10 Jul 2018

In the National Infrastructure Assessment published today, one of the key priority areas highlighted by the National Infrastructure Commission (NIC) was water. In April 2018 the NIC highlighted the risk of serious water shortages in the future and the substantial costs of relying on emergency measures in the event of severe drought. To meet this risk NIC made three key proposals:

  • That supply should be increased through a national water network and additional supply infrastructure;
  • That leakage should be halved by 2050 via the five year objectives imposed on water companies by Ofwat; and
  • That customer demand should be reduced by extending compulsory metering and the roll-out of smart metering.

Reducing leakage is a longstanding aim, but in recent years progress has stalled and achieving a further 50% reduction will require substantial investment by water companies.

A reduction in customer demand should be possible to achieve, given that households in England currently use more water than those in many European countries, but experience from the energy market shows that the roll-out of measures targeted at achieving savings can prove challenging both in terms of adoption by consumers and the race to invest in the right solutions.  

The most interesting proposal is for the development of a national water network. This would require large scale investment and possibly the establishment of an independent national framework. However, it would enable the transfer of water from areas of surplus to those of greater demand and would optimise other supply infrastructure. It would also better enable the wholesale market to be opened up to competition in the future, if desired.