Strategic regional water resource solutions: Preliminary feasibility assessment Gate-1 submission for Grand Union Canal Transfer SRO Date: 05 July 2021 Template version: draft 10, 9 February 2021 ST Classification: OFFICIAL PERSONAL Attention: Mr Paul Hickey Managing Director Regulators’ Alliance for Progressing Infrastructure Development Ofwat City Centre Tower 7 Hill Street Birmingham B5 4UA 01 July 2021 Grand Union Canal (GUC) SRO Gate 1 Submission Dear Paul Affinity Water, Severn Trent Water and the Canal & River Trust are pleased to submit our gate-1 report for the GUC Transfer Strategic Resources Option (SRO). The report outlines how we have developed this SRO since its approval in the PR19 Final Determination, and the key steps we intend to take in gate-2. Through this SRO and our proposals for the Minworth SRO, we intend to transfer water from Minworth wastewater treatment works to the Grand Union Canal and into the Affinity Water supply area, supporting customers in the South East of England with up to 100Ml/d of water in times of need. We are proposing to upgrade the Grand Union Canal for the transfer, and to abstract, store and treat the water downstream before it enters Affinity Water’s supply area. Utilising existing canal infrastructure will allow us to provide value for money and to enhance the recreational value of the canal for local people. Our cross-industry team, including personnel from Affinity Water, Severn Trent Water and the Canal & River Trust, has been delighted to make this contribution to strengthening the UK’s water infrastructure and creating a legacy of resilient water resources for future generations. The Boards of Affinity Water and Severn Trent Water confirm their support for this SRO with the supporting board statement attached. We have also included a separate statement from the Canal & River Trust. We have aimed to create a gate-1 report that meets RAPID’s requirements at this stage in the process. If there are elements you would like to discuss with the team, please send your queries to [email protected], [email protected] and [email protected]; we would welcome the opportunity to provide further clarity where needed. We have received a letter of support from the Environment Agency, which can be provided on request. We look forward to receiving your feedback, and to developing this SRO into gate-2. Yours sincerely Ian Tyler Liv Garfield Chair Affinity Water Chief Executive Severn Trent ST Classification: OFFICIAL COMMERCIAL Grand Union Canal – Gate 1 preliminary feasibility assessment Grand Union Canal Strategic Resource Option Joint Board Assurance Statement This joint board assurance statement is provided by the Grand Union Canal partners, Severn Trent Water and Affinity Water. The two companies, together with the Canal & River Trust, have worked effectively and collaboratively on the Gate1 solution development. In support of this statement the two companies have undertaken both joint and individual company assurance and due diligence. Each of the boards are satisfied that the data and approaches used to develop the concept design and decision-making information included within the Gate 1 submission: • meets the requirements set out in Ofwat’s Final Determination, and subsequent additional feedback from Ofwat; • have been subject to sufficient processes and internal systems of control to ensure that the information on design, costs and benefits contained in this submission are reliable; • have been appropriately assured to give our stakeholders, including customers, trust and confidence in this Gate 1 submission; • and have appropriately considered the feedback and opinion of independent external assurance partners. The Severn Trent Water Board confirm that they understand their role in this submission as suppliers of the water. Affinity Water confirms that they understand their role in this submission as a recipient of the water. The Boards all support the recommendation for the solution progression made in this submission and are satisfied that the: • progress on the solution, to date, is commensurate with the Final Determination timeline of being ‘construction ready’ in AMP8; • scope, detail and quality of the preliminary activities are that which would be expected of a large infrastructure scheme of this nature at this stage; • expenditure incurred in generating the Gate 1 submission is efficient and relevant to the development of the submission. On Behalf of: Name and position: Date: Signature: Severn Trent Water Liv Garfield, CEO 01 July 2021 Affinity Water Ian Tyler, Company Chair 30 June 2021 1 Gate 1 preliminary feasibility assessment Grand Union Canal Strategic Resource Option Canal & River Trust – Statement of Support This statement of support is provided by the Canal & River Trust (the Trust) who have been working in partnership on the development of the Grand Union Canal Strategic Resource Option. The Trust, together with Affinity Water and Severn Trent Water have worked effectively and collaboratively on the Gate1 solution feasibility assessment. The Trust can play a significant role supporting the water sector as it strives for resilience and affordability in delivering public water supply. Our waterway infrastructure already exists and with investment from the sector could unlock resilient and cost-effective water transfer schemes across England and Wales. The Trust confirm that they understand their role in this submission as the conveyor of the source water from Severn Trent Water, transferring it to Affinity Water, for abstraction as the recipient. The Trust will continue to support the development of this Strategic Resource Option provided it remains cost effective for all parties involved and the Trust’s statutory obligations and responsibilities remain unaffected. The Trust supports the recommendation for the solution progression made in this submission and are satisfied that the: scope, detail and quality of the preliminary activities are that which would be expected of a large infrastructure scheme of this nature at this stage; development of the Grand Union Canal as a strategic transfer route, is a sensible and efficient use of existing infrastructure. On Behalf of: Name and position: Date: Signature: Stuart Mills, Chief Canal & River Trust 25 June 2021 Investment Officer 1 Contents 1. Executive Summary 1 2. Solution Description 4 3. Outline Project Plan 8 4. Technical information 12 5. Environmental and Drinking Water Quality Considerations 15 6. Initial Outline of Procurement and Operation Strategy 20 7. Planning Considerations 23 8. Stakeholder Engagement 25 9. Key Risks and Mitigation Measures 26 10. Option Cost/Benefits Comparison 30 11. Impacts on Current Plan 32 12. Board Statement and Assurance 33 13. Solution or Partner Changes 34 14. Efficient Spend of Gate Allowance 34 15. Proposed Gate-2 Activities 37 16. Conclusions and Recommendations 40 Page i Strategic Solution Gate-1: GUC Transfer SRO – Preliminary Feasibility Assessment Glossary Glossary Gate-1 / Gate-2 Strategic regional water resource solutions: Preliminary feasibility assessment – Gate one submission / Gate two submission GUC SRO Grand Union Canal Transfer Strategic Resource Option Minworth SRO Minworth Strategic Resource Option Ofwat Water Services Regulation Authority RAPID Regulator’s Alliance for Progressing Infrastructure Development The Trust The Canal & River Trust WRMP19 Water Resources Management Plan 2019 Water UK UK Water industry trade body Abbreviations ACWG All Company Working Group AD Associated Development ADO / DO Average Deployable Output / Deployable Output AfW Affinity Water AMP8 Asset Management Period 8 (Period between 2025/26 to 2029/30) BAU Business As Usual BNG Biodiversity Net Gain CAP Competitively Appointed Provider CAPEX Capital Expenditure DBFOM Design Build Finance Operate and Maintain DCO Development Consent Order DPC Direct Procurement for Customers DWI Drinking Water Inspectorate DWSP Drinking Water Safety Plan EA Environment Agency EQS Environmental Quality Standards FD Final Determination GUC Grand Union Canal HRA Habitat Regulations Assessment INNS Invasive Non-Native Species JV Joint Venture Ml/d Megalitres Per Day NAU National Appraisal Unit (for EA) NPS National Policy Statement for Water Resources Infrastructure NSIP Nationally Significant Infrastructure Project OB Optimism Bias OPEX Operational Expenditure PFOS Perfluorooctane sulfonate PMB Programme Management Board RAID Risks, Assumptions, Issues and Dependencies RSS Regional System Simulation SEA Strategic Environmental Assessment SLR South Lincs Reservoir SRO SRO Strategic Resource Option SSSI Site of Special Scientific Interest STT Severn to Thames Transfer SRO STW Severn Trent Water TCPA Town and Country Planning Act TOTEX Total Expenditure TWUL Thames Water Utilities Limited WFD Water Framework Directive WINEP Water Industry National Environment Programme WRMP Water Resources Management Plan WRSE Water Resources South East WRW Water Resources West WwTW Wastewater Treatment Works Page ii Strategic Solution Gate-1: GUC Transfer SRO – Preliminary Feasibility Assessment 1. Executive Summary Opening Statement 1.1 The Grand Union Canal (GUC) Transfer Strategic Resource Option (SRO) is a viable solution that transfers surplus water from Severn Trent Water’s (STW’s) supply area to areas of water deficit in Affinity Water’s (AfW’s) supply area. A new pipeline and existing canal will be utilised to convey treated wastewater from Minworth SRO to the GUC SRO. Water