Job creation and economic growth could be hampered if water companies defer water efficiency activities at the next asset management period (AMP8) to beyond 2030.
The non-household market operator MOSL warned that Ofwat needs to ensure there are appropriate levels of incentives/penalties in the upcoming PR24 determinations to drive progress towards meeting usage reduction targets.
By 2050, consumption by business customers should be lowered by 9% to counterbalance against predicted water deficits of more than four billion litres nationally.
MOSL said water resource management plans (WRMPs), which feed into PR24 plans, show work is needed to adopt a country-wide approach to smart metering and demand reduction.
Responding to the latest iteration of WRMPs, MOSL urged water wholesalers to rollout smart metering to business customers concurrently with household meters.
This would align with the National Infrastructure Committee’s recommendation to implement compulsory metering beyond water stressed areas by 2025.
MOSL also urged government to be clear about what daily reductions for non-household customers need to be, and whether this will be uniform across all wholesaler regions.
Making progress against the 9% reduction, as set by the Department for environment, food and rural affairs (Defra) should begin in AMP8 to “avoid this being backloaded when it may be too late to avoid water shortages”.
The market operator called out the lack of ambition in some WRMPs.
“We do not believe that undertaking trials around NHH water efficiency measures is aligned with the imminent water security challenges we face as a country,” MOSL said.
Avoiding the looming water shortages has been central to Ofwat’s framework for PR24, with a dedicated £100 million water efficiency fund.
Critics have warned that reducing demand has been overlooked in previous price controls and must not be overlooked any longer.