Liquid asset

Making use of the water that surrounds us is nothing new - from the mills that have powered industry for centuries to the simplicity of a flushing toilet.

But in Scotland currently there is something far bigger happening, the question has been asked not just how we use water to our advantage - but how to transform Scotland into the world's first 'hydro nation'.

The concept, being championed by the Scottish Government, is a broad one, encompassing everything from ensuring the water that comes through the taps in people's homes is of the highest quality, to putting the country's water experts on the global stage as a hub for knowledge and expertise.

At the heart of the policy is thatScotland, by the nature of its geography, has an abundance of water in its lochs and rivers.

A policy document launched by then Infrastructure and Investment Minister Alex Neil, now replaced by Deputy First Minister Nicola Sturgeon earlier this year, set out an aspiration to make use of these resources, "harnessing them more fully to boost the Scottish economy".

Scottish Water is one of the key players as far as the Government is concerned - a publicly-owned company in charge of both drinking, and waste water, its role is mentioned in both the Hydro Nation prospectus and the accompanying Water Resources Bill currently going through Parliament and at the Stage One phase.

It has just launched a six-month consultation asking people what they want to see from the company and what its spending priorities should be over the next 25 years. Bills for Scots households are lower than elsewhere in theUK, but residents are being asked if they would be prepared to pay more to fund future investment.

Since Scottish Water started 10 years ago it has been updating some of the country's ageing infrastructure and trying to make the company, and the way it delivers water, more streamlined. Leaks have been reduced by 40 per cent, operating costs have been reduced and £5bn has been invested, and as director of communications, Chris Wallace tells Holyrood, it has seen the company go from being "easily the worst mainland water company in theUK" to now being among the best.

Because the treatment of water requires so much processing, the company is the highest energy user inScotland, with just under two per cent of the nation's electricity bill.

Because of this, Scottish Water is trying to make the process of treating water more efficient and getting more of its power from renewable energy - including installing mini hydro turbines in some of its water pipes and leasing some of its land to wind-farm operators.

Wallace says it could mean the company having the "greenest water in the world" - something that could prove to be an economic advantage.

"If we said we've got the greenest water - the drinking water that reaches your tap has no carbon footprint whatsoever and indeed, all the waste water goes through the same - would businesses locate toScotlandas a result of that? Would an individual choose to do business withScotlandand choose to live and work here?

"I think over time they probably would, because these issues will get more important and have a higher profile."

But in aScotlandwhere there are many competing priorities for the Government, where does the issue of water sit?

Wallace says: “Water and the aquatic environment is just rocketing in terms of profile. It has all of a sudden become a sexy business.”

This idea that the quality ofScotland's water could bring economic benefit and enhance the country's reputation is echoed by the Scottish Council for Development and Industry.

In December it is running a major conference on Hydro Nation alongside the Scottish Government - which will also see the launch of the Hydro Nation Forum, a group dedicated to planning the way forward.

SCDI's policy officer, Gareth Williams, said: "The water at present supports a huge amount of economic activity. It's a key part of many industries - food and drink, power generation, aquaculture and tourism. By protecting and sustainably developing that over a period, there is potential for further growth in a number of those sectors.

"You could imagine that given the abundance of water and energy resources, some of those industries might seeScotlandas a more attractive location for investment."

He added that companies realised the quality of the water could enhance the reputation of their products, highlighting the whisky industry - and also the Scottish Leather Group, which markets its products based on its sustainability.

"They can't compete on price compared with lower cost locations, but global companies which buy leather from them are keen - because their customers are keen - to have the sustainability of the Scottish Leather Group's products."

He added: "By and large, Scottish companies have got a good record, looking at the whisky industry and the commitments it has made, they work closely with the regulators and were conscious of European regulations in that area which have led to improving standards over a long period of time."

The concept of Hydro Nation is very broad, with it often meaning different things to each of the organisations involved.

But Diane Duncan, head of low carbon at Highlands and Islands Enterprise (HIE), says this in itself is a good thing.

"I think what we have in Hydro Nation is a creative framework to allow people to do their different things as they have different roles and purposes associated with the wider water industry.

"This is the first time that we've really had this kind of platform to really kick the tyres of the water sector."

HIE has been involved with looking at how the water sector can contribute to a low carbon Scotland as part of the Environmental Clean Technology Partnership, which also includes SEPA, the Scottish Funding Council and Scottish Enterprise.

Out of this has developed an Innovation Park and a focus on the economic contribution, particularly of small and medium-sized enterprises (SMEs)

It is the opportunity for smaller businesses – and not just the relative giant of Scottish Water that Duncan sees as crucial to the success of Hydro Nation – giving innovative companies the chance to dig out a niche in the water market and use their expertise at home and abroad.

Two of those SMEs will have seats on the new Hydro Nation Forum.

The first, Dryden Aqua, is a marine biological company based in Bonnyrigg, one of its successes has been the management of water in swimming pools "closing the loop" on water treatment and eliminating disinfection by-products and reducing operating costs by more than 30 per cent.

The second is Biomatrix Water based in Forres, a research and development company which is predominantly focused on ecological water treatment and solving water issues elsewhere, using techniques such as installing floating ecosystems on canals and waterways to improve the quality of the water.

The concept of Hydro Nation has developed quickly. It was first discussed during the last Scottish Parliament under a minority SNP administration, with a first public consultation launched in December 2010.

In September last year, in setting out his programme for government, First Minister Alex Salmond confirmed one of the bills he intended to bring forward was a Water Resources Bill, which would confirm a duty on Scottish ministers to make Scotland a Hydro Nation, the Bill, which has been scrutinised by the Parliament’s Infrastructure and Investment Committee, also sets out the extended role for Scottish Water and modernises the legislative framework on issues like protecting drinking water sources, and managing temporary water shortages.

The Bill, which looks at inland water, wetland and transitional waters, but not coastal waters or the marine environment, places a duty on all Scottish ministers “to take all reasonable steps to develop the value of Scotland’s water resources” and includes a requirement to report to Parliament after three years on how they have achieved this.

HIE is one of the designated bodies referred to in the report and Diane Duncan says the Bill is an important part of bringing about Hydro Nation – making it more than a marketing concept.

She said: “The thing the Water Resources Bill does is provide the emphasis and the push, the wording is quite significant in that bill where it says ministers have a responsibility and must report to Parliament on progress.

“I think it’s providing the teeth behind Hydro Nation.”

But although those involved in creating a Hydro Nation refer to "exports", there is one thing that many of them agree on - the concept does not mean transporting our water elsewhere.

As the south of England suffered water shortages earlier this year and several authorities imposed hosepipe bans, Alex Neil wrote to the UK Government offering help with the water supply in the long term, if it was both commercially and practically viable - although he conceded there would be "massive logistical issues".

Both the cost of pumping the water along long pipelines, the carbon emissions created by driving it by tanker and the fact that the water would probably have to be piped untreated - meaning it would still have to be filtered at the other end - means that the process would not be expensive and water is not worth anywhere near as much as oil, gas or electricity.

Chris Wallace, director of communications at Scottish Water said: "We don't, realistically, in any kind of timescale, see physical export - either by pipeline or tanker - really being feasible or something that would generate enough of an economic advantage to make it worthwhile."

And Galen Fulford, managing partner at Biomatrix Water, said: "If we're at a stage where we're exporting water, then we have really done everything else completely wrong - to me that's not an opportunity, it's a sign that we're continuing along a linear use of consumption and discharge and we're not actually solving a problem.

"I would much rather see us looking, as a Hydro Nation team, at how are we going to tackle that, how are we going to put in regional systems which capture the waste water and treat it to an exceptionally good standard, recharge it into specific places within the eco-system within the landscape and then extract it, so the water's not just recycled, it's recycled through the environment - so it becomes natural living water again."

He added: "There's really a lot more we can do which is a lot more innovative, a lot more sustainable and much more in keeping with the Scottish tradition of being innovative and a little bit frugal in the process."

Instead what is being ‘exported’ is the expertise fostered in Scotland. Companies like Biomatrix and Dryden Aqua and many others.

Scottish Water has also formed Business Stream, a wing of its operation dedicated to the innovation and retail side of the industry.

The company also now has an international arm, set up more than a year ago whose work has most recently included advising the Qatar state-owned water company on how to improve its waste water infrastructure, as the country prepares to host the football World Cup in 2022.

Advice has been down to something as simple as how to set up a contact centre for customer calls.

Although the company has had little involvement in advising the country on its drinking water -Qatar’s main concern, in a country where water is far scarcer than in Scotland, is desalination plants and Scotland only has one small plant on the Shetland Islands– it has advised on how to improve its work on repairing leaks.

In addition, the company is part of a bid to help set up Irish Water, building on the experience of the last 10 years.

There are already guidelines and rules that govern the quality of water – with restrictions on pollution levels in water rising all the time. This includes the European Water Framework Directive.

As the reputation of Scotland's water is central to Hydro Nation, it is important that with all the work to fully exploit it, that this is not tarnished.

Lisa Webb, an RSPB Scotland policy officer, said a sustainable water industry should be "at the heart" of the concept.

RSPB was one of the respondents to the government consultation earlier this year and Webb said: “One of the things we did ask for is, we think there needs to be a clear vision for Hydro Nation, because it is still a little bit hazy. Because of the word ‘hydro’ being in the title, people think it is solely about hydro power and renewable energy generation, but it’s not.”

Her organisation backs managing catchment areas of water, improving the raw quality - meaning less work is needed at the treatment works. "In the process of doing that," she says, "you're delivering all these other benefits to wildlife, just managing the land more sustainably, creating wildlife habitats and obviously reducing the pollution at source."

She added: "We are very clear that a healthy, natural environment underpins the economy. You have to use it sustainably otherwise you're shooting yourself in the foot.

"The Water Framework Directive says water is not a commercial product, it's a heritage that we have to protect and defend, any kind of move towards purely making money out of the water environment is definitely in conflict with the directive and the aspirations of that."

As well as the definite focus on the economic benefits of being a Hydro Nation, there has to be a concentration on the academic side needed to bring it about.

This led, in April 2011, to the creation of the Centre of Expertise for Waters (CREW), which is a partnership between the James Hutton Institute (JHI) and Scottish higher education institutes to help deliver the necessary academic research.

One of the key aspects of water policy, which other businesses working within the sector are realising, is that despite the abundance of water, it is more efficient and better for the environment if there is a continual cycle, that what comes out at the end as waste water is put back to the start of the chain, with as little cost or loss as possible.

CREW’s director Bob Ferrier, who is Director of Research Impact at the JHI, based in Aberdeen, said: “Water is a very precious resource. We put a lot of pressure on it through land use and industrial pollution. Now we're facing the impact of climate change and greater demands for food.

"We do have an awful lot of good water quality in Scotland, but we can't rest on our laurels. Even in a water rich country, you can't be complacent about water quality issues."

He added: "The water industry is very energy dense. It uses a lot of energy to move it about. The treatment of water uses a lot of energy.

"The nutrients we put on our farm land cost money. We lose them through pollution, we then have to clean them up out of the water and we also dispose of some of them.

"You can't go on like that. We use nutrients to produce our food to live our lives and they all go through a natural water cycle and we've got to find ways to ensure we don't do that.

"We're living in a world now where we've got tremendous resource overuse and we need to be much more intelligent about not using the value in some of these things."