Water companies have been busy pandemic planning. And their suppliers have no doubt been busy planning too, trying to work out the likely impact of the COVID-19 situation. There are several pointers now to water use being up overall in spite of commercial and industrial use being down. Obviously the world is washing its hands a lot more. But perhaps people also have the time to shower for longer without a deadline for leaving the house, or are showering more regularly and not skipping a shower to save time. Or showering more because they’ve been able to exercise more than before. There was already quite a difference around the world in showering frequency, as shown in this infographic from Kantar Worldpanel.
Forbes promotes drinking more water to counterbalance increasing consumption of sugary snacks in a slightly spurious link between lockdown and research showing that increased water intake might counterbalance high sugar intake.
The time of usage has changed too. Daily habits have altered and this shows up in electricity usage where the peak has been usefully smoothed, and, in the UK at least, a new one has been created at lunchtime.
In addition to changes in consumption volumes, analysts are expecting delayed customer payments (inability to read meters and customers delaying payment) and increased bad debts (based on increased inability to pay). These in turn will adversely impact cash flow, liquidity and covenant headroom.
The water companies’ financial profiles could also be affected, the analysts say, by missed performance targets, leading to higher regulatory penalties.
While it is true that the sector can re-profile its total expenditure by delaying some non-essential projects, it is clear that projects which cost-effectively reduce leakage and bursts (advanced pressure management) will be more essential than they were before.