Dŵr Cymru Welsh Water

Dŵr Cymru Welsh Water Final Water Resources Management Plan Introduction & Non-technical Summary September 2012 Introduction, Summary, and Consultation Process One of our most important responsibilities, as provided for under the Water Industry Act 1991, is to ensure that we can always meet the reasonable water needs of our customers now and into the future. And, like all other water companies, we are required periodically to produce a Water Resources Management Plan which demonstrates how we plan to balance supply and demand over the following 25 years. Although companies had produced Water Resources Plans on a voluntary basis for several years previously, the amendments to the 1991 Act which were made by the Water Act 2003 introduced for the first time a statutory requirement for companies to produce Water Resources Management Plans (WRMPs). As part of our preparation for the 2009 regulatory price-setting process, we submitted a Draft Water Resources Management Plan to the Welsh Government in March 2008. Following a Direction from the Welsh Government in January 2009, the Plan was published for consultation on 15 January 2009. However, it did not complete the full statutory process as it was never formally approved by the Welsh Government, primarily due to fact that, in certain important respects, it was overtaken by events, notably the need to consider the impact of the Habitats Directive. In October 2011 we submitted a revised draft Water Resources Management Plan to Welsh Government, which considered the impacts of the Habitats Directive on water supply. This was subsequently published for public consultation. We published a Statement of Response to the Consultation in April 2012, addressing all the consultation responses we received on the revised draft Plan. Welsh Government wrote to us in July 2012, giving us Direction to amend the Plan to include the additional supporting evidence we had committed to providing in the Plan in the Statement of Response to the Consultation. At the beginning of August 2012 we provided an updated version of our revised draft Water Resources Management Plan to Welsh Government that included all the required amendments. Welsh Government gave us Direction to publish this version of the Plan as our Final Water Resources Management Plan on 20 August 2012. This document is therefore our Final Water Resources Management Plan for the period up to 2035, and sets out how we intend to achieve the required balance between supply and demand. Our aim is to do so efficiently so that water bills are no higher than they need to be and the impact on our environment is minimised. In order to develop the plan, we have projected the future demand for water from our customers, we have calculated how much will be available from current sources, and, where there is a shortfall, looked at all the ways of increasing supply and reducing demand so as to arrive at the best overall package of solutions. In general, we are currently in a relatively strong position on water resources. Wales has a comparatively wet climate and we abstract for public water supply just 3% of effective rainfall (which compares with much higher figures in parts of the South East of England, for example). Demand for water and the amount of water we abstract has fallen by a quarter over the last 15 years (as a result of halving of leakage and falling industrial demand for water) and we are forecasting more or less flat demand for water from our customers over the coming 25 years. This is based on Government and local authority projections of population and properties, and assumes no major upturn in the demand for water from heavy industry. All our 24 water resource zones currently have a surplus of supply over demand in both a normal and a Dry Year.1 1 A “Dry Year” is defined as a year that is characterised by low rainfall and unconstrained demand. The Dry Years that we have experienced and which are incorporated in our modelling include 1976, 1984, and, for some zones, 2003. Page | 1 Dŵr Cymru Welsh Water Final Water Resources Management Plan Introduction & Non-Technical Summary, September 2012 However, we do not expect this situation to persist. Much of this document is concerned with the significant changes in our water resources position that we are expecting in the coming years. We have to plan and cater for likely and possible changes in the years ahead, and for this Plan those are greater and more serious than they have been for the last two or more generations. Specifically, the Plan has been prepared so as to take account of two very significant influences: the results of the Environment Agency Wales‟ “Review of Consents” exercise which it has undertaken in the light of the European Habitats Directive. A significant feature of this process is that it entails the application of a “precautionary principle” under which potential adverse impact of abstraction is presumed unless evidence is available to the contrary, which typically is not the case; and an updated assessment of the possible impact of climate change on the water environment in Wales, as set out in the latest UK Climate Change Projections published in 2009 (“UKCP09”), which may both reduce the amount of water we have available to supply, and increase demand from our customers. Together, these two developments could very significantly reduce, or eliminate, our water resource surpluses in some zones, creating deficits that could require significant investment to address. For example, in our South East Wales Conjunctive Use System zone (“SEWCUS”) which covers much of South East Wales, the Review of Consents process alone will reduce our Deployable Output by nearly 20%, the equivalent of what we need to meet the needs of consumers in the whole of Cardiff. More generally, the resultant tightening of our water resource position means that surpluses that we currently have cannot be regarded as being available to support long term economic development. For example, on the basis of the projections set out in this plan, new resources would probably be required to facilitate any further industrial development in Milford Haven. The one key message we want to get across from the development of this Plan and the consultation that has taken place, is that Wales does not have an abundance of water for public water supply and that we all need to value our water resources much more than in the past. The feedback we received on this Plan through the consultation process not only has assisted us in shaping the final Plan, but it will also influence our approach to the next draft Water Resource Management Plan, due in 2013. Structure of Final Plan This document is structured as follows. Chapter 1 sets out the context within which the final plan has been prepared, and the processes that have been applied. Chapter 2 provides a summary of the key features of our region and the water supply industry in general that are particularly relevant for water resources planning. Chapter 3 then explains the primary measures of water supply capacity, namely “deployable output” and “water available for use” (including the role of “outage”), and Chapter 4 describes the main elements of the demand for water in our region together with the basis on which we have forecast demand out to 2035. Chapter 4 also summarises our approach to the management of leakage (leakage being one component of the “demand” for water) and the promotion of water efficiency, both of which will continue to play important roles in our water supply strategy over the Plan period. Chapter 5 then explains “Target Headroom”, the buffer that we build into our projections to allow for error and uncertainty for the purposes of determining when there is deemed to be a supply demand “deficit”. Page | 2 Dŵr Cymru Welsh Water Final Water Resources Management Plan Introduction & Non-Technical Summary, September 2012 Chapters 6 and 7 describe two exceptional influences on our water resources position over the Plan period. These are respectively the notification we have had from the Environment Agency that it has reviewed some of our licences and wants us to make significant “sustainability reductions” in the light of the Habitats Directive (reductions that we are assuming in this plan will come into effect in 2020), and the latest projections for climate change. Chapter 8 brings together the projections of demand, Target Headroom and Deployable Output to present the „supply demand balance‟ for each of our 24 water resource zones for the period to 2035. We show that, but for the effects of the Habitats Directive related review of our consents and climate change, we would be projecting no supply demand deficits over the next 25 years, but when they are taken into account deficits appear in some zones during the plan period. Chapter 9 then sets out how we have approached the evaluation of options for closing these deficits. These options range from increasing the storage available in our reservoirs to encouraging our customers to use water more efficiently. It shows how we have evaluated the options to arrive at a preferred list of viable solutions to the projected deficits. It sets out our initial estimates of the likely financial and carbon cost of progressing each of these options and the possible impact on customer bills. Finally, Chapter 10 summarises the environmental appraisals we have commissioned in connection with, and to support this Plan. A glossary of terms is included with the supporting Annexes. Building the Uncertainty Surrounding Climate Change into this Plan The biggest challenge we faced in preparing this plan was the question of how we should incorporate the latest climate change scenarios, “UKCP09”, into our projections, and in particular the uncertainty around the central projections.

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