Natural Resources Wales, Ofwat and the Environment Agency have written jointly to Dŵr Cymru Welsh Water to highlight significant concerns in the company’s water resources management plan (WRMP) Annual Review 2023/24 that require immediate action.
Natural Resources Wales, Ofwat and the Environment Agency have written jointly to Dŵr Cymru Welsh Water to highlight significant concerns in the company’s water resources management plan (WRMP) Annual Review 2023/24 that require immediate action.
According to the regulators, the annual review for 2023/24 is particularly important because of its position ahead of the start of AMP8 - the next five-year investment period which starts on 1st April 2025.
The regulators start by explaining that they have reviewed the company’s annual review and have highlighted their concerns that could affect security of supply and/or risk to the environment.
They go on to say Welsh Water:
- must improve its performance on reducing leakage as a priority. We are concerned that leakage has increased by 8.4 Ml/d (3.27%) since 2022/23 and is not on track to meet the WRMP24 starting point;
- must ensure it meets its PCC WRMP24 starting position. Whilst the company close to its WRMP24 position, it is 7.7 Ml/d off track from its WRMP19 forecast;
- needs to take urgent action to reduce demand for water. Dŵr Cymru has reported Distribution Input (DI) as 4.7% above its WRMP24 2023/24 forecast, driven mainly by failure to reduce leakage. Therefore, we expect immediate action to bring leakage down which in turn will bring distribution input down;
- achieve a Supply Demand Balance Index (SDBI) score of 100. Whilst we acknowledge that you did not have a water supply risk during the actual year (2023/24), we expect you to continue to increase your efforts to reduce the demand for water to maintain a secure water supply in all zones and achieve a score of 100 for 2024/25. You are also off track by 36.8 Ml/d from your WRMP19 supply demand balance forecast.
The regulators are concerned that current performance is making achieving the planned starting point for WRMP24 extremely difficult for Welsh Water, especially for leakage and total Distribution Input (DI) and that this could impact zonal supply demand balances in the 2025-2030 period.
“We note that in your final WRMP24 you have incorporated statements on the zonal supply demand balance risks around meeting the WRMP24 starting position. However, we lack assurance through the WRMP19 Annual Review process that anticipated progress for the start of WRMP24 will be achieved due to Dŵr Cymru’s ongoing poor performance which may present a risk to the security of supply for several resource zones in 2025-2030,” the letter says.
The regulators want Dŵr Cymru to provide them with evidence in writing by specific deadlines which shows that the utility has taken the required actions.
They also expect progress meetings between Dŵr Cymru, Natural Resources Wales, Ofwat and the Environment Agency to be set up as a 6 month mid-point towards the 2024-25 WRMP Annual Review submission.
"Yet to see sufficient and convincing evidence you are on track to meet even best estimate reduction"
This year, the joint regulators letter has now been published on the Ofwat website to drive transparency in the delivery of the WRMPs. The regulators have requested that Dŵr Cymru publishes its WRMP Annual Review data with a narrative and the regulators’ letter on the Welsh Water website to support this.
The letter concludes:
“Whilst we welcome your commitment to reduce total leakage by over 70 Ml/d (in excess of 25%) to 191.3 Ml/d by March 2025, (with a best estimate scenario of reducing by 40 Ml/d to 220 M/d as set out in your WRMP24) through delivery of a leakage recovery plan, we are yet to see sufficient and convincing evidence that you are on track to meet even your best estimate reduction.”
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