Yorkshire Water has set out a multi-billion pound business plan for the five year AMP7 investment programme 2020-25, which includes a 40% reduction in leakage by 2025.

The water company is aiming to deliver a step change and significantly improved performance in key service areas identified as most important to its customers:

• Leakage will reduce by 40% between 2018-25
• Reducing internal sewer flooding by 70% between 2018-25
• Pollution incidents reduced by 50% between 2018-25
• Interruptions to supply reduced from 7 minutes to 2 minutes or less, reducing the impact on customers

Cost efficiency is also a key focus of the water company’s PR19 plan – Yorkshire Water said it was “particularly pleased that by embracing the potential of new markets” it had been able to address its one area of historic weakness relating to bioresources costs.

As the needs of industrial customers have changed, the utility has been able to invest in new technology to reduce costs and increase the energy output from bioresources assets, together with anticipating the potential of the new market by undertaking a major market testing exercise. By combining the results of the market testing and the new technology, Yorkshire said it will be able to reduce bioresources costs by 23%.

By challenging established engineering norms and standards, the company has secured over £50 million in efficiencies through the redesign of activated sludge infrastructure, from an innovation investment of just £250,000.

Yorkshire Water’s plan includes its largest ever environmental programme to meet its obligations under the water industry national environment programme (WINEP) - the programme represents almost 20% of its proposed totex spend and is some three times larger than at PR14, the current five year 2015-19 investment period. The plan says customers feel that while the WINEP is undoubtedly large, they are “comfortable to pay for the improvements to the environment.”

The spend will deliver a broad range of environmental improvements, with a particular focus on the removal of phosphorus from river water. To meet the new standards Yorkshire will need to invest at 80 of its wastewater treatment works.

The company is also aiming is to have at least 50% of customers’ contacts via digital channels by 2025.

The plan also draws attention to several opex cost pressures Yorkshire Water is facing that it has been unable to offset. These cover changes to how it accounts for software licences, increased expenditure on cyber-security, costs arising from the impact of the Traffic Management Act for when it undertakes roadworks, and recent increases in business rates. These costs amount to some £100 million, contributing £7 to an overall bill increase of around £14.

Linked to trading, Yorkshire Water’s company land strategy is pursuing more sustainable methods of achieving value from its land, by exploring opportunities to offer the use of segments of the land in exchange for added value.

The plan states:

“We believe this is an advantageous approach to tendering for specific solutions, as we are not defining how the land should be used, giving the market the greatest opportunity for innovation.”

A pilot investigation has identified ten operational sites with development opportunities to achieve more value, including:

• Flood risk alleviation
• Grid-scale energy storage
• Large scale solar power on land and reservoirs
• Recreation and tourism.

Next steps include a systematic review of land use, its value and liabilities across the Yorkshire Water estate, in addition to clarifying which of the ten sites can be made available to realise the opportunities. The water company is proposing to advertise a greater range of land opportunities in the 2020-25 period through the Yorkshire Water markets portal it is developing to facilitate market development and provide transparent ways for both regional and national trading.

The portal is intended to be a one-stop shop for all market opportunities that will be available from 2020, providing a route for:

• Exposing potential opportunities to the market, maximising value and encouraging innovation,
• including market testing to find the best solutions.
• Organisations or individuals to offer services or assets (physical or virtual assets, such as water abstraction licenses).
• Receiving information on innovative ideas, processes and methods in the market.

The plan says:

“The portal will allow us to provide timely and detailed information on our business needs, maximising the opportunity for markets to support us to meet our customers’ expectations. Our procurement process will support the portal, enabling us to work with a wider range and variety of suppliers.”

Click here for more information about the plan