Waterwise calls for efficiency to be ‘hardwired’ into PR24

Water efficiency should be front and centre of the next price review, with companies dedicating more resources to demand management, Waterwise has told Ofwat.

In its response to the regulator’s PR24 draft methodology, the water efficiency group said the framework was “lacking in many areas” and called for efficiency to be hardwired into the wider approach of the price review.

Nicci Russell, chief executive of Waterwise, told Utility Week a quantified spend should be included for demand management to equal the prominence allocated to new supplies and leakage.

Waterwise called for a minimum water efficiency spend of 20% of water resource management plan expenditure. However, Russell suggested it could be a percentage of overall business plan spend instead, with an explanation required in cases where this was not set out.

“We need a baseline because now we have regional plans for the first time, which show us the massive gap and water efficiency needs to deliver at least 30% of that so we do need a threshold of some sort,” Russell said.

The Regulators Alliance to Progress Infrastructure Development (RAPID) was formed to identify and overcome obstacles to interregional large-scale water supply projects. No similar scheme for demand management has yet been formed.

“RAPID is spending so much money on looking at the feasibility of supply options while there is zero budget to do the same on the demand side. RAPID should cover both,” she suggested and added that Waterwise wanted to see an equal emphasis on supply and demand. “Considering how much of the pie they are all going to have to deliver, they all should be treated equally,” Russell added.

Elsewhere, Russell noted the draft methodology did not put enough emphasis on how customers use water in their homes. She said it was clear Ofwat recognised the strategic importance of large-scale water efficiency but ultimately it did not have the staff to follow this through to a household level.

The chief executive said her organisation welcomed and supported the overarching challenges set out in the methodology as well as the inclusion of business consumption and net zero for the first time. But she added: “Water efficiency is absolutely not hardwired into the main of the methodology. It looks like something that could be knocked off when you look at the nuts and bolts.”

The group recommended for business plans to be carbon costed as a way to drive investment in water efficiency; for smart metering to be rolled out at pace to save money and resources; and, crucially for the regulator and government to assist where water companies alone cannot succeed.

“We hope this time government, regulators and the industry will massively step up water efficiency work,” Russell said. “We need Number 10 and the Treasury to take water scarcity seriously when they’re making decisions on economic growth, housebuilding, cost of living and net zero. We recognise where policy needs to be developed it won’t be that easy to deliver. But there are easy things we would love government and regulators to take onboard while water companies continue to innovate and increase the scale of their work.”

To bring efficiency into the mainstream, Russell suggested setting targets for smart metering, addressing leaky loos and making water neutrality a compulsory condition for developers in water scare areas.

“We’ve more going on from government, regulators and the industry than we have ever seen before but it’s unfortunately still not going to be enough.”

Water resource management will be a key issue at the Utility Week Forum this 8 and 9 November in London. To find out more click here