Weekend press: Water firms to spend £272bn on upgrades  

In our latest round-up of the weekend’s national news coverage, Moody’s estimates that water companies are planning to spend £272 billion on upgrading sewage infrastructure over the next 25 years. Elsewhere, experts warn that new UK electric car charging laws do not solve all issues and Southern Water apologises for floods on the south coast.

British water companies ‘to spend £272bn’ on upgrades

The 17 water and sewerage companies operating in England and Wales plan to spend £272 billion upgrading sewage plants, outfalls and drinking water facilities over the next 25 years — more than three times the businesses’ combined value, according to Moody’s, the credit ratings agency.

Moody’s, which rates the creditworthiness of bonds issued by governments and companies, based the assessment on long-term plans included in funding submissions to Ofwat, the industry regulator.

The companies, which have been accused of not doing enough to stop sewage pollution of rivers and beaches, are asking Ofwat to increase prices over the next five-year regulatory period, from 2025 to 2030, but have also included longer-term projections.

Moody’s said the £272 billion figure — more than triple the companies’ combined regulatory capital value, a proxy for their market value — was subject to “significant uncertainty” as it faced regulatory scrutiny and sensitivity to increased bills.

Most of the spending (70 per cent) will be on improvement to wastewater infrastructure, with Moody’s saying that £70 billion would be spent on sewage outfalls alone. Work to improve the resilience of drinking water provision against drought will be concentrated in the southeast of England.

Spending from 2025 to 2030 should total £40 billion, Moody’s said, about triple what was invested in the previous five-year regulatory period. The average water bill would have to go up by about a third to pay for the extra work.

The companies were likely to have to raise about £12 billion in new equity over the period to balance the borrowing needed to fund the work.

“Heightened levels of concern about discharge of untreated sewage into rivers … and in relation to financial resilience, have resulted in considerable media attention and scrutiny of water companies … These reputational risks could lead to increased governmental, political and/or regulatory intervention,” the company said in a recent bond prospectus.

The Times

Expert warns new UK electric car charging laws do not solve all issues

New driving law changes approved this week will not solve many of the big issues affecting motorists, according to a leading expert.

Alok Dubey, Regional Director for Western Europe at Monta suggested that new electric car charging rules didn’t go far enough.

Earlier this week, The Department for Transport announced owners would benefit from “easier and more reliable” public charging as a result of new tweaks.

The new measures will ensure prices across charge points are transparent and easy to compare while any new bays must be fitted with contactless payment options.

A new 24/7 helpline will also be introduced to report any issues accessing charging on public roads.

Mr Dubey has backed the new updates but admits there is a lot more that needs to be solved.

He said: “Whilst it is welcome news that the new legislation should help to ensure that charge point prices are transparent, reliable and easy to compare – it does not address the issue of availability, nor the provision of multiple payment options, with many chargepoints only accepting one method of payment.

Providers must also make their data accessible so drivers can easily find a free chargepoint while travelling.

“Identified in a recent YouGov survey we commissioned, the research revealed that almost 20 percent of respondents with EVs experienced issues with charge points not accepting their preferred payment method, and 45 percent of respondents without EVs cited a lack of charge points and infrastructure as the top reason why they didn’t own an EV.”

ZapMap data shows a massive divide in the number of charging stations across the country.

London makes up almost 35 percent of all public devices in the country with a whopping 17,365 plugs.

Mr Dubey added: “As much as the new legislation is welcome news, the momentum must continue and the UK charge point infrastructure, and its accessibility, must expand to help give the British public confidence that there will be a reliable charging network for them to use and that they can charge their EV where and when they need to, and that they will be able to pay using their preferred method!”

The Express

England to diverge from EU water monitoring standards

The UK government is to diverge from the EU’s standards for monitoring water quality in England, it can be revealed.

Campaigners fear the change of approach could lead to more pollution in England’s rivers and waterways if the new measuring methods are less rigorous.

While in the EU, England was covered by the water framework directive (WFD), which meant a national chemical and ecological survey of rivers was conducted annually. After Brexit, the WFD was transposed into English law but the government removed the requirement to conduct annual tests.

This is the latest example of the UK diverging from EU environmental standards. Recent analysis found that many toxic chemicals and pesticides banned in the bloc since Brexit are not outlawed for use in the UK. Ministers have also sought to rip up EU-derived sewage pollution rules for housebuilders.

In 2019, the last time the full water assessments took place, just 14% of rivers were in good ecological health and none met standards for good chemical health. The government has said it does not intend to deliver a complete update until 2025, the latest permissible date under the new WFD.

The Guardian can reveal that the government will be using its own, as yet undisclosed methodology to assess river health. Activists say this may make it harder to compare the state of the country’s rivers against those in the EU, and will leave the public in the dark over pollution from sewage and agriculture.

Government officials met stakeholders to tell them about the change. A source from an NGO present in the meeting said: “When asked how this would affect assessments against the target set out in the government’s environment improvement plan, officials commented that this data would no longer be used for that purpose, and that Defra were looking to use the Natural Capital and Ecosystem Assessment (NCEA) process to assessment performance. I question how developed the work on the NCEA is and whether this is suitable.”

A spokesperson for the Environment Agency confirmed to the Guardian that WFD data would no longer be used for the assessments. They said: “A pioneering partnership between Defra, Natural England, Environment Agency, Forest Research and the Joint Nature Conservation Committee, NCEA blends capability, expertise and experience to build a richer, more comprehensive picture of our natural environment, monitoring quality and quantity, assessing the impact of or need for interventions and helping to manage and protect our natural capital.”

It is now unlikely that any data revealing whether or not the situation has improved since the 2019 study published in 2020, that shamed the government by showing no English river was in good chemical condition, will be published before the next general election.

Stuart Singleton-White, of the Angling Trust, said: “WFD has been the bedrock of us understanding the state of our rivers, lakes and groundwater. It does not give a full picture, but it does provide a useful starting point. Past assessments have shown things are getting worse, not better. To now not have a full assessment in 2022 and have to wait to 2025 … simply sows confusion and leaves the public in the dark when it comes to properly understanding whether our rivers are getting better or worse.”

Government officials told the stakeholder meeting that in 2022 only a limited number of water bodies were assessed due to the Covid-19 pandemic and budget cuts. They told those present that they would use other monitoring data to keep their assessments of water quality on track, but that they would not use the limited 2022 assessments to extrapolate to a national picture as this risked creating a bias in the data. The 2022 data showed that the condition of the sites assessed had worsened.

The Liberal Democrats’ environment spokesperson, Tim Farron, said: “Instead of clamping down on sewage dumping, ministers have let water companies off the hook and scaled back assessments so we could know exactly how much damage has been done. It is frankly a disgrace. The whole system needs a complete overhaul. That means abolishing Ofwat and setting up a new regulator with real teeth and ensuring that testing is carried out regularly so we can get a full picture of the damage being done to our countryside.”

An Environment Agency spokesperson said: “Improving water quality is one of our highest priorities. We work through plans established under the water environment regulations to guide our permitting and enforcement. This work must be driven by a clear evidence base and we are working with partners to provide better information to enable this, including more real-time data. The next comprehensive update of classifications in all water bodies will be 2025. No significant changes to the classification methodology are planned – including changes to one out, all out. Every single water body will receive a classification.”

The Guardian

Explosion fears over Inkberrow battery storage site plans

Residents near a planned solar farm have called for tighter safety measures over fears a battery storage facility could explode.

A 279-acre Roundhill Solar Farm could be built off Earls Common Road, near Inkberrow, under plans by JBM Solar.

In a submission to planners, Hereford Fire and Rescue Service said the explosion risk in storage facilities was “unfortunately very real”.

JBM Solar said it would be fitted with safety measures to prevent fires.

Residents had previously submitted a 95-page formal objection to the plans in which they said it would impact on wildlife habitats and lead to the destruction of woodlands.

Assistant Chief Fire Officer Adrian Elliott said the risk of explosion was “very real” and “becoming more common” as more battery storage facilities were built across the country, the Local Democracy Reporting service said.

JBM Solar said the batteries it intended to use would have built-in automatic fire suppression and would be monitored individually 24/7 so any faults could be isolated and batteries could be shut off before any potential fire could occur.

The solar panel company said the batteries would also be spread out and not concentrated in one location – which would reduce the risk of a fire spreading.

The plans have attracted hundreds of objections from residents calling for the land – which they claim inspired the Shire in JRR Tolkien’s Lord of the Rings – to be protected.

JRR Tolkien grew up in Sarehole in the 1890s which was then part of Worcestershire but is now in Birmingham and, while he would have been familiar with the area, there is no specific link to the land in question.

JBM said the site was temporary with panels to be removed after 40 years.

BBC

UK electricity network faces ‘mind-boggling’ scale of change over net zero

The 820,000km of electricity cables criss-crossing Britain have proved a solid investment for those who swooped on the electricity network sector post-privatisation in 1990.

International investors including Warren Buffett, Li Ka-shing and major global infrastructure funds have enjoyed the comfort of owning regulated monopolies in a relatively sleepy sector that attracts less of the political heat than those producing or selling energy.

They are in for a sharp awakening. The sector’s crucial role in delivering the UK government’s legally binding targets to cut carbon emissions requires growth and investment on a scale not seen in decades, putting them at the centre of difficult decisions over bills and community rights.

The exact shape of the future system is unclear. But the direction of travel is the “electrification” of the economy using clean energy, with wind turbines, electric cars and heat pumps taking the place of coal-fired power stations, petrol cars and gas boilers.

This could require more than 460,000km of new onshore electricity cables by 2050, transporting up to 200 per cent more power from far more diverse and complex sources, according to the top end of industry and government projections. The onshore network alone could require total investment of as much as £350bn by 2050, the government has said.

“It’s mind-boggling,” says Sir John Armitt, chair of the UK’s National Infrastructure Commission, of the scale and pace of the new infrastructure required. “These are big challenges.”

The transition has endured a bumpy start, with mounting complaints about new power projects waiting years to connect to electricity networks. In Britain these are now owned by six groups including FTSE 100 giants SSE and National Grid, Buffett’s Berkshire Hathaway Energy, and Li’s CK Infrastructure Holdings.

About 330 gigawatts of new electricity generation or storage projects are currently waiting to connect to the system, according to Lawrence Slade, chief executive of the Energy Networks Association, the industry body. That far outstrips current installed capacity and projections for future need, although not all projects are likely to come to fruition.

About 2GW has been connected at the local distribution level so far this year, while about 33GW is set to join the transmission level over the next two years, Slade adds. “Things are moving,” he says.

Industry points to outdated queue rules and slow planning timeframes holding up work. The average time taken for big infrastructure projects to get a planning decision has climbed from 2.6 years to 4.2 years over the past decade, according to the NIC, with 58 per cent now challenged in the courts through judicial review.

“The whole system just gets bogged down if you’re not careful,” says Armitt.

A flurry of reviews are under way or have concluded to try and speed things up, with Nick Winser, the government’s first “electricity networks commissioner”, to publish his within weeks.  “We need a national conversation,” says Keith Anderson, chief executive of Scottish Power, warning of the risks of any perception of “riding roughshod” over local concerns.

Click here to continue reading this feature.

Financial Times

Hastings floods were tragic and plan needed – Southern Water

Southern Water has apologised to residents after “tragic” floods damaged homes and businesses in their town.

A shopping centre in Hastings had to be evacuated on Saturday after streets were flooded following heavy rain.

Head of waste water control at Southern Water Richard Martin said: “About 16 people had to be taken out of their houses – that is not acceptable to me.”

One woman said she had lost “so much money” she did not feel like owning a business in the town centre any more.

Mr Martin told BBC South East: “It was a tragic event with tidal influence from the sea.

“Unfortunately, members of the community had their livelihoods and properties put at risk. I can only apologise for that.”

Priory Meadow Shopping Centre, which was evacuated, remained closed on Sunday but said it hoped to reopen on Monday.

On Sunday, shop workers could be seen cleaning up the mess as the flood water receded.

Hastings newsagent Prativha Paleja said: “It was just awful, there was so much water everywhere.

“We tried to save the stock but we couldn’t. We have lost so much money.”

The flooding came just eight days after East Sussex County Council published a report into the town’s previous episode of severe flooding.

It said the flooding in January was caused by unusually heavy rainfall coinciding with a high tide, an overflowing manhole and a partially-blocked sewer.

Ms Paleja said: “I just feel like it’s not worth having in a business in Hastings town centre any more.”

Michael Turner, an Environment Agency manager, told the BBC on Saturday that Hastings had 50mm (2in) of rain, which he said was “a substantial quantity in a short period of time”.

Mr Martin told the BBC its “assets” had been “operational” but the torrential rain alongside high tides meant the town was “overwhelmed with the sheer quantity and volume of water”.

He said: “We need to work with the local MP Sally-Anne Hart, the local resilience forums, we need to formulate a plan together.

“We won’t resolve this just Southern Water. We need to work collaboratively with our friends to protect the residents of Hastings.”

Conservative MP for Hastings and Rye Sally-Anne Hart said on Facebook: “These rainfall incidents are becoming the norm and we must adapt.

“I continue to push all agencies to work together to ensure the right action is quickly taken so that our residents and businesses are not impacted by this flooding again”.

Hastings Borough Council leader Paul Barnett thanked East Sussex Fire and Rescue Service for its “commitment, professionalism and leadership”.

He said the council was supporting residents who had to vacate flooded properties and he would begin the process on Monday of “establishing why this happened again and why our water infrastructure is still failing us”.

On Sunday, the Environment Agency had multiple flood warnings in place for East and West Sussex.

The Met Office had a yellow rain warning in place and said more wet weather could bring disruption to parts of southern England.

BBC

Utility Week’s weekend press round-up is a curation of articles in the national newspapers relating to the energy and water sector. The views expressed are not those of Utility Week or Faversham House.