Severn Trent Water has published a new report setting out its climate change adaptation plans to 2020 which include doubling the number of sustainable urban drainage projects, reducing leakage by 6% and giving up around 85Ml/d of abstraction licenses.

Introducing the Future Proofing report, Severn Trent said two changes in the regulatory framework means that its ability to successfully identify and adapt to climate change is now intrinsically linked to the firm’s financial performance.

The first is the introduction of Outcome Delivery Incentives (ODIs) accompanied by performance Commitments, some of which are underpinned by financial penalties and rewards. Severn Trent’s performance over 2015-20 will be measured through 45 performance commitments, 33 of which have ODIs associated with them. The majority of the ODIs are related to the weather either directly or indirectly, thereby creating a link between financial incentives and the impacts of climate change.

The second change is the move from separate price regulation mechanisms covering operating expenditure and capital investment to a single one covering total expenditure (totex).

Severn Trent said the change had enabled the firm to deliver its service through the most efficient and sustainable route, whereas the traditional route may have focused on delivery through capital expenditure.

The report says:

“Our plan does also include significant capital investment but the freedom of totex allows us to address climate change in the most appropriate and sustainable way.”

Threats from climate change identified in the report include increased heavy rainfall events which  will accelerate runoff from land, increasing concentrations of pollutants such as pesticides and nitrates entering the watercourse and decreasing raw water quality.

Increased temperatures could also have an impact on water treatment through increased bacteriological growth.

£250m Birmingham Resilience Scheme is biggest adaptation measure

The Future Proofing 2015-2020 adaptation report includes Severn Trent’s biggest ever investment to provide an alternative water supply to the city of Birmingham via the £250 million Birmingham Resilience Project.  Other highlights include:

• reducing leakage by 6% and fixing leaks within 24 hours.
• saving 25Ml/d through water efficiency.
• protecting vulnerable communities from failure of three sections of aqueduct at a cost of around £67m.
• collaboratively working with land owners to improve water quality in 21 catchments, investing £21m.
• investing over £230m in water treatment works to improve treatment processes and reduce risk.
• doubling the number of sustainable urban drainage projects
• giving up around 85Ml/d of abstraction licenses which are currently deemed to be environmentally unsustainable, as part of the national environment programme.
• tripling the number of projects where Severn Trent works with others to improve local river environments.
• becoming more digitally savvy, increasing the accuracy and speed of information and response times in order to make better decisions during extreme weather events.

Severn Trent said its plans are not only about capital investment in traditional hard engineering projects; instead it has developed a diverse programme of work which considers other, more innovative, types of interventions.

These include a significant expansion of catchment management work to improve water quality and a commitment to working in partnership to deliver more sustainable approaches to drainage.

Significant R & D programme will deliver further innovation

The report says the water company is also committed to a significant R&D programme which will deliver further innovation and improvements to cope with future climate change.

It also flags up some issues where the water company believes wider reform would improve the way the wider water sector adapts to climate change. One of its priority areas is the legislative and regulatory framework which still operates in favour of more connections to sewers, at a time when the burden on the system is rising with climate change.

In Severn Trent’s view either the automatic right to connect to sewer systems should be completely removed, or charges for connecting new developments should reflect the full costs that they impose on the sewerage system. Both these options would lead to more sustainable urban drainage systems (SUDS).

The report also says that common standards of resilience for the most critical national infrastructure, particularly electricity and communications, which would help reduce interdependency risks.

Reform of the water abstraction regime is described by Severn Trent as urgently needed.  The utility says future water scarcity driven by climate change needs to be fully reflected within the allocation and pricing of abstraction licences. Flexibility also needs to be built in to facilitate a rapid response to extreme drought events.

Click here to download the full report