2. March 2017

Competition in the water industry – will Europe follow the “Open water” initiative?

As of April 2017, companies and public bodies in England will have the opportunity to freely choose their water provider. Prior to the “Open Water” initiative, this was only possible for non-household customers, who consumed more than 5 million liters.

In Scotland, open competition is since 2008 the case. More than 130,000 scottisch non-household customers have already switched their water suppliers. Scottish Water is, however, the only scottish water company to operate both the water-producing facilities and networks and therefore has a clear lead over the competition. Now the water industry of England and Wales will also witness change. Like Scotland nine years ago, both England and Wales now face the challenge of competition in the water sector. For Wales, there is a special regulation in the meantime: consumption is still the key criterion, but the limit stands at 50,000 m3 this time.

Competitiveness through excellent service and technological lead

English water suppliers are not allowed to form their prices completely freely. The upper limit for the water price is stipulated by the OFWAT (regulating body for water management in England and Wales). English water suppliers are therefore under great pressure to become more efficient under a fixed price in order to ultimately generate more profit. In addition, they must be able to convince end users to change their supplier through a unique product or service offer. WATERLOO can help them deliver both. One thing is certain: “Open Water” represents an unique opportunity for new technologies interested in the English market.

Is Europe ready for competition in the water sector?

The public is usually very skeptical when it comes to water regulations. Not long ago, the European citizens’ initiative Right2water caused some raising eyebrows. Water is a human right, was the slogan at the time, and water management should be excluded from the EU-wide liberalization agenda. The initiative was registered on the 10th May in 2012 and collected a total of 1,659,543 valid signatures. The whole deal was sponsored by the European Trade Union Confederation for Public Service.

In Austria, there is already strong competition on the electricity and the natural gas market. Not only companies but also households can choose the provider freely. The liberalization of these markets also took place on the initiative of Great Britain. It remains to be seen, whether the liberalization of water management in England, Wales and Scotland will lead to a change in the mindset of other European countries.

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