processes

Sludge Pasteurisation
Mesophilic Anaerobic Digestion
Thermophilic Aerobic Digestion
Composting (Windrows or Aerated Piles)
Lime Stabilisation of Liquid Sludge
Liquid Storage
Dewatering and Storage
Source: Code of Practice For Agriculture Use of Sewage Sludge 1996
In addition:
Incineration, pyrolysis and gasification

7
Environmental permitting

3 tier system of authorisations

Exemptions – listed in Regulations.
e.g. S3 Storage of Sludge
Standard permits –developed by the Environment Agency for activities
which can be adequately controlled by generic risk assessment.
e.g. SR2010 No15: anaerobic digestion facility including use of the
resultant biogas (site based permit)
e.g. SR2010 No4: mobile plant for the reclamation, restoration or
improvement of land
Bespoke permits – where full site risk assessment is required.

8
Controlled Waste Regulations 2012
(2) The following waste (where it is Directive waste) is not to be treated as
household waste, industrial waste or commercial waste for the purposes of Part 2
of the Act—
(a) sewage, sludge or septic tank sludge which is treated, kept or disposed of
(otherwise than by means of mobile plant) within the curtilage of a sewage
treatment works as an integral part of the operation of those works;
(b) sludge which is supplied or used in accordance with the Sludge (Use in
Agriculture) Regulations 1989;
(c) septic tank sludge which is used on agricultural land within the meaning of
those Regulations.

Implication: WaSCs have a regulatory dispensation for the storage and

treatment of indigenous sludges (unless strict interpretation of “integral” is
taken)

9
Industrial Emissions Directive and UWWTD

Biological treatment of non-hazardous waste with capacity exceeding

75 tonnes per day (100 tpd for AD) is subject to the IED so requires an
environmental permit
The IED provides an exclusion for activities which are covered by the
Urban Waste Water Treatment Directive
Opinions differ on whether sludge treatment activities at sewage
treatment works are covered by UWWTD

Implication: WaSCs could have significantly lower regulatory obligations and

costs than other operators wishing to biologically treat sludge

10
Exemption T21
(1) The recovery of relevant waste at a waste water treatment works.

(2) Relevant wastes are listed as screenings, sewage grit (waste from desanding)
only, sludges from treatment of urban waste water, centrate liquor only,
sludges from water clarification, sludges from decarbonation, solutions and
sludges from regeneration of ion exchangers, septic tank sludge, waste from
sewage cleaning, cesspool waste and other sewage sludge only

(3) For the purposes of this paragraph, the specific conditions are that—
(a) the total quantity of waste brought to the works over any period of 12
months does not exceed 100,000 cubic metres; and
(b) the waste is treated and stored in a secure location with sealed drainage.

Implication: WaSCs have significantly lower regulatory obligations and costs

than other operators wishing to treat these water industry related wastes

11
Waste hierarchy

12
Responsibility and traceability

Sludge Directive requires UK to report of the management of sewage

sludge
Small number of sludge producers currently makes this a relatively
simple task
Who will own the responsibility for tracking and accounting for the safe
management of sludge in a reformed market

Implications: There are different recording and reporting systems for sludge
and OOWs. These will need to be reconciled.

13
Emerging environmental concerns
Recent examples of poor biowaste treatment suggests throughput
more important than quality. Inadequately processed wastes are often
more odorous and difficult to store and spread.
Quality control of sludge produced within network plus assets? e.g. salt
dosing can cause sludge to contain higher levels of plant unavailable
phosphate
Recent research into a range of contaminants in sludge raised concern
about their potential impact on soil and the wider environment. The
UKWIR funded Chemical Investigations Programme Phase 2 will
review a wider range of substances of concern that are found in sludge
Internal project to audit wastes which are not deemed suitable for
composting has shown that a sizeable proportion of these displaced
wastes are now being accepted for digestion

14
Thank you and questions please

15
 Maintaining confidence &
facilitating trade in sludge

Simon Black
Anglian Water - Head of Recycling & Environmental
Services
 Agenda

1. Maintaining confidence & the Biosolids

Assurance Scheme
2. Satisfactory Sludge/Use Disposal
3. Barriers to sludge trading
a) Environmental
b) Renewable Energy Incentives
 Water 2020 Implications
Currently 11 WaSCs united in ambition
to maintain confidence in biosolids
recycling by adopting best practice (BAS)
– also creates a level playing field

Post 2020 there could be say 100 companies

handling sludge containing materials – a very
different & commercialised market?
 Maintaining Confidence in Biosolids
Must demonstrate biosolids are beneficial
to agriculture and the environment as a
whole

That it is a safe and sustainable practice

That they are a valuable resource

Must maintain support from food chain

stakeholders

Must have Government support

and a clear regulatory framework which

supports biosolids use as a resource rather
than waste
 Sewage Sludge Treatment
Various treatment technologies used to
produce biosolids
73% output treated by AD with advanced
AD treatments gradually replacing lime
treatment and conventional AD

Higher quality products reduce the

potential for odour nuisance
Odour probably has the greatest
impact on public perceptions
So odour control is directly linked to
maintaining confidence
 Recycling to Agricultural Land
3.6 million tonnes per annum biosolids
are recycled to agricultural land

Applied to 146,000 hectares/annum

Biosolids product is mainly cake at 20 –

25% dry solids

It can be safely & securely stored in field

heaps before spreading & incorporation

Estimate 170,000 truck loads and 9,000

field heaps

There are very few problems and the

current systems work well
 Recycling to Agricultural Land
Waste Hierarchy
Aligns with UK the Government recycling
Waste prevention
strategy and the EC Circular Economy
Re-use

Recycling
Nutrient value to UK agriculture Recycle/compost to land

Incineration with
Energy recovery
£25m/annum - mainly Phosphate (4.5%) energy recovery

Disposal Landfill
and Nitrogen (4.0%) plus Sulphur, Potash
and Magnesium
Sludge management options

Strong demand from farmers – it is worth

£170/hectare in nutrients alone

Anglian Water sell it as for

£2.8m/annum - reduces customer water bills

Biosolids - a resource with considerable value!

 Benefits to Soil and the Environment
Improved soil structure
Increased water retention capability
Increased life in soil (from microbes to
earthworms)
These lead to.…………

…. Less soil work and energy required

…. Increased crop yields & reduced risk of yield loss
…. Maintaining soil structure and nutrient levels
…. Reduced risk of diffuse pollution
…. A natural provision of nutrients &
…. Greenhouse gas reductions

It will be essential to maintain the benefits to soil &

the environment. THIS IS NOT WASTE DISPOSAL!
 Biosolids Recycling is Safe and Sustainable
Sludge (use in agriculture) Regulations 1989
Environmental Permitting Regulations S3 exemption for field storage

Product testing for microbiological parameters,

elements and nutrients.
Soil analysis for elements and nutrients.

Safe Sludge Matrix (since 2001) defines treatment

standards and minimum periods between
application and harvest/grazing.
HACCP principles for treatment processes.

The Water Industry is consolidating this into the Biosolids Assurance Scheme.
To provide increased transparency and reassurance to food chain stakeholders
 Biosolids Assurance Scheme
Water Industry initiative to provide reassurance to the food chain and consumers.

Brings together regulations and best practice into a single transparent Standard.

Sets a minimum Standard – protects the environment & creates a level playing field
for all, whilst facilitating sludge trading.

Stakeholder input and support are essential to maintain validity and credibility.

Third party audit by NSF Certification

Aspiration for UKAS Accreditation

Commitment from Water UK Board

to achieve 100% BAS compliance
 The Standard - Content
Intended for sludge processors and biosolids
recyclers to agricultural land

A Hazard Assessment underpins the Standard

References made to regulations, codes and best

practice within the Standard

The Standard is sub-divided into sections:

o Source materials
o Sludge treatment & controls
o Transport & storage controls
o Application controls; soils, nutrients, crops
o Application controls; environment
o Calibration, record keeping & complaints
 Source Materials - Overview

CATEGORY A
Domestic wastewater and
industrial wastewater

Wastewater Treatment Works (WWTW)

CATEGORY B
Septic tank material
and water treatment
sludge
CATEGORY C
Sludge Treatment Centre (STC)
Feedstock material

Risk identification and control measures are recorded

Pre-acceptance assessments completed for other feedstock materials

 Biosolids Assurance Scheme

Assured Biosolids
NSF Certification
Limited (appointed
(not-for-profit/owned certification body)
by 11 WaSCs)

Initial & Annual

Surveillance
Audits

Certified Biosolids
Scheme Members
(recycled to
(pay levies to ABL)
agricultural land)
 Summary

Industry committed to 100% BAS certification

Dovetails with farm QA schemes = reassurance

Technical Advisory Committee enables the scheme

to evolve to market needs

Will be supported by a promotional website

BAS Certified Biosolids - the quality Benchmark

Mitigating the risk of trading
 Satisfactory Sludge Use/Disposal
Definition of measure

Satisfactory Sludge Use/Disposal – includes; compliance with the Sludge (Use in Agriculture)
Regulations, EPR Regulations in so far as they apply to the recycling &/or disposal of sewage
sludge containing products and residual wastes, and compliance with the Safe Sludge Matrix

1. Total compliant tds, utilised via any route.

2. Percentage of overall tds production utilised in a compliant manner (= 1- unsatisfactory

use/disposal tds utilised/total raw tds production)

The industry is committed to achieving 100% BAS compliance

BAS compliance includes performance against best practice

Measure should include BAS compliance in future

 Environmental legislation – “a trading barrier”
Sludge trading between WASCs -

 no barriers, as SUAR (Sludge Use in Agriculture Reg’s) apply.

Co-treatment including sludge –

 materials immediately deemed a waste, regardless of whether the co-treated

materials are wastes in isolation

 materials don’t meet any of the existing QPs /EOW standards & SUARs don’t
apply either, adding admin costs, delays & associated operational cost.

 perception is that the material entering the process is more important in

determining end uses, than the risk posed by the final product!
 Environmental legislation – “a trading barrier”
Co-treatment including sludge (cont’d)

 The Industrial Emissions Directive (IED) includes an exclusion for UWWTD

residual sludges.

 Exclusion ceases when any other waste is mixed with UWWTD sludge

 Impact varies from process to process – secondary containment/BAT……

 All directly associated activities also captured e.g. CHP permits.

 Significant impact to customer bills

 Environmental legislation – a solution?
 SUAR, supported by BAS, currently provides robust controls & assurance

 Sludge perceived as a “valuable resource, not as a waste”.

 Review classification of “what is a waste” – removing materials which are

caught when mixed. A secondary resource perhaps?

 Sludge would be more appealing to research/innovation & for trading with

third parties.

 OOW’s would be more appealing to the water industry !

 Any change in legislation must promote co-treatment - for all parties.

Renewable Energy Incentives – “a trading barrier”
Renewable Obligation

 (Sludge) plants commissioned before 1st April 2017 have 20years

grandfathered ROCS, thereafter nothing.

 Earliest (sewage) plants commissioned in 2002, thus 60MW capacity will reach
end of RO contracts by 2022 & a further 48MW will finish by 2025.

Feed in Tariffs

 Sewage sludge specifically excluded from this scheme

 FIT available to support CHP power from the AD of OOW’s, although

consultation proposes to remove this from all AD above 500kW.
Renewable Energy Incentives – “a trading barrier”
Renewable Heat Incentive (RHI)

 Available to sewage AD plants, incentivising injection of biomethane to grid.

 Grid isn’t always close to the AD plant &/or grid can’t always accommodate

 RHI tariff continues to fall & is uncertain up until commissioning

Contracts for Difference (CfD)

 ‘New kid on the block’ in terms of sludge plants, incentivising renewable

power from sludge & OOW’s.

 No sludge plants have been delivered to date.

 Scheme remains unproven & unclear - possible lower limit of 5MW?

 Renewable Energy Incentives – “a solution?”

To facilitate trading ….

 sludge & OOW’s should be aligned in

terms of renewable energy incentives

 greater certainty is required, to promote

future investment, through pre
accreditation
Maintaining confidence &
facilitating trade in sludge
 Environmental Regulations

A Waste Industry Perspective

Alexander Maddan - Agrivert Ltd

20th July 2016
Content

• Co–Digestion

• Non–EA Regulatory Influence

• Sludge Treatment at OOW Plants

• Third Party Sewage Sludge Processing and

Recycling
Co-Digestion Practical Feasibility

• No UK-based evidence to rely on that

demonstrates the benefits of OOW/Sludge
co-digestion

• International evidence suggests it is feasible

and deliverable – but can that translate to the
UK?
Co-Digestion Practical Challenges

• De-packaging
• Grit
• Odour
• Retention time
• Biological stability
• De-waterability
• Sulphur/Siloxanes
• OOW is not homogenous
• Does OOW risk a strategic asset?
Non-EA Regulatory Influences

• Certain subsidy requirements do not allow double benefit.

e.g. If a plant is WRAP funded, it is not allowed an RHI
claim

• PAS 100/110 End of Waste status currently disallows

sewage sludge as an input material

• Local Authorities demand PAS 100/110 for their OOW to

qualify for recycling targets

• Feed-in-Tariff not available to sewage sludge – and

probably now not offered at all over 0.5MWe/hr
Non-EA Regulatory Influences

• 2 x ROCS not available after April 2017

• Does Contracts for Difference (>5MW/hr) allow sewage

sludge as a fuel?

• RHI is marginal as a viable subsidy – gas vs electricity?

• Animal Plant and Health Authority (APHA) requires

Animal By-Products Regulation adherence for OOW.
Whilst novel process is allowable, >70deg C for >1hour
at <12mm particle size is the basic standard

• ABPR places stringent traceability on recycling routes

Non-EA Regulatory Influences

Income £/mW Assumption ROCs FITs Basis

ROCs 1.8 ROCs 76.98 Current auction values

ROC Recycle 0.65 Estimated

FITs > 500kW 78.10 Per degression tables

Embedded Benefits 9.00 9.00 Range c. £3-15 (location dependent)

Brown Power 44.29 44.29 Current similar PPA pricing

130.92 131.39

RHI > 600 kW 17.30 17.30 Per published rates

£/mW £148.22 £148.69

• ROCs: closed to new installations from 31 March 2017

• FITs: degressing and likely to close
• RHI: degressing. Value assumes use of heat generated
Questions

• Is it co-location, not co-digestion?

• Can WASC justify risking strategic assets for

commercial gain?

• Can regulations and/or standards allow co-

digestion in the future?

• Is there any feedstock to co-digest?

OOW Industry Sludge Treatment
Options

• Regulation currently make it near impossible

economically
Assume point 1 is cured:
• Good source of P for compost
• Fair calorific value for AD
• Odour
• Public benefits
• Gate fee/ Transport cost
Third Party Sewage Sludge Processing
and Recycling at WASC Sites

Current Status

• Few WASC’s currently have third party

processing activities

• Most WASC’s use third party recycling activities

Why?

• Different Capex/ Opex budgets hide the

advantages

• Perceived strategies needing to own in-house

processing solutions

• Risk of recycling (farmers, public opinion and the

weather) drives outsourced solutions
An Example of Third Party Outsourced Sewage
Sludge Processing and Recycling

• In 2004 in Newcastle Upon Tyne, Agrivert built

(DBO) a processing and recycling plant for
Northumbrian Water (NWL)

• It reliably treated 32,000 tds/yr

• It cost £1.6m
An Example of Third Party Outsourced Sewage
Sludge Processing and Recycling

• Totex (minus polymer & power cost) to NWL was

£131.37/tds, including Agrivert margins

• 1 monthly meeting with NWL

• The plant was always hungry for sludge

• NWL bought it back fully refurbished in 2014 as

the Howdon AAD process began
Why didn’t Agrivert Deliver the AAD
Plant?

• Despite our AD experience and reputation, we

were not engineering framework contractors

• We estimated a £16m delivery cost, it cost £26m

• Framework engineering contracts kill innovation

and are not effective
Opportunity
• Offer >12 year contracts (bankability)

• Offer large volume to spread costs

• Allow third party contractors to take complete

Totex risk

• Have a long hard look at how many WASC

employees are really involved in the Totex
solution
Outcome

• Capex of processing plants will drop

dramatically

• Opex should rise to securitise recycling outlets, it

will fall in logistics
Outcome

• Totex will fall

• Sewage sludge will be strategically more secure

• Innovation will flourish

• Energy recovery will be maximised

• External investment will flow into the sector

Why has it not Worked Before?

• There is a glass ceiling in WASC’s that currently

prevents it

• Recycling contracts are paid deminimis cost/t to

haul and spread, so examples of quality
operators to deliver are rare

• WASC’s deliver engineering as part of their

culture, its an international culture!
THANK YOU
Alexander Maddan
07702 700910
[email protected]
 Environmental Regulations
sludge treatment and use:
Drivers for change

Paul Hickey
Deputy Director, Environment Agency

Ofwat, 20th July 2016

0
Environmental Regulatory Boundaries

Key boundary will be between the sewage (network+) business and

sludge business
… point at which sludge is separated from effluent stream and held in
storage tank / lagoon

Does this market boundary align with environmental regulation

boundaries between ‘sewage treatment and disposal’ and ‘sludge
treatment and disposal/use’?

Need to fully understand which materials move across this boundary.

Are there sludge derived materials which may re-enter Network+
assets?

Are there materials which are put into the head of STWs which
should/could go into sludge treatment facilities
1
Constraints and Opportunities: sludge treatment and use

Recognised that water and waste sectors can have different perspectives
on the future market opportunities.

aspects of environmental regulation that will constrain WaSCs and

waste management companies from participating fully in the market –
and why?
new opportunities that could be realised by amending environmental
regulation without compromising environmental protection
any unintended consequences or market distortions created by the
interplay of Ofwat proposals and environmental regulation