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Asset optimisation for AMP6

18th January 2016


Adoption of new technologies will be instrumental in meeting AMP 6 targets, as Jeremy Shinton explains

With the water utilities spending in excess of £25B in AMP5 the time has come to sweat the assets and gain maximum efficiency from every part of the water delivery process and the services that surround them.

Growing costs of energy, transport, and other ‘raw’ materials to the water process business mean that water companies have to look deeper into their souls to gain ‘margin’ to pay investor dividends.

Add to that the constraints applied by the regulators mean that prices can’t be increased beyond those agreed on an individual basis with OFWAT, except by applying the ‘K’ factor which allows the water companies to increase their prices by an agreed percentage over and above the determination value, however this cannot be applied every year.

During the past five years water industries have been busy with the implementation of the capital projects that were agreed as part of their OFWAT submissions. AMP5 has been mainly around the development of new high efficiency water and waste water treatment plants and new methods of producing energy from the process as a by-product. This has seen the water companies build various energy plants such as Bio Gas, Thermal Hydrolysis and Sludge Incineration plants.

Many of the water companies are beginning to treat the process like that of a large factory enterprise, with OEE or lean thinking in mind, there are many differences between a water treatment plant and a food or automotive manufacturing business but there is the same driver and that is to eliminate waste and reduce not just processing costs but overall business costs.

If we consider the seven manufacturing wastes (as defined by Ohno in the Toyota Production System) they are, over production, waiting (by operators and machines), transportation of materials, unnecessary or over complicated processes, excess stock or materials, excess movement by operators and defective products. There are some areas in which the water companies could benefit by stringent analysis of procedures and production to get the absolute best out of the plant assets.

If we take ’transportation of materials’ as an example we could apply this to utilisation of tanker transportation which could result in significant cost reduction in fuel bills for the business.There are many other areas in which lean principles can be applied, such as sludge treatment and optimisation of energy production, intelligent use of maintenance and predictive maintenance, with links to ERP and asset job cards creating a holistic approach to the business needs.

Utilising technology to implement lean strategies will be crucial to generate effective savings. Although a great deal of hype surrounds the terms Internet of things, M2M and big data, they will be instrumental technologies that all businesses will have to embrace including water and waste water. The ease of data flow that these technologies will bring will revolutionise the information available to managers and operators enabling them to model the response of the process network to the weather conditions and the demand requirements.

The water companies are extremely tightly regulated and must provide the government with statistics on how well they are operating from extraction of raw water to final delivery to the tap and on collection of waste water through treatment and back to the rivers and reservoirs. This necessitates the need for them to use all of the processes mentioned above, especially as AMP6 will require the water companies to undertake activities that will extend the life of their plants and apply a TOTEX methodology.

Mitsubishi Electric is leading the way with this by assisting Water Companies in improving their operational efficiency by implementing systems to collect operational data that will transform their maintenance strategies. It is also assisting businesses to ensure that their plant operates within its optimum parameters and provides the maximum amount of energy possible in the case of sludge plants for example; this provides them with a much improved ROI ratio and a longer lasting plant, therefore reducing the TOTEX costs.

Jeremy Shinton is Business Solutions Manager at Mitsubishi Electric







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