This report describes our plan to maintain a secure balance between water supplies and demands in the region served by Water Resources Management Plan Main Report, February 2010 Water Resources Management Plan 1 Executive summary 2 2 Introduction 12 3 Regional overview of water resources 16 4 Methodology and models 42 5 Details of the water resources zones 64 6 Our Water Resources Management Plan 116 7 Abbreviations, acronyms and terms 126 Water Resources Management Plan Executive summary 2 Water Resources Management Plan Executive summary 1 Executive summary 1.1 The preparation of a Water Resources Management Plan (WRMP) is a new statutory process. It allowed for consultation on the Draft WRMP between May and July 2008, the publication of our Statement of Response to representations received in February 2009, the submission of a Supplementary Statement of Response with additional information in September 2009 and the publication of the WRMP once we had been directed to do so by Defra. Defra was advised by the Environment Agency throughout the process. We have worked with the Environment Agency’s water resource planners in the preparation of the WRMP. In preparing the WRMP we have taken the representations received in response to the consultation into account alongside the effects and consequences of changes that have arisen during the development of the Plan. The WRMP has been improved to provide further information required by Defra. 1.2 Our WRMP has been updated and improved through the consultation process and by advice provided by the Environment Agency. It has been prepared to comply with the Environment Agency’s guideline and we have worked closely with its regional office throughout. The resulting Plan addresses the key issues of growth, climate change and sustainability reductions. 1.3 In developing our Plan we have used industry standard methodologies for determining the availability of supplies; forecasting the demand for water; establishing the allowance needed for uncertainties and using these to calculate the sustainable options for maintaining a secure balance between supplies and demands. Although the resulting Plan optimises the use of demand management, additional water resources will be required to maintain the security of water supplies through the planning period. 1.4 The Main Report is accompanied by a Summary Report for readers wanting an overview of the WRMP and the strategy that it describes, without the detail of the analytical tools given in Chapter 4 of this report. The Summary Report provides a regional overview of our strategy for the management of water resources, where Chapter 5 of this report provides a more detailed description of the supply-demand balance in each of the 11 Water Resource Zones that make up our supply area in the Anglian region plus the Hartlepool area. 1.5 The challenges we face as a company were detailed in our Strategic Direction Statement (SDS) published in December 2007. In particular the impact of housing growth, environmental pressures, climate change and customer expectations have a strong bearing on this Plan and the Final Business Plan submitted to Ofwat in April 2009. 1.6 Our strategic priorities are to increase the resilience of our water and wastewater services, secure and conserve water resources, anticipate and invest for growth in our region and mitigate and adapt to climate change impacts. 1.7 Figure 1.1, taken from our SDS, shows the linkages between the challenges we face, our key priorities and our company strategy for the next 25 years. Water Resources Management Plan Main Report, February 2010 3 Figure 1.1 Strategic Direction 1.8 The WRMP is required to address the challenges to water supplies from growth, climate change and environmental legislation. We operate in one of the fastest growing regions in the country, we operate in the driest region of the country and therefore have vulnerability to drought, and we have more water-dependent, European-designated conservation sites in our supply area than any other water company. 1.9 We have reviewed and updated the methodologies and processes that we used to develop our Water Resources Plans produced in 1999 and 2004. We concluded that these provide a sound basis for the analysis of the supply-demand balance and the derivation of the assumptions that need to be made when looking forward over 25 years from 2010 to 2035. In particular we have carried out detailed analysis of the effect of climate change on water resources taking into account the guidance provided by the Environment Agency. Our analysis processed median, best and worst case scenarios from recognised international climate change models through hydrological models. This showed that the impact of climate change on supplies and demands during the 25 year planning period is not a significant driver for our Plan. However climate change remains the biggest single risk to water supplies in the longer term. 1.10 Our analysis shows that, although we have historically developed sufficient water resources to provide supplies to meet the demand for water today, we will need to invest to maintain secure supplies in the future. The need for investment was detailed in our Business Plan submissions to Ofwat in August 2008 and April 2009 as used to set charges for water services for the period 2010 to 2015. Figures 1.2. and 1.3 show at a regional level the increase in forecast demand plus target headroom over the planning period and the available deployable outputs from our sourceworks. Both average day sourceworks output (ADSO) and the maximum sourceworks output (MAXSO) increase in 2010 following the commissioning of the extension to our Rutland Water treatment works and decline marginally to 2036-37, 4 Water Resources Management Plan Executive summary reflecting the impact of climate change. The graphs show how deficits develop during the planning period that need to be addressed through our WRMP. The graphs indicate that we currently have a surplus of supplies over demand plus headroom at a regional level. However, our analysis shows that this is not evenly distributed and that local investment is needed, in particular to address local growth. Figure 1.2 Baseline Average Forecast Figure 1.3 Baseline Peak Forecast Water Resources Management Plan Main Report, February 2010 5 1.11 An important factor in defining the potential deficit in the availability of water supplies to meet forecast demand is the need for a planning allowance, or target headroom, to address the risks and uncertainties in our calculation of the supply-demand balance. Using the industry standard methodology (1 ) we have determined that we require a margin of 5 per cent to maintain the security of supplies in the current year that increases to 15 per cent during the planning period. The extent to which headroom has been used to address an imbalance of water available for use against our demand forecast is reviewed and reset every five years for a new WRMP. 1.12 The main drivers for headroom are the uncertainties over population growth and the level of water consumption by domestic customers. Our demand forecast assumes that the population served will increase by up to 20 per cent or some 800,000 people between 2010 and 2035, having taken into account the current economic downturn and the expected recovery from it. We have also assumed a decline in measured water consumption to 130 l/h/d by 2030. This recognises Government expectations as outlined in its recent strategy ‘Future Water’ (2 ). We plan to continue to promote water efficiency initiatives, but equally water savings are achieved through customer behaviour and effective regulation, particularly for the construction of new water-efficient homes. 1.13 In developing the WRMP we have followed the ‘twin-track approach’ of using demand management alongside water resource development. We have already successfully achieved a high level of meter penetration, a low level of leakage from our water mains and our customers’ current level of water consumption compares favourably with the rest of the country. Our demand forecast assumes that water consumption by our metered customers will decline as a result of the planned continued promotion of water efficiency and that leakage from our water mains will be held at around 210 Ml/d. 1.14 We have included demand management proposals in our supply-demand balance analysis through further targeted leakage control, enhanced metering, pressure reduction schemes, the installation of water-efficiency devices and water audits. These options are normally selected in preference to larger resource development options and we plan for a significant increase in investment in demand management in our business plan for 2010-15. 1.15 We have allowed for an increase in the number of customers paying water charges by a meter from the current level of 65 per cent to over 90 per cent by 2035 in our baseline forecast. The supply-demand balance analysis includes the option for targeted enhanced metering to address local supply deficits. This follows the model of our recent project in Ipswich where we installed meters at all homes where installation is practical. Customers can choose to pay measured water charges by opting to switch and will pay measured charges by moving to an existing metered home. Targeted enhanced metering will accelerate the water savings we have included in our baseline forecast, but does not increase them. 1.16 In developing the WRMP we considered the use of compulsory metering as required following the designation by Defra of the Anglian region as an area of serious water stress, using the methodology developed by the Environment Agency. In reviewing our metering policy we took a range of issues into account, including its success to date, the cost and benefits of blanket compulsory metering compared with targeted enhanced metering and issues of affordability and our relationship with our customers.