Spending on water efficiency should be doubled at PR24 as a default, or a justification provided of why that was not possible, efficiency advocate Nicci Russell has suggested.
Russell told Utility Week she was appointed as chair to accelerate efforts where required. “Everything we’ve seen recently says we need greater ambition and we’re not on-track for current ambition.”
Russell said she welcomes policy changes and legislative commitments made in recent years including the water efficiency label, roadmap to water efficient homes and statutory demand target in the Environment Act. However, she added: “I don’t feel we’re going far enough. Water efficiency is still treated as a second class citizen.”
“I want to see energy policy, housing policy, carbon targets, economic growth all factoring in water scarcity and water efficiency. Water efficiency does not get a seat at that table. It remains very niche in government and although it’s improved with every price review, still the financial rewards and penalties are much greater for leakage than efficiency. What does that say to companies about how important water efficiency is?”
With work progressing on the next price review, the strategic policy statement (SPS) to Ofwat, regional water resource management plans and government discussions on homebuilding, Russell said the issues in the letter are “really urgent” and that the majority of suggestions could be reflected in existing policy and regulatory frameworks.
The letter argued the next price review should include long-term costs of not acting on both customers and the environment in the cost assessments.
The letter noted a need for a cultural change in customer behaviour because consumption has continued to rise in recent years, despite efficiency campaigning. Russell recommended establishing a roadmap of what policy and regulatory interventions are needed to halve water consumption and said timeframes should be included in future business plans. Within PR24, efficacy of efficiency campaigns and tactics should be measured in terms of actual water saved and best practice shared across the industry.
Russell said the statutory demand reduction targets, which will be included in the Environment Act, should drive ambitious policy and action, not simply reflect existing efforts. She suggested moving away from per capita consumption (PCC) towards a target for percentage reduction in distribution input that would cover household and non-household water use and leakage.
The SWDRG has no research budget to calculate an appropriate distribution input, but Russell believes it should not reflect current ‘business as usual’ policy: “The carbon targets in the Climate Change Act set future ambition, which is what we should be doing with this.”
The letter set out recommendations for water companies to offer water efficiency retrofitting and water butts to all domestic customers; phase out the installation of dumb meters; and set a target date to install a smart meter in all homes.
Recommendations for water efficient building regulations included adopting 110l PCC as the minimum expectation for new builds rather than a ceiling on ambition. Russell suggested introducing a water performance certificate for all homes and buildings, and requiring new developments to be water neutral or water positive.
To address consumption in the non-domestic market, Russell called on ministers to consider policy options relating to national demand reduction targets such as penalties, reduction obligations and progress reporting. To Ofwat, she advised setting regulatory targets, incentives and funding at future price reviews to support better collaboration between wholesalers and retailers.
The retail market should feature more prominently in PR24, with suggestions including replacing PCC targets with megalitres per day as a more encompassing measure of total water usage and funding of smart meters for business customers, Russell said.
SWDGR was established by ministers to track progress on water demand reduction in England. The Environment Act will include a target for personal water consumption and the introduction of efficiency labels for all water-using household and business appliances.
Russell’s full letter can be read here.