Solving water’s north-south divide

You don’t have to have a degree in meteorology to work out that it rains more in the north of England than in the south: an acquaintance with the back catalogue of indie rock legends The Smiths will do the trick.

For years, there has been growing concern in the increasingly congested south east about constrained water resources.

A desalination plant, which is something one might expect to find in Dubai rather than near Dagenham, has been operational on the Thames since 2010.

Shifting some of the north’s excess water to the south, which is forecast to become more parched at the same time as it faces increasing population pressures, seems like a no-brainer given the regional mismatch in resources.

The National Infrastructure Commission (NIC) agrees, judging by a report that it published last week.

The publication of the report, which will form part of the NIC’s upcoming National Infrastructure Assessment, has been brought forward to feed into Ofwat’s current price control review process.

To guard against the increasingly frequent risk of drought in the water stressed south, the government’s infrastructure adviser recommends that by the 2030s “at least” 1,300 million litres per day (Ml/day) should be provided via a combination of a national water network and additional supply capacity.

Only about 4% of the UK’s current water supply is currently transferred from one part of the realm to another. The most well-known examples of inter-regional transfers are the Victorian aqueducts which continue to supply Birmingham and Liverpool with Welsh water.

Security of supply is one of the top items on customers’ agendas, says Tony Smith, chief executive of the Consumer Council for Water (CCW).

“It makes sense to get water flowing into areas where there is less. If it dramatically improves water supply, it would be a good thing.”

Water doesn’t need to set up its own version of the National Grid to pipe supplies from the Scottish Highlands to London, says Phil Graham, chief executive of the NIC.

Instead, transfers could be carried out by improving interconnections between companies’ existing networks. The NIC proposes that water could be transferred by pipelines and pumping stations as well as existing infrastructure and networks of rivers and canals.

Improved transfer infrastructure could potentially provide about 700 Ml/day extra capacity, estimates the commission.

The cost of providing this extra capacity via transfers compares well with building new supply infrastructure in the regions where it is most needed, according to the NIC’s analysis.

And it would boost the ability of the overall system to adapt to potential droughts, says Graham: “It creates flexibility in the system.”

Long or complex transfers can be energy intensive, the NIC report acknowledges. A Water UK briefing on transfers points out that water is heavy and so more expensive to shift around the country than electricity or gas.

However building extra capacity has environmental downsides too, says the NIC.

Reservoirs may be a good value option for storing large volumes of water but swallow up large areas of land, which is in scarce supply in the most drought prone parts of the UK. Desalination meanwhile is highly energy intensive and produces highly polluting waste.

Graham says that creating a transfer system would better enable water companies to identify where additional supply capacity is most required.

But the key barrier to greater water transfers, identified by the NIC, is the way the price regulation regime incentivises companies to build their own reservoirs because they provide greater control over their asset base.

Water companies have already started to discuss transfer arrangements as part of the current Ofwat price control consultation.

The NIC’s solution is a wider roll out of the direct procurement mechanism used by Ofwat to kickstart the delivery of the Thames Tideway Tunnel.

Graham argues that the costs of providing this additional infrastructure will “not be excessive” especially because they will be spread across a 20 to 30 year period.

And the costs of doing nothing will be a lot greater than having to import water from abroad, he warns: “It’s absolutely nowhere near as expensive as not tackling these problems and then dealing with them when drought occurs with tankering or importing water from abroad.”

But he says that moves to set up a transfer system will “undoubtedly” require a steer from the national level

“Part of the reason this hasn’t moved much is lack of clarity over long term ambition. We are trying to give the industry the certainty of what the long term aim is.”

However boosting supply on its own won’t solve the problems of water stressed parts of the UK, according to the NIC.

It also recommends that the water industry should be set a goal of halving leakage rates, currently around 2,900Ml/day, by 2050 with Ofwat setting five-year targets for each company on the way.

The CCW’s Smith agrees with the NIC that efforts to tackle leakages are vital to underpinning the credibility of efforts to boost investment in supply.

“One of the biggest barriers to customers changing their own behaviour is if they believe a water company is wasteful of their resource.”

The slowdown in progress on tackling leaks since the Noughties, identified in the report, reflects the cost benefit calculation Ofwat uses to help determine investment in tackling leaks.

Smith says: “The problem with that methodology is that it doesn’t take account of the reputational effect and customer behaviour. It should have done.”

In a further effort to improve management of water demand, the NIC recommends the compulsory roll out of meters, which the report estimates would save around 400 Ml/day.

The commission also calls on the Department for Environment, Food and Rural Affairs to publish new regulations by the end of next year to require water companies to consider systematic roll out of smart meters.

These measures would cut average consumption in England from the current 141 to 118 litres per person per day, the report estimates.

Given the buffeting they have received over the introduction of electricity smart meters, ministers will probably need convincing that a further roll out makes sense. However north-south transfers of water is a techno-fix whose time may have come.