UK WATER INDUSTRY RESEARCH

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Regulation research theme

Regulation

Regulation research is primarily driven by the economic regulatory frameworks that the water industry works within, in particular the requirements for water company Business Plans. It also covers the quality regulation frameworks that apply to the water industry, i.e. those that protect environmental and drinking water quality.

This research area covers issues such as customer engagement, metering, assessment of potential changes to regulatory requirements or frameworks, asset deterioration, uncertainty and benchmarking. In particular, a considerable amount of work has been undertaken to produce a Common Framework for Capital Maintenance which has been widely adopted by many companies and their regulators as the process for company business planning and reporting.


Programme Lead(S)

Frank Grimshaw

Regulation
United Utilities Water Limited

 

Sub-categories



 

Projects


 

Eels and coarse fish regulations review and methodology development to achieve cost effective compliance for water supply

Project Status Project Completed


 

Long Term Investment in Infrastructure

Project Status Project Completed

This is a critical project for the industry. At some point the the rate of replacement in the infrastructure network (sewers and water mains) needs to increase. The current rate of replacement infers that sewers will last nearly 1000 years and water mains nearly 200.

The performance of these assets is relatively stable so making the case for additional investment is very hard from a short term economic and performance perspective.

This is fast becoming an intergenerational issue and we may be putting the burden of costs on to future generations.

Ofwat at PR14 took an historical approach to expenditure requirements, and the 'why is the future different' question was largely ignored in their modelling approach.

 

Resilience – performance measures, costs and stakeholder communication

Project Status Project Completed

The Water Act 2014 gave Ofwat a new primary duty to further the resilience objective in the water industry, including highlighting the need for long-term resilience of water and wastewater systems and service provision when faced with increasing external stresses, such as environmental pressures, population growth and changes in consumer behaviour.

 

For business plans, companies will need to be able to:

  • Develop measures and targets which reflect customer priorities
  • Demonstrate that proposed costs are efficient

 

Meeting resilience requirements will also affect supply-demand planning. Updated WRMP and Drought Plan guidance moves water resources planning away from simply testing supply systems against historic droughts, with the intention of better understanding resilience to other types of drought. For example the latest Water Resources Planning Guideline states: “By testing your plan to a number of different droughts and aligning with your drought plan, you should be able to identify areas where resilience needs to be increased to meet customer and stakeholder expectations, or government policy”.

 

Improving resilience can involve choosing appropriate investments in the short-term to reduce risk for future customers, where the probabilities of risks occurring and their impacts are often uncertain difficult to predict. This makes it problematic to develop measures and targets. In addition, communicating risks in order to assess customer priorities poses difficulties.

 

When is ‘surface water removal’ the most cost beneficial solution?

Project Status Project Commenced

Removing surface water from foul or combined sewers offers a number of benefits, both in terms of reducing operational expenditure and flows (and subsequent flooding and spill frequency), as well as offering wider community benefits.

There is an increasing appetite across the water industry to consider and deliver such interventions to help manage a range of drivers, but this appetite is not matched by an in depth understanding of the scenarios and catchment characteristics that make surface water removal options more cost beneficial than traditional engineering solutions.



 

The future approach to price setting in the wholesale value chain

Project Status Project Completed


 

Water Company benchmarking

Project Status Project Completed


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