Wednesday 18 December 2019

Ofwat sets out environmental expectations for water companies

Ofwat has finalised its price review for 2020-25 by confirming a major investment programme to improve services for customers and the environment. At the same time it is expecting the water companies to reduce bills for consumers by 12%, about £50 per household.

The regulator has revealed a spending package of £51bn for the next five years. A quarter of this, around £13bn, will be investment dedicated to providing resilient services and a better environment in the face of a growing population and climate change.

Water companies are being urged to cut greenhouse gas emissions and increase the use of renewable energy. Already they have committed to achieving zero net emissions by 2030, and many have bespoke commitments to support this. For example, Yorkshire Water will increase the amount of renewable energy it generates from biogas by 15%, and South East Water will reduce its carbon emissions by 68%.

Ofwat’s review promises £4.8 billion to deliver the National Environment Programme (NEP) for Wales and Water Industry National Environment Programme (WINEP) for England. These programmes will help tackle some of the biggest challenges facing the water environment, from the spread of invasive species to the effects of chemical and nutrient pollution.

The companies, says Ofwat, have been set stretching but achievable performance commitments that will make a real difference for the environment, such as reducing pollution, leakage and water use.

Ofwat will commit up to £469 million for investigating alternative sources of water. This will mean that as well as reducing the amount of water wasted, companies can reduce the amount of water taken from environmentally sensitive sites in the future.