Ofwat set to approve £1.6bn worth of water investment schemes

UK water regulator Ofwat proposed approving 31 investment schemes on Monday, saying they would benefit both customers and the environment.

The proposed investment of around £1.6bn would be executed over the next two financial years, from 2023 to 2025.

It said the investments were intended to improve three areas - improving more than 250 storm overflows, water resilience schemes, and reducing nutrient pollution at 14 locations.

Ofwat estimated that the investment would lead to a reduction of 10,000 spills per year, better water quality at Ilkley on the River Wharfe and Lake Windermere, and increased drought resilience.

Of the total investment, £1.1bn would be dedicated to improving storm overflows and reducing spills.

The second area of investment, water resilience schemes, would receive £400m, which would fund the installation of 462,000 smart meters and other water resource and quality projects.

In total, those projects were expected to deliver and protect 159 million litres of water supply per day.

The third area of investment would be £160m towards reducing nutrient pollution and supporting nutrient neutrality at 14 locations.

“Substantial investment is needed to address the challenges to our water system of storm overflows, river and bathing water quality and drought resilience,” said Ofwat chief executive officer David Black.

“We are pleased that we’ve been able to work with companies and identify significant investments which companies can start well before the next price control period.

“This will bring substantial benefits for customers and the environment and bring them faster.”

In October last year, Ofwat and the Department for Environment, Food and Rural Affairs (Defra) asked companies to propose schemes to accelerate investment in water resilience, storm overflows, and nutrient neutrality.

Early approval of schemes, Ofwat said, would help the sector prepare for a more significant investment programme in the future, and deliver benefits for customers and the environment more quickly.

The regulator said the draft decisions were currently open for consultation, adding that all of the investment projects would need to begin before April 2025, and be completed by 2030.

Additionally, Ofwat said it had identified a further 37 schemes, totalling £376m, that companies could accelerate if they were included in final company environmental plans and address concerns it had raised.

“These new schemes will help accelerate the delivery of the urgent improvements we need to protect our environment,” commented water minister Rebecca Pow.

“It includes £1.1bn of new investment to stop sewage discharges at sites across the country and will deliver a reduction of 10,000 discharges per year in places like Lake Windermere, the River Wharfe, Falmouth and Sidmouth.

“The investment set out here will also provide an important boost for regional jobs, businesses and local communities.”

Reporting by Josh White for Sharecast.com.