Water companies need to increase the focus on demand management in their business plans to meet future water resource requirements, according to Ofwat’s John Russell who challenged the sector to step up.
Speaking at the inaugural Utility Week Innovate Pollution Mitigation, Management and Risk conference this week, Ofwat’s senior director said the action he had seen so far is not sufficient. He noted that the headline focus of Defra’s SPS is on wastewater treatment for the first time, but said helping customers to use less water also requires more attention.
“One thing that really needs attention, particularly going into the next AMP is demand management,” he stated. “I still feel the sector has a long way to go to have a coherent plan to push that forward. When you see expectations of water resource management plans, 50% of supply balance is expected to come from demand management. I really struggle to see the plans that match up to that.”
He admitted this is a “tricky” area to approach but said they need to include more explicit detail in their upcoming business plans.
Russell said Ofwat is considering how co-funding of nature-based solutions will work within the next price review but admitted there would not be guidance that could fully cover every possible partnership or funding interaction. “It is something we are thinking about because those nature based solutions are things we really want to see. We want to see a lot more focus on the outcomes and less grey infrastructure,” Russell said.
“These long term solutions are good for the environment, they help with cost, with carbon, but do require for us to do things differently, which is a challenge for us and everyone in the sector.”
Also speaking at the event, Philip Dunne, chair of the Environmental Audit Committee, defended targets set in the sewer overflow reduction plan that critics said lack ambition.
Dunne said there are no quick fix to eliminate the risk of harm from combined sewer overflows (CSOs) and the challenge of improving river water quality.
The MP, whose private members bill was adapted for inclusion in the Environment Act, said there is no benefit to making plans that are not achievable and encouraged companies to focus on the most at risk locations to maximise benefit to the environment. Dunne praised work already underway and scheduled by water companies to improve river water quality.
Following a “lack of regulatory attention going back to 2010” that has permitted wastewater companies to self-report, Dunne called on the Department for Environment, Food and Rural Affairs to take action and ensure investment is accelerated in companies’ business plans. He also underlined the contributions of other sectors to river pollution calling it a “multisector problem”, with agriculture, housing developing, transport and planning departments all having key roles to play.
“It will decades to fix the problem,” Dunne said, adding “there is no quick fix” to rectify underinvestment in underground assets when successive governments have prioritised supply.
He said that with monitoring being rolled out to all CSOs by the end of next year the picture may look worse before it can get better: “This is not even the complete picture because EDM (event duration monitoring) rollout is not complete. This is just the tip of the fatberg.”