A drop more sustainability

Defra recently launched a consultation on the draft statutory Social & Environmental Guidance to Ofwat as part of the Future Water strategy. The guidance will not have a direct regulatory impact on Ofwat, but will be one of the factors it will need to regard in its role as regulator. The draft guidance considers the role Ofwat could take in pushing forward the policies set out in Future Water.

The role envisaged for Ofwat in delivering the strategy includes:

• A renewed focus on affordability and fairness of charging for water
• A greater emphasis on climate change mitigation and adaptation to be embedded in the water sector
• New consideration to be given to the arrangements for surface water drainage
• The balance between water supply and demand to be carefully considered, with opportunities for water savings and water efficiency more fully examined
• Water quality to remain a priority, with a particular focus on a catchment scale approach and tackling diffuse pollution at source

The Environmental Industries Commission’s (EIC) Water Pollution Control Working Group – which represents more than 80 companies supplying technologies and services to water companies – has welcomed the increased focus on sustainability and environmental responsibilities in the guidance. But, despite embracing several of the policies, EIC members believe the guidance should be strengthened, particularly in the area of sustainable development.

The EIC would like to see Ofwat setting its sustainable development responsibilities as widely as possible, so that social matters – including the promotion and sustainability of employment within the water sector – are addressed. With this in mind, Ofwat should try, the EIC says, to moderate the boom-and-bust trap caused by the current five-year industry investment cycle.

As the EIC has argued, one method of resolving this issue would be staggered investment programmes, so that water companies run to a different, overlapping five-yearly cycle. In its recent consultation on the next Periodic Review, Ofwat recognised the issue of the boom-and-bust cycle and proposed to tackle it by requiring water companies to prepare 25-year strategic direction statements.

But, given that this is in effect a long-term business plan, it is difficult to see how it will have more than minimal impact on the established five-year investment cycle. In the short term, the guidance to Ofwat should include, the EIC says, the requirements to:

• Ensure the 25-year strategic direction statements contain clear investment priorities and how water companies will maintain investment progress across the five-year cycles
• Actively assess water company proposals for encouragement of environmental innovation

For some time, the EIC’s Water Pollution Control Group has been championing the cause of greater energy efficiency in the water sector. The EIC has welcomed the guidance’s requirement that water companies should reduce CO2 emissions through the Carbon Reduction Commitment scheme. The EIC also supports the fact that Ofwat will be encouraging energy efficiency, maximising energy production and promoting alternative renewable energy sources. In the future, the balance between supply and demand of water will be put under increasing stress. Summer rainfall in the UK is predicted to decrease as a result of climate change. EIC has welcomed the focus, in the guidance, on water companies’ responsibility to increase water efficiency.

The UK faces major challenges from increasing levels of flooding. Sustainable Urban Drainage Systems (SUDS) offer advantages over traditional drainage methods.

SUDS seek to reduce surface water runoff and improve urban water quality by mimicking natural processes, such as infiltration and attenuation through vegetation and wetlands. Use of these systems has been promoted in national and local planning policy. Guidance on their design has been available for several years. But implementation of these techniques has been much lower than expected, and they are far from being accepted as standard practice in designing surface water drainage systems.

The EIC’s working group recently investigated why this was, and what needed to be done. It found the main problems centred around administrative and institutional issues, rather than technical ones.

In particular, the issue of adoption – in which a drainage authority agrees to accept a new system and maintain it as part of the surface water drainage network – forms a real barrier to widespread use of SUDS. The government’s water strategy presents a major opportunity to change the approach to urban drainage. The EIC has welcomed the direction Ofwat has taken in encouraging companies to engage with local authorities over planning for surface water management and sustainable drainage systems. This should facilitate a greater level of uptake of SUDS.

The EIC has also hailed the fact that Ofwat will ensure water companies take action to protect their assets from potential climate change effects, such as increased incidence of flooding. The use of a risk-based approach to this potential problem was particularly welcomed by the EIC.

EIC members believe catchment-based regulatory approaches should be adopted to ensure environmental benefits are maximised within each river basin in line with the requirements of the Water Framework Directive. They encourage the principle that Ofwat should support water companies that want to adopt innovative approaches to improving water quality.