South West Water’s £125 million plans to deliver two desalination plants have been pushed back to next year.
Speaking to Utility Week, South West Water chief executive Susan Davy confirmed that the plants would not be delivered this year as previously slated.
Davy was speaking after South West’s parent company Pennon announced an 85% drop in half-year pre-tax profits.
Davy said that the desalination project remains in train with modulised reverse osmosis kits being deployed.
She added that the first site at Par, in Cornwall is now anticipated to be online in 2024 and will process 30 million litres daily. It will require eight miles of new pipework and is being delivered to increase resilience to drought.
South West Water continues to assess its options for a second site and is expected to make a decision on that in the coming months.
Despite the delay, Davy said she was “very pleased” with progress on the first of two desalination plants.
“We are starting with Par in Cornwall and that will be the flagship ,” Davy said. “We are progressing with modularised kits that will be in for 2024, then the network teams are making sure we can transfer and transport the raw water.”
South West Water devised its desalination plans in response to supply constraints in the region. A hosepipe ban in the region ended in September after 14 months.
Davy said the plants will contribute to wider targets to boost supplies in the Cornwall area by as much as 45%.
Using seawater is part of Pennon’s wider plan to make the south west resilient against drier periods. It is also converting its fourth large former quarry to a reservoir and is exploring innovative tariffs to reduce consumption levels.
Specifically, the company wants to offer variable tariffs in the next price review period (PR24) after running a pilot last year to incentivise people to use less water.
The trial saw people living close to Collingford Reservoir offered a £30 bill reduction if reservoir levels recuperated from the dangerously low point seen after last summer to 30%.
When the Par site is delivered it will be only the second operational desalination plant on the mainland UK.
Thames Water added desalination to its resources ahead of the 2012 London Olympics to ensure visitors and athletes to the city had plentiful supplies during the event. The plant in Beckton has not been routinely used and the company faced criticism for it not being used during 2022’s drought, which coincided with planned maintenance.
Southern Water has also put forward water resource management plans featuring a desalination plant to be added on the Sussex coast.
Pennon’s interim results for the six months to 30 September – released today (29 November) – reveal South West Water is on track to achieve 75% of its outcome delivery incentive (ODI) targets set out in PR19 and Bristol is set to meet around 70% of its ODIs for 2022/23.
As the final year of the current asset management period (AMP7) nears, the company’s H2 results show an uptick in capital expenditure of 65% compared to H1 in its water businesses and 87% for the group, which includes Pennon Energy.
The business said pre-tax profit dipped by nearly 85% to £3.2 million in the first six months of the financial year. However, revenue rose 5.4% during the period to £448.6 million, due to increases in the tariffs it could charge customers.