LONDON, UK – Industry regulator Ofwat has said that water utilities’ draft Water Resource Management Plans (WRMPs) have fallen short of expectations when it comes to ambitious actions to improve resilience.
The most recent set of plans (WRMP19) - designed to provide an overview of companies resilience to drought over the next 20 years – were released for public consultation in spring this year, with Ofwat reviewing the draft plans as a statutory consultee.
Today it called for “clear improvements from water companies in how they plan for greater resilience against drought”.
In its response, the regulator said that utilities could make better use of opportunities to reduce water consumption and cut leakage in the long term. Water trading was also one area where Oftwat said there could be further improvement.
Since privatisation, the level of trading has remained static at around 4-5 percent of water into supply, however, at the same time water companies have invested heavily in linking up their own networks and moving water internally, according to the company.
In its impact assessment to support its Water 2020 reforms, Ofwat identified that greater water trading between water companies could save up to £600 million over 30 years (2015/16 prices).
“There are only a few new trades in the first 10 years of the plans and in net terms the level of trading appears to fall slightly over this period before increasing again," said Ofwat. "The fall in trading is a result of a number of current trades either being stopped or reduced. The draft plans did not sufficiently convince us these changes are appropriate.”
One “water trade” referenced was the Severn-Thames transfer - an option to move water from the north-west to the south-east of England using a combination of existing river systems and new infrastructure.
The regulator said: “While it is not included as preferred option by all companies involved we expect all parties involved in this trading option to continue to actively engage on progressing its assessment prior to the final plans being published. If the uncertainty is not resolved by the final plan there may be merit in continuing to explore the option, given the option value and potential long term benefits to customers and the environment.”
In its feedback, Ofwat also highlighted examples of good practice, such as ambitious proposals to cut leakage in the short term by using satellite imagery and smart meters to locate customer supply pipe leakage.
David Black, senior director Water 2020, said: “We are disappointed that water companies’ draft water resources plans fell short of our expectations given the challenge to the sector for ambitious action to improve resilience. There are examples of good practice in a number of plans, but more can be done to deliver a robust twin track approach and look harder across company boundaries to develop regional solutions and outcomes”