WATER RESOURCE TECHNICAL FORUM

SESSION 36TH OCTOBER 2017

LOGISTICS

AGENDA

Time Activity

09.00 to 09.30 Arrival and refreshments

09.30 to 09.50Welcome and IntroductionPurpose of this group, expectations

09.50 to 11.10

Presentations covering:• Drought Resilience• WFD and Sustainable Abstractions • Leakage ambition• Metering and Water Efficiency Options • Supply Schemes

11.10 to 11.30 Break

11.30 to 12.30 Open discussion on morning presentations

12.30 to 13.00 Wrap up, lunch and close

WELCOME

MARCUS O’KANEWATER RESOURCES AND CATCHMENTS LEAD

THIS IS OUR 3rd WRMP STAKEHOLDER FORUM

Meeting Content

Sep 2016

1. AMP6 progress / situation

2. Process and timeline

3. Framing the problem

4. Proposed Strategic Environmental Assessment Criteria

April 2017

1. Recap on previous session2. Feedback from last session and actions

driven from it3. The size of the SDB challenge – sustainable

abstraction, climate change, resilience, growth etc.

4. What options do we have, and how to find the right balance of supply side / demand management

5. Visibility of how to engage on wider PR19 plan

Autumn2017

Signposting what is likely to feature in our plan

Spring 2018 Water resource plan consultation feedback

The purpose of the Water Resource Technical Forum:

• To review and challenge the development of our Water Resource Management Plan 2019 so that it reflects and balances the priorities of stakeholders and customers.

• To inform our dialogue with the WaterForum when required

• To shape our PR19 investment plan

OUR STRATEGIC FRAMEWORK

OUR REGULATORY TIMETABLE

Date WRMP PR19

20

16

SpringDefra, EA and NRW publish

Guidance

Summer Pre-consultation starts

20

17

December draft WRMPs submitted to

Defra

Ofwat publishes price review

Methodology

201

8

January draft WRMPs published for

public consultation

July Statement of response to

consultation published

September Companies submit business

plans to Ofwat

20

19

TBCDefra Secretary of State

decisions on WRMPs

June / JulyOfwat publishes standard

company draft determinations

DecemberOfwat publishes final

determinations

Supplying around 8 million people

HOW MUCH WATER DO WE SUPPLY?

• In 2016-17 we put around 1840Ml/d treated water into supply.

• 1Ml/d = 1000,000 litres = 1000m3

• 1Ml/d is equivalent to around 7,000 people’s daily use

1989 1995 2000 2005 2010 2015 1995 2000 2005 2010 2015

OVERVIEW OF OUR EMERGING WRMP

The PR19 water resources challenge is driven by:• Removing legacy of unsustainable abstractions

and meeting future WFD objectives;• Ensuring resilient supplies;• Accommodating future climate change

impacts and uncertainty;• Meeting future growth in demand;

The draft WRMP is likely to include:• Stepped change in demand management

activity;• Further reduction in leakage beyond AMP6

6%;• Increase in household metering;• New strategic river abstraction;• No increase in our current drought resilience;• Opportunities for integrated solutions which

improve our supply resilience as we address these challenges.

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Projected deployable output losses

Baseline Water Available for Use

Reduce unsustainable abstraction

WFD No Deterioration

Climate change

Projected pressures on water resource availability

SIGNPOSTINGThings to look out for in our draft WRMP:

• Preserving the current level of drought resilience.

• A balance of short, medium and long term measures to improve and protect the water environment from the effects of abstraction.

• Increased ambition on leakage, in line with Ofwat’s 15% industry challenge

• Exploring the role that increased metering could play in our region to reduce consumption

• A step change in activity to encourage efficient use of water.

• Potential new sources of abstraction to support Notts and Telford supply areas.

• Actively looking at trades in and out of area to take a more optimal approach nationally

dWRMP 2018

DROUGHT RESILIENCE

WHAT IS DROUGHT AND ARE WE DROUGHT RESILIENT?

There is no single agreed definition of a droughtBut it is definitely a prolonged period of below average rainfall

There are:

• Different durations and different severities

• Regional variations

• Droughts that affect some sectors more/ less

• Potential impacts on the environment and customers – restrictions on use

Focus on how drought affects our water resources management plan (WRMP)

WRMP14 - WORST DROUGHT IN OUR FLOW RECORD

The last time our customers experienced a hosepipe ban was in 1995-96.

We plan to cope with the worst drought in our record (1975-76).

In 2011-12, despite the driest 12 month period on record for our region, we narrowly avoided the need for hosepipe bans . However, other companies did need to impose restrictions.

We know more extreme events could happen.

But what is the proportionate level of drought contingency to plan for?

WRMP19 - INVESTIGATING EXTREME DROUGHTS

For WRMP19 we have identified plausible, more extreme droughts to test the resilience of our system and processes.

To do this we have adopted three approaches:

1. Analysis of historic weather data which includes significant late 19th Century droughts

2. Development of stochastic* drought scenarios which are more extreme than those experienced in our historic records

3. Testing our resilience using design drought scenarios which range from mild to extreme in severity (the extent of rainfall or river flow deviations from average conditions) and duration (months to years) - ‘Drought surfaces’

* Stochastic or probabilistic methods produce droughts that are plausible but haven’t actually happened.

19TH CENTURY DROUGHTS• Extended flow series to 131 years covering the period 1884-2014

• The late 19th century included several droughts with different characteristics

• The extension period 1884-1919 includes 2 significant droughts (1) 1887-89 and (2) 1892-97

• Analysis of drought using the Standardised Precipitation Index and Standardised Streamflow Index.

200 ‘what if’ drought scenarios generated based on statistical

relationship between observed rainfall and climate drivers e.g. North Atlantic

Oscillation.

We used extreme value analysis to estimate the return period of

droughts with specific durations e.g. 18-months. We searched 200

scenarios for these ‘target’ river flows to identify scenarios with return

periods between 1 in 190-years and 1 in-1000 years.

We use our water resource model to calculate DO for a range of scenarios to better understand our resilience to

more extreme drought.

STOCHASTIC DROUGHT SCENARIOS

• Drought onset is April 1923

• All droughts are based on the same drought ‘profile’ therefore drought is spatially and temporally

coherent across the region.• Drought profile has seasonal component e.g. higher winter flows and lower summer flows.

• We took a different, proportionate approach to groundwater only zones

Assumptions

DROUGHT RESPONSE SURFACES

• Produce drought response surfaces for the WRZs we model in Aquator.

• Drought response surfaces originally outlined in EA “Understanding the performance of water supply systems during mild to extreme droughts”

• Selected hydrological drought scenarios-

• Durations between 6- and 60-months

• Severities between 90% and 10% of long term average

(LTA flows)

• Totalling 81 drought scenarios

Aim

RESULTS

• We are resilient to the 1 in 200 year droughts we have modelled

• Not proposing any drought specific AMP7 investment to improve resilience but need to spend on supply / demand to maintain current levels of service

• We have done work to understand customers’ willingness to pay and are exploring customers views further via ‘immersive research’ – see next slide

• We are also updating our drought plan and can provide you a copy of our 2014-19 plan if you want one

CONCLUSIONS ANDNEXT STEPS

DROUGHT STORYBOARD

SUSTAINABLE ABSTRACTION: DEALING WITH WFD

OUR SUPPLIES NEED TO BE SUSTAINABLE FOR THE FUTURE

We need to remove the legacy of unsustainable abstraction and provide more sustainable supplies for the future.

To meet Water Framework Directive objectives, we need to reduce our reliance on certain sources and change the balance of use between our groundwater and surface-water.

Around 130 of our current sources could be at risk.

The uncertainty is around the pace at which we need to put adaptation and prevention solutions in place.

A BRIEF HISTORYOUR RSA PROGRAMME

RSA = Restoring Sustainable Abstraction

WE HAVE WORKED WITH EA TO AGREE SCOPE OF WINEP2

• We already know a lot about how our sources impact on the environment. We have been investigating over many AMP cycles and we have lots of data, models and tools that can allow us to make no-regret decisions.

• We want to prioritise activities based on the balance of risk to the environment and to water supply.

• Experience from AMP6 tells us that the scale of the WFD challenge means it would be impractical to use a ‘traditional’ site by site investigation approach. Instead, we want to prioritise those water bodies where we already have multiple lines of evidence.

• The WRMP will propose strategic solutions to improve those water bodies which we know face multiple pressures and where we know we play a role.

• For water bodies where we are less certain of the causes of WFD failure, we will take a more cautious approach to investigate and prevent future deterioration.

OUR PLAN BALANCES RISK TO ENVIRONMENT AND CUSTOMERS

Our WRMP will include solutions that balance risk to the environment with the need to preserve customers’ security of supply. Our solutions will fall into these categories:

Adaptation: • Reducing abstraction in water bodies with multiple water resource pressures and providing new,

alternative sources of supply. These will be strategic WRMP water resources and demand management solutions with likely sustainability reductions.

Prevention/Mitigation: • Enhanced source abstraction management controls through more ICA, telemetry, new distribution

links to allow alternative sources of water (prevention).• Local flow support or hydromorphology measures to improve environmental resilience; catchment

solutions and partnership working; localised demand management (mitigation)

Investigation: • Investigations at sites in AMP7 where the potential for WFD impacts / deterioration are not clear

(little/no data)

WE ARE ALREADY USING THIS APPROACH IN AMP6

Bromsgrove groundwater unit and the Battlefield Brook.Battlefield Brook rises on the Lickey Hills and flows south westwards to become the Sugar Brook in Bromsgrove. In its lower reaches it flows through Sanders Park; a priority Biodiversity Action Plan site and an important public amenity.

The brook flows over an ‘over-abstracted’ groundwater unit, and historically the stream used to dry regularly.

Our 2014 WRMP put forward a two phase improvement plan covering AMP6 and 7:

1. Local solution: naturalise stretches of the water course to improve habitat and ecological resilience.

2. Strategic solution: reconfigure the existing public water supply system to reduce long term abstraction and provide additional flow support to the brook.

LEAKAGE

SEVERN TRENT’S PAST PERFORMANCE

Following the 1995-96 drought, our intensive focus on leakage and water efficiency drastically reduced total water demand.

Past WRMPs have driven our leakage targets. Our AMP5 leakage programme was the most ambitious in the industry and with our AMP6 targets mean we will have reduced leakage by 15% between 2010 and 2020.

The success of our leakage and demand management ambitions mean that total demand for water has declined over time despite a growing population.

LEAKAGE DECISIONS WILL TAKE ACCOUNT OF LONG TERM COSTS

• Any decisions around leakage reduction targets need to take account of Government policy expectations that company leakage should never rise AMP by AMP.

• Without proactive investment, leakage will increase over time due to the aging of the network. As the network ages we have to work harder just to prevent leakage deteriorating.

• Our supply / demand investment modelling takes into account the true long term costs of preventing leakage deterioration as well as options to drive leakage down.

• We use the model to assess the long term costs of achieving different levels of leakage. Our AMP5 analysis illustrated that over a 25 year horizon we will need to increase mains renewal rates and materially increase active leakage control activities just to hold leakage stable.

• For our new WRMP we are testing the long term cost implications of different AMP7 leakage ambitions.

OFWAT’S CHALLENGE TO THE INDUSTRY

Ofwat’ PR19 methodology has challenged water companies to target a minimum 15% leakage reduction in AMP 7.

Our investment modelling illustrates the scale of this investment challenge.

Our WRMP will explore how to achieve a 15% leakage reduction target. To deliver this leakage reduction we will need more innovation and we will need to integrate with other demand management solutions:

• Supply pipe adoption• Large scale acoustic logging• Broader benefits of an increased metering program

DEMAND MANAGEMENT

METERING AND DEMAND MANAGEMENT

As a minimum, the equivalent of our AMP6 water efficiency programme is already backed into our base plan. The question we have to answer is how much further should we go?

Water EfficiencyOption presented to increase water efficiency activity• Distribution of water efficiency products• Social Housing audits• Increased home audits

MeteringEvidence from other companies shows that increased levels of metering must play a role.• We cannot continue with the slow paced, reactive metering growth.• The questions are Pace and Volume

We do not currently have the legal powers to implement universal metering• Application to Secretary of State required

Whatever the pace, new meters located at the property boundary

All meters are as a minimum AMR, with a move towards “smarter” technology

Direct mail and door drop

Social and digital animations

OPTIONS TO REDUCE THE DEMAND FOR WATER

In 2015-16 we put around 1840Ml/d of water into supply.

Total Distribution Input

Metered household

Unmetered householdMeterednon-household

Unmeterednon-household

Other

Leakage

Water Efficiency – 55 Ml/d reduction • Audit programme delivers c10% reduction in HH demand, 20%

of customers engaged = 19 Ml/d reduction• Other water efficiency products, 18,000 HH per year, but

demand is declining = 12 Ml/d reduction• Education = 18Ml/d reduction, but this means reaching c 40%• New build efficiency, ambitious saving 10% reduction = 6 Ml/d

reduction

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Imp

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3%

13%

10%

20%

354 Ml/d

Universal Metering - 133 Ml/d reduction plus additional distribution leakage benefit?

• Potential for c13.5% reduction in Household (HH) consumption e.g. Southern Water UMP

Supply pipe leakage – 43 Ml/d reduction• Average 24-26 litres per prop per day• Ambitious target of 50% reduction

Distribution leakage – 123 Ml/d reduction• AR16 outturn 434 Ml/d, 2020 target 424Ml/d (based on 6%

reduction AMP6)• Continue a 6% per AMP reduction would give outturn of 311

Ml/d by 2045

How could we reduce DI by up to 20%?

METERING – WHAT HAVEWE LEARNED FROM OTHERS?

There are a range of savings quoted for the demand reduction impacts of metering 8-16.5%. Even using lower forecasts the potential impact for our demand management programme is significant.

Southern Water• Universal metering in AMP5• 40% - 92% meter penetration• 16.5% reported demand reduction• 10% reduction in peak demand

Thames Water• Ongoing smart meter rollout• Indicating potential 12% demand reduction• 11% of homes with continuous flow >5l/h• 5% homes with leaking loo (215 l/d ave)

Affinity Water• Ongoing meter rollout• Indicating potential 8-9% demand reduction• No compulsory switching

OPTIONS TO INCREASE METER COVERAGE

We think metering could play an important role in helping balance supply and demand. Continuing our existing free meter optant programme is not going to deliver the demand reduction we need.

We are exploring options to increase metering:• Continue current pace

- FROPT programme would only deliver 70% metering by 2045

• Enhanced FROPT programme- Encourage more optants

• Large scale installation of meters & persuaded optants- Dual billing, promotion etc

• Universal metering- Options around pace / targeting

Key to this will be customer engagement - What do customers think?• Upcoming customer workshops (Birmingham, Mansfield and Stoke)

Ultimately the pace and volume will need to align to the supply demand balance challenge, and customer attitudes to water metering.

NEW SOURCES OF SUPPLY

WE HAVE SCREENED OUT THE UNREALISTIC OPTIONS

Option formulation

Unconstrained options

Screened feasible options

Balanced plan

• Our unconstrained thinking has identified over 200 possible new supply and demand management options.

• During 2017 the screening process has helped us focus on those worthy of more detailed appraisal.

• Better understanding the feasible options gives us more confidence when we balance the plan.

• EA and stakeholder engagement through 2016-17 has informed our screening decisions and the scope of our ongoing engineering and environmental feasibility.

WE CURRENTLY HAVE 116 SCREENED FEASIBLE OPTIONS

Movement of water through new link mains, canals & rivers (compensate upstream and abstract downstream)

Import water from other water companies

Expansion / Rehabilitating / Recommissioning WTWks, BHs,

Reuse / Redirect effluent produced by our WTWks and STWks

Use underutilised licence

Expand existing Reservoirs

EA AND NRW HAVE INFORMED SCHEME OPTIONS

Engagement with the EA, NRW and stakeholders on options:

2016:• Shared screening criteria and finalised in Dec 2016• Consulted on SEA scope in Dec 2016• Met with EA area teams to review screening process and comments on the constrained list.

o Discussed potential show stoppers under WFD for 7 schemes o Highlighted need for Hof Requirement for 3 schemeso Highlighted abstraction licence issues with 4 schemes

2017• Jan 2017 issued constrained list and supporting assumptions to EA area teams for

comment.• EA area teams fed comments back through spring 2017. Comments and data used to

inform our ongoing WRMP options screening and scoping process.• As a result of EA area input, 6 schemes have now been rejected / screened out.• EA comments have further informed scope and design of 28 schemes (eg Licence

considerations, INNS, No Det Assessment, fish migration).

MORE USE OF RIVER SEVERN

Supporting our groundwater sources with additional river water.

Shelton, Staffs & Wolves

Options to optimise existingabstraction licences and deployusing:

• More use of existing treatment works capacity.

• Build a new treatment works.

DEPLOY RIVER WATER INTO NOTTINGHAMSHIRE

Reducing the pressure on Notts groundwater and using river water as an alternative

Options:

Potentially developing a new abstraction and treatment works on the River Trent.

Improve connections into the Derwent Valley Aqueduct and support from River Derwent sources.

MORE USE OF OUR EXISTING GRID SURFACE WATER SOURCES

Options include:

Expand our existing Dove and Derwent WTWs

Optimise use of Carsingtonreservoir and further utilise existing storage capacity.

Recommission existing redundant sources

Minor reservoir expansions

Technology to further optimise existing water treatment works processes and maximise deployable output potential.

SUMMARY AND DISCUSSION

SIGNPOSTINGThings to look out for in our draft WRMP:

• Preserving the current level of drought resilience.

• A balance of short, medium and long term measures to improve and protect the water environment from the effects of abstraction.

• Increased ambition on leakage, in line with Ofwat’s 15% industry challenge

• Exploring the role that increased metering could play in our region to reduce consumption

• A step change in activity to encourage efficient use of water.

• Potential new sources of abstraction to support Notts and Telford supply areas.

• Actively looking at trades in and out of area to take a more optimal approach nationally

dWRMP 2018

TABLE DISCUSSIONS

• What are your thoughts on what you’ve heard today?

• Have we found the right balance between environment, demand management and security of supply?

• What are the risks and opportunities that our draft plan could present?

• Do we share any challenges? Could there be shared solutions?

WRAP UP• Benefits and Concerns from the session

• Feedback Forms