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Example 1

A municipality wants to reduce flooding which is affecting its roads

  • A District Council sees business suffering and local community dissatisfaction growing following flash floods on its roads.
  • PyTerra’s surface water analysis identifies exactly which areas and properties are affected as well as the impact on other utilities such as telecoms.
  • The direct cost to those entities which are affected by flooding is valued.
  • Indirect costs of flooding are also valued, e.g. to the community for temporary loss of road communications.
  • Options for flood mitigation by using upstream service providers are identified. In this case, it could be a group of farmers willing to develop a network of three flood retention mini-reservoirs, whose operation is synchronised using optimising software in order to provide the most effective service; the reservoirs are used for irrigation for the rest of the time.
  • The District Council sets up a central fund and takes on the role of Catchment Trading Intermediary (CTI) in order to manage the fund on behalf of the community.
  • Funding sources are identified:
    • Business rates from local businesses whose operations are affected by flooding
    • Community Infrastructure Levies (CILs) generated from local housing developments
    • Utility operators, where flood risks to their equipment are reduced
    • Water and waste water companies, where surcharging of sewers is avoided and capacity at the local sewage treatment works is relieved
  • The targeted organisations are encouraged to participate through a process of collective engagement, backed up by analysis of costs and benefits.
  • In terms of payments, the farmers will receive regular and automated incentive payments from the CTI each time floodwater is held back (this control process is automated).
  • Seed funding for the development of the reservoirs is provided directly by the CTI; the remainder is provided through a finance product.
  • An additional insurance product is taken out by the farmers, to cover damage to adjoining fields which also form part of a wider flood retention scheme.

Example 2

A major housing development is threatened by inadequate water services

  • A large new housing development (5,000 units) is being planned. However, both potable water supply and sewage services will be difficult to provide because of capacity limitations within the networks of the existing statutory undertakers. The County Council particularly recognises that an integrated approach to water services might be able to overcome current issues and perhaps bring wider benefits to the local community.
  • Following a PyTerra review of the value chain both upstream and downstream of the development, changes are recommended to the structure of the water and sewage services provision. The two statutory undertakers would step back and allow an independent utilities provider (the Integrated Wholesale Operator – IWO) to take on an inset-like arrangement and service the development directly.
  • The IWO works with the developer to initiate a range of on-site water and sewage infrastructure developments, including: rainwater harvesting, grey water recycling, SUDs+ (e.g. smart water butts), constructed wetlands and small scale sewage treatment plant based on membrane bioreactor technology.
  • In parallel, the IWO works with the County Council (which takes on the role of Catchment Trading Intermediary) to identify an upstream trading network (e.g. water rights trading), as well as downstream markets for surpluses.
  • The IWO can generate revenue from beneficiaries within the value chain: rebates it can negotiate with the current statutory undertakers; contributions from the District and County Council for creating a sustainable development; payments from downstream buyers of services (e.g. aquifer recharge); and customer payments for water and sewage services via retailers.

Example 3

A water company drives solution to flooding and pollution of an urban brook

  • Two adjoining London Boroughs want an urban brook to stop flooding from surplus surface water inundation, and the local water company wants to reduce the pollution of the brook resulting from industry (creating bright green algae blooms) and from misconnections between household sewage and surface water drains.
  • PyTerra works with the three parties and with other stakeholders in order to identify the downstream value chain. This reveals that the flooding could be stopped if there was 40,000m3 of retention space provided, but this cannot be created in just a few locations. Instead, a scheme is pursued for introducing distributed retention tanks linked to households, commercial sites and open areas. All these areas can be electronically linked to an automated signal provided by software managed by the lead Council. This tells the retention areas when to drain down and when to hold back water.


  • The water company pays for a proportion of this expense based on the value to them for not having its sewers surcharge in heavy rain and for taking load off its sewage treatment works.
  • The two Borough Councils pay the water company for the remaining expense. They, in turn, are recompensed from: EA Grant in aid; grant funding from the GLA through its Environmental Impact budget; local Business Rates for removing loss of business resulting from flooding; a contribution from Transport for London for mitigating the flooding of roads; and contributions from downstream entities which benefit from a cleaner and less flashy upstream creek. All these payments are set up on an automated ‘daisy-chain’ basis using Blockchain technology.