Green Recovery spend gets the green light

Ofwat has given final approval to a slightly trimmed water company Green Recovery package.

Five firms will invest £793m, down from the draft £862m, in genuinely new schemes to help the country build back better and greener: Severn Trent, South West Water, United Utilities, Thames Water and South Staffs Water. Ofwat explained: “In most areas, companies accepted, or did not challenge, our draft decisions. We therefore largely retain our draft decisions, having made some adjustments taking into account additional evidence we have received since May. The slightly lower overall allowance mostly reflects Thames Water’s reduced smart water metering proposal, which the company considers will maximise benefits for customers and the environment in the Thames Valley. Elsewhere, we’ve increased our allowances, such as for South Staffs Water’s water quality improvement scheme and United Utilities’ proposal to deliver nature-based solutions through partnership working.”

In addition, the £1.9bn earmarked in the May draft, that will be sourced by bringing forward statutory environment schemes earmarked for AMP8, was locked in. Twelve companies are involved in this: the nine English water and sewerage companies plus Affinity Water, Bristol Water and South Staffs.

Overall, the Green Recovery package results in an additional £2.7bn of environmental investment on top of the PR19 spend, down from the draft proposal of £2.8bn.

Ofwat is also consulting until 12 August on new in-period Outcome Delivery Incentives for Severn Trent and South Staffs related to their Green Recovery investments.