from Water Briefing

Ofwat has opened a new consultation on proposals to require the water companies to publish more data as a means of supporting further market development for bioresources trading.

Since 2018, the eleven water and sewerage companies in England and Wales are obliged to publish bioresources market information at least annually by the end of July each year as required by Ofwat’s ‘Bioresources market information guidance’. The information includes locations where bioresources are produced and treated, the quantities and some quality information.

The objective of the guidance was to:

• to provide standardised and defined information to enable potential market participants to identify opportunities to supply services in the treatment, transport, recycling and disposal of bioresources;
• to ensure information is comparable and reliable for use by market participants; and
• to enable Ofwat to monitor the bioresources markets to see how effectively they develop.

The new consultation covers Ofwat’s proposal to amend the existing Direction issued to companies in relation to the information they are required to provide.  Under the revised Direction, companies would be required to publish and provide Ofwat with additional information for the purpose of supporting the development and monitoring of the operation of a market in bioresources services.

In February Ofwat hosted a stakeholder event on the existing bioresources information provided by the water and wastewater companies.

According to the regulator, while the market information is helpful and there is evidence of stakeholders using it, its current limitations include:

• Provides no indication of the scope for trading
• Backward looking, whereas trade (especially long-term trades) are forward looking
• Variations in how templates have been populated, reducing machine-readability
• Possibly, improved definitions would aid consistency.

Ofwat now thinks there is merit in refining the annual market information further to:

• include projections for capacity (e.g. total capacity, headroom, tradeable and shortfall capacity) over a rolling 10-year period
• include information on the primary destination of each WwTWs sludge
• refine the template to incorporate data validation and site IDs
• allow companies to flag any future capacity procurement to help potential capacity suppliers find the information
• describe the data provided, e.g. assumptions or methodological points
• facilitate the provision by companies of standardised and defined information to enable potential market participants to identify opportunities to supply services in the treatment, transport, recycling and disposal of bioresources;
• ensure information provided by companies is comparable and reliable for use by market participants; and
• enable Ofwat to improve its monitoring of the bioresources markets to see how effectively they develop.

Ofwat commented:

“By consulting now, we will be able to issue the direction later in the spring which will enable companies to make the required changes for the reporting year 2020-21 which they will need to produce later this year. We intend to incorporate this information into our next market monitoring report and bioresources dashboard.“

The water sector regulator launched a review of the bioresources market on 19 October 2020 – issues covered in the review, which is currently ongoing, include:

• the scope for bioresources competition under the current market model – to help inform Ofwat’s future monitoring of the market;
• the current barriers to competition and the development of the market;
• different forms of competition / market models; and
• options and the steps needed to achieve the market models and the barriers needed to achieve them. The review will inform how Ofwat regulates in future, including it approach at the next Price Review in 2024 – PR24. The regulator is also planning to consult separately in May 2021 on the provisional findings of the Review of the Bioresources Market.

Deadline to submit responses to the consultation is 5pm on 15 April 2021.

Click here to access the consultation document Bioresources information consultation March 2021 

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