Ofwat approves £2.2bn accelerated spending

The water regulator has given the green light to £2.2 billion of infrastructure investment to tackle overflows and rollout smart water meters.

The total investment has increased from £1.6 billion when Ofwat consulted on proposals in April.

The rise, the regulator said, was largely driven by United Utilities revising its plans to undertake more work, which added £576 million across two programmes.

Elsewhere, Portsmouth had funding for a universal smart metering programme slashed from £120 million to £64 million, because the investment the company proposed would run over multiple asset management periods (AMPs).

Southern reduced the scope of its scheme from addressing 600 CSOs in the period to 420, with costs down from £50 million to £35 million.

Companies submitted proposals to Ofwat to accelerate work around overflows, nutrient neutrality and resilience of supply in response to a request by Defra in October.

Reassurance that projects would be funded in the 2024 price review (PR24) means companies can begin critical work sooner than 2025.

The 33 schemes, which will run to 2030, include £1.7 billion for 10 storm overflow schemes in sensitive catchments that have been deemed to pose a risk of harm.

Under storm overflow discharge reduction plans, companies are initially tackling CSOs with higher impact, such as near bathing waters, close to sites of scientific interest.

Other enhancement schemes include seven smart metering schemes to allow the rollout of 462,000 meters between Affinity, Anglian, Portsmouth, Severn Trent, South Staffs and South West.

Six water supply schemes will provide an additional 75Ml/d of water from companies’ water resource management plans (WRMPs) that will deliver supply benefits from 2029.

Elsewhere three nutrient neutrality proposals worth £160 million were cleared by Ofwat to protect ecosystems and improve river water quality at 14 locations.

“The water sector needs to act now to secure future needs of customers and the environment,” said Chris Walters, senior director for the price review at Ofwat. “The schemes we are confirming today will help tackle storm overflows, install more smart meters, provide additional water supply and improve river water quality. In each case the company has demonstrated a clear need and benefits to customers and the environment”.

Ofwat rejected proposals that did not meet its criteria of boosting supply resilience and tackling storm overflows.