From WaterBriefing

David Black, Interim Chief Executive at Ofwat has said that the transformation of the UK water sector over the next 30 years will require significant new investment.

Speaking at a conference on water security last week, he told his audience that looking ahead to 2050, a step change in outcomes was required, including:

• significantly increased drought resilience
• reduced abstraction from overstressed sources such as chalk streams
• leakage reduced by 50% or more
• per capita consumption turning from a steady increase overtime to reduction to 110 l/per day by 2050.

The ambitions meant that the sector needs to “fundamentally change the way it delivers for customers and the environment, he said. This included the need to stop thinking about the wastewater sector as waste and rather as a source of renewable energy and clean water.

Describing the scale of change required as “vast”, he commented:

“The transformation of the sector over the next 30 years (or the next 5 price reviews) will require significant new investment, but in many senses, this is the easy part, transforming culture and ways of working are also central to a successful transformation.”

“We cannot simply build our way out of the challenges. Firstly, this is likely to be unaffordable, but leaving that aside, the carbon impacts of massive concrete and steel capital programmes would be very large and such construction may well be net negative for the environment.”

He went on to identify six areas which could really help drive and deliver change at scale:

• mass scale consumer behavioural shift as part of addressing climate change
• the need to see community engagement and nature based solutions come from the margins to a mainstream approach that provides for most of the solutions in the next ten years
• smart networks and open data – harnessing the power of the fourth industrial
• revolution to operate and maintain networks intelligently
• a renewable energy revolution in wastewater
• long term and adaptive planning
• innovation – the need for the sector to become much more effective at turning ideas into action effectively, efficiently and at pace

According to Black, too often the water sector seemed to start afresh at a price review – he explained:

“We need to see the next five price reviews as incremental steps to deliver a 30 year plan…. planning needs to be adaptive, recognising both the value of delaying decisions to learn more and to take near term decisions with long term goals in mind. It also needs to look beyond public water supply to other sectors.”

Ofwat in turn needed to play its role in enabling and encouraging the transformation of the sector – and it was clear that the regulator needed to need to change, he said. Looking ahead to the future, Ofwat had a key role to play in promoting the sector to deliver greater value – for customers, communities and the environment.

In his view, too often Ofwat had the seen the environment as “extra” on top of service to customers – however, it was at the centre of the sector and water companies had “huge ability to enable gains.”

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Water sector given green light to invest £2.7 billion on building back greener

Ofwat press notice

The water sector will invest £2.7 billion to deliver lasting environmental improvements for current and future generations.

Ofwat, in collaboration with Defra, the Environment Agency, the Drinking Water Inspectorate, and CCW, has given the go ahead on delivering a broad range of proposals to offer a more resilient, greener and healthier future.

Five water companies – Severn Trent Water, South Staffs Water, South West Water, Thames Water, and United Utilities will invest an extra £793 million, on top of their existing five-year PR19 packages, to help the green economic recovery. These companies, along with seven others in England, are also bringing forward £1.9 billion worth of investment in additional statutory environment schemes into the 2020-25 period.

The final decision to give the green light on the additional investment will allow water companies to take extra action on the most pressing environmental issues. Severn Trent Water will invest £169 million to make improvements to water quality in 500km of rivers – equivalent to the distance between London and Carlisle.

Severn Trent Water, South West Water and United Utilities will invest £158 million to reduce harm from storm overflows and trial the creation of two new bathing rivers. In addition, United Utilities and South West Water will deliver a range of nature-based solutions in partnership with local stakeholders. Severn Trent Water will work closely with local authorities to reduce flooding – developing natural flood management and green urban landscape solutions which will prevent rainwater entering the system in the first place.

Companies will be taking steps towards reducing their greenhouse gas emissions and towards the goal of net zero. For example, Severn Trent Water and South Staffs Water will both introduce innovative low-carbon ways of treating drinking water, which also have the potential to reduce the use of chemicals.

Two companies are carrying out pilot trials to replace customer-owned supply pipes, including those that are made of lead or are leaking – with benefits of better health outcomes for their customers and potential for reduction in phosphate dosing. The learning from these schemes will be crucial in informing approaches to deliver water quality improvements and reduce leakage in the future.

Customers will also see significant benefits from the schemes as Thames Water, Severn Trent Water and South West Water expand their smart metering programmes – helping up to 450,000 customers to manage their water use.

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