Beacon Project: Watercare – partnering for carbon reduction
The first Accord Beacon Project focuses on reducing carbon production in infrastructure construction.
New Zealand's largest water and wastewater company Watercare is working with its construction partners to build better infrastructure using their innovative 'Enterprise Model'. The model has a combined focus on reducing carbon emissions and construction costs whilst also improving health and safety and wellbeing. This Beacon Project examines how the model has been designed to focus all parties on meeting these objectives.
Beacon goal: Reduce carbon production in infrastructure construction.
Statistics: Ten year, $2.4 billion partner model involving design, construction and supply chain in the Auckland metro region. Targeting a 40% reduction in carbon emissions to deliver infrastructure.
Applies to: Agencies and large civil and vertical construction companies delivering long term infrastructure projects and programmes.
Accord goals: Increase productivity, raise capability, and restore confidence, pride and reputation in the sector.
Accord outcomes: Sustainable buildings and infrastructure created with minimal environmental impact. Better whole-of-life value for taxpayers. A collaborative industry.
Innovation through collaboration
Watercare supplies water and wastewater services to 1.7 million people in Auckland. Their significant 10-year asset investment programme is aimed at ensuring sustainable, quality services continue to be supplied to the city's growing population. This programme includes the construction and upgrading of a range of infrastructure including dams, treatment plants, pump stations and a vast network of pipes.
To do this in a safe, cost effective and environmentally sustainable way, Watercare has entered into a $2.4 billion ten-year collaborative contract with construction partners Fulton Hogan and Fletcher Construction, supported by design partners Beca, Stantec, and GHD. The long-term, collaborative nature of the contract is a first for New Zealand and demonstrates a new way of working that aligns with the values promoted by the Construction Sector Accord.
"We will work collaboratively with our construction partners to plan and deliver our comprehensive long-term programme of work — rather than focusing on discrete projects — in order to drive better outcomes for Aucklanders, greater cost-efficiency and innovation. We're calling this way of working the Enterprise Model."
Watercare Chief Infrastructure Officer Steve Webster
The new model recognises that the traditional project-by-project transactional approach to construction work that kept providers at arm's length had to become more strategic to enable a step-change in performance outcomes. The Enterprise Model takes a 'programme first' approach, introducing construction and design partners to the overall programme planning and keeping them close throughout the entire infrastructure lifecycle, all working collaboratively as one in-house team. This long-term partnership arrangement allows coordinated project development from end to end, the extraction of maximum value from investment, opportunities for continuous improvement and an efficient and innovative approach to goals such as carbon reduction.
Watercare have set an ambitious target for the infrastructure programme of reducing carbon by 40%. In addition, they aim to reduce costs by 20% and improve health, safety and wellbeing by 20%. These aims will be supported by the long-term nature of Watercare's partnership with their construction and design partners. For instance, the contractors will have the time, contract security and confidence to invest in the skills and equipment needed to reduce the carbon produced during construction and the ongoing operation of the assets.
There are a number of 'carbon hotspots', or high carbon-producing materials and activities, that are common across horizontal and vertical infrastructure and these include concrete, steel, fuel consumption in construction and excavation, and the use of aggregates.
Greenhouse gas (carbon) emissions are a good indicator of resource efficiency. Contrary to popular opinion on the cost and complexity created by focusing on carbon reduction, evidence suggests that it promotes collaboration across the supply chain, unlocks innovation, and enables cost reductions.
Steps to reducing carbon
The Watercare Enterprise Model has identified four key steps to achieve a step-change reduction in carbon in infrastructure construction. These may be refined as the programme progresses, and templates and tools may be added to this page in future.
Step one: Commit to action
You need to truly believe in the value of reducing carbon and this needs to be supported across the organisation, particularly at the top. Make a commitment to action.
Step two: Understand your carbon footprint
You can use a carbon assessment model to help you establish a baseline for the potential carbon impact of your programme, and identify any hotspots.
Step three: Build your internal processes
You need to think differently. Having a carbon-first focus requires new processes and a different mindset. There are frameworks you can follow such as the PAS2080 standard — a global standard for managing infrastructure carbon.
Step four: Review your approach to procurement.
You need to develop a suitable procurement approach to find long-term partners that can help you deliver these ambitious targets. This is a challenge that thrives on collaboration and can't be done alone.
Principles to follow:
- Take a long-term programme view rather than focusing on individual projects
- Plan with the understanding that improved environmental performance will lead to better outcomes for your business and the community
- Establish a vision and ambitious targets
- Harness innovation from the private sector to deliver your target through financial incentives
Lessons learned so far:
- Governance and executive level sponsorship is vital for success.
- A carbon reduction mindset is required within the organisation to drive initiatives and produce better carbon outcomes.
- New Zealand is at the early stages of understanding carbon in infrastructure. This leads to a reliance on overseas data, for example some materials in the carbon assessment were built using Australian and UK carbon estimates. A standard New Zealand materials carbon library, and engagement from the industry to support this, would yield more accurate carbon estimates and innovative options for reduction.
Following an initial establishment phase, the Watercare Enterprise Model has been in operation since the start of 2020. Progress as at June 2020:
- Created an Enterprise Model toolkit which encompasses all elements necessary for successful 'programme first' delivery, eg governance, processes, procurement, ways of working and technical solutions
- Strengthened the business case process to ensure that carbon reduction targets must be addressed, including a challenge to pre-existing business cases, within the design options
- Initiated carbon reduction outcome expectations within the upstream supply chain, where carbon and cost outcomes are transparent and can be easily compared
- Dashboard reporting on carbon and cost reductions are contractually specified and performance incentivised
- Roll out of culture and mindset behavioural change expectations and methods to measure realised change
Our $2.4 billion construction partnership(external link) - news story on watercare.co.nz