Sensitivity testing the preferred plan

Transcription

1 E Sensitivity testing the preferred plan Sensitivity analysis was used to test the strategy in our final WRMP and to better understand the assumptions behind its creation. The purpose of our analysis was to determine the sensitivity of our investment modelling to uncertainty in the key input parameters. The benefits of carrying out this sensitivity analysis were: To help us determine the robustness of the plan - a plan can be considered robust if changes to input parameters do not significantly alter the proposed solution. To identify the critical input parameters (those that have large effects on the plan) this may trigger a review of the original parameter specification or how these parameters are treated within the model To improve communication having a range of outputs and increased understanding of the system removes the black box nature of optimisation To identify modelling errors sensitivity analysis sometimes throws up strange results that cause the analyst to reconsider modelling assumptions E. Our approach to sensitivity testing the preferred plan Our approach was informed by Ofwat s challenges to water companies asset management planning processes, as well as the requirements of the EA s WRMP Guidelines. Our sensitivity analysis used a Monte Carlo simulation approach to assess the uncertainties around the investment modelling decisions. Appendix D5 explains how our Water Infrastructure Supply / Demand (WISDM) investment model optimises investment to achieve service delivery targets using a range of supply-side and demand-side investment choices. We tested the results of the WISDM investment modelling in the following ways: Prioritisation and selection of those parameters with the most sensitive relationships; Analysis of the uncertainty distribution of coefficients; Monte Carlo analysis on the no investment scenario, which allowed us to understand the impact of uncertainty in the baseline scenario and select which parameters are appropriate for modelling in a re-optimisation Monte Carlo analysis on the preferred investment solution, which allowed us to understand whether the 25 year plan is robust Severn Trent Water: Final Water Resources Management Plan 204

2 The Monte Carlo analysis was supplemented by two re-optimisation runs based on a best and worst case scenario with the most sensitive parameters fixed at the extremes of the uncertainty distribution (e.g. minimum and maximum or 5%ile and 95%ile values). The first stage of the sensitivity assessment was to derive the key model input parameters that were to be tested. Figure E. illustrates that there are a wide number of parameter inputs to the WISDM model, each of which could potentially be tested for sensitivity. Figure E.: Illustration of the parameter inputs to the investment optimisation modelling The parameter selection for sensitivity testing was based on expert opinion on which were likely to be most material to the investment decisions, and was designed to test elements of all of the submodels used in the WISDM investment modelling. The list of parameters chosen for sensitivity testing and why is summarised in table E. below. 2 Severn Trent Water: Final Water Resources Management Plan 204

3 Table E.: Selection of parameters for Monte Carlo sensitivity testing We also ensured that when testing the sensitivity of the no-investment scenario and the preferred plan, we used the same uncertainty distributions around the parameter inputs. Table E.2 sets out the uncertainty distributions used for testing the impacts of these parameters on the optimised model solution. Table E.2: Uncertainty distributions used for sensitivity testing 3 Severn Trent Water: Final Water Resources Management Plan 204

4 The sensitivity tests were used to perturb the chosen coefficients both alone and in combination with other coefficients to understand how the interactions between different parameters could affect the outcome of the WISDM model. A summary of which parameters were tested individually and which were in combination is shown in table E.3. The test of most relevance to the final WRMP was that labelled MC09 Scheme effectiveness, NRR and ALC. In this test, we used the Monte Carlo analysis to assess the sensitivity of the investment plan to the combined uncertainties around our leakage interventions and the new supply schemes. Table E.4: Matrix of parameters tested Background leakage ALC Leakage Coefficients C &D NRR m Mains Repair Age Coefficients m Scheme effectiveness (MLD) and costs Costs (various) Test Code Test description MC0 NRR AC MC02 NRR CI MC03 Age-burst relationship AC MC04 Age-burst relationship CI Pre 940 MC05 Age-burst relationship CI Post 940 MC06 Age-burst and NRR MC07 ALC lower policy minimum MC08 ALC effectiveness MC09 Scheme effectiveness, NRR and ALC ** ** MC0 Other costs MC MCoW WR0&02 WISDM Reoptimisation * * C&D coefficients corresponding to the background leakage set for the re-optimisation ** Scheme effectiveness Monte-Carlo analysis run using the 25x model rather than the 5x5 model MCoW No investment Monte-Carlo Fixed solution Monte-Carlo The output from the sensitivity testing of the key parameters was then used to re-optimise the investment plan using best-case and worst-case scenarios from the Monte Carlo modelling. This gave us confidence of the envelope of costs and benefits associated with our preferred plan. 4 Severn Trent Water: Final Water Resources Management Plan 204

5 E.2 Sensitivity results The sensitivity analysis demonstrated that our strategy was robust to the uncertainties around the key parameters in our investment planning. Table E.5 summarises the sensitivity results from the series of parameter tests that are listed in table E.4. Overall, across the six sensitivity scenarios tested, the target headroom constraints were met in 82% of cases over the 25 year period. Where the target headroom constraint is missed, Table E.5 shows the first year in which it was broken. Table E.5: Results of the target headroom sensitivity tests NRR uncertainty Mains Repairs uncertainty Target headroom achieved? ALC Background Leakage uncertainty ALC uncertainty New Schemes / NRR / ALC combined uncertainty Cost uncertainty STW F&S 2040 N Staffs Notts Shelton Strat.Grid Wolves B Castle Kinsall 2039 L&L Mardy Newark Rutland Ruyton Stafford W&W The summary shows that our proposed supply / demand investment measures give us high confidence of achieving the required target headroom during AMP6 and AMP7 in all water resource zones. In the longer term, the uncertainties around the most sensitive parameters show there is a risk that some of our service targets may not be met. Of most interest to the final WRMP was the results of the test which combined the uncertainties around the leakage and supply side measures. As shown in table E.5, in AMP8 and beyond there are some zones where some of the 000 Monte Carlo simulation runs showed there is a risk of not being able to meet target headroom. The results of the sensitivity analysis showed us that the most significant uncertainty affecting our least cost plan is around the effectiveness of our future leakage reduction measures. For example, figure E.2 illustrates the envelope of future leakage performance arising from the preferred plan. The figure shows the leakage performance that would arise based on our estimates of uncertainty 5 Severn Trent Water: Final Water Resources Management Plan 204

6 around the future natural rate of rise in leakage combined with the effectiveness of our mains renewal programme and active leakage control measures. The blue line shows the preferred plan results over the 25 year plan The red line shows the mean of the 000 Monte-Carlo simulations The grey area shows the total range to the max and min Monte-Carlo simulations Figure E.2: Strategic Grid zone preferred planning scenario total leakage sensitivity This sensitivity of future leakage performance then carried through to the uncertainty around the projected overall supply / demand position. Figure E.3 illustrates the effect of the uncertainty around leakage performance on the company wide available headroom. 6 Severn Trent Water: Final Water Resources Management Plan 204

7 Figure E.3: Strategic Grid final planning scenario available headroom sensitivity This illustrates again that we had high confidence that our strategy would achieve the target headroom requirements in AMP6 and 7, and that there is increasing uncertainty in the longer term. Because we have high confidence around our plan in the medium term, we believe that these longer term risks are manageable and that we can adapt our plans if necessary as these uncertainties reduce over time. 7 Severn Trent Water: Final Water Resources Management Plan 204

8 E2 Alternative supply options Chapter 3 explains the new supply schemes that form part of our proposed strategy for balancing supply and demand for water over the next 25 years. Appendix D explains the process we have used to identify potential new supply options, and how we have produced a shortlist of those that are most feasible for future development. The scale and timing of the schemes being promoted through our WRMP has been derived using our WILCO investment optimisation model. As such, we believe that the proposed investment options provide an affordable and sustainable long term water resources investment plan. We recognise, however, that there are risks and uncertainties around the successful delivery of our preferred scheme options. In Appendix E we have described how the uncertainties around the delivery costs and the deployable output benefits of our preferred plan could impact on our future supply / demand balance. In addition to the uncertainties around the costs and benefits of the new supply schemes, we have also considered the delivery risks around these proposed options. For example, despite our high level feasibility screening and outline engineering assessments, we may find that the proposed schemes are more complex than originally envisaged or cannot be delivered in the required timeframe. To address these risks, we have identified a number of alternative schemes to the preferred programme to provide contingency in the event that the preferred schemes in the final WRMP are either: Technically infeasible; Undeliverable on environmental/planning grounds; Projected to deliver a lower deployable output benefit than assumed; and/or Significantly less cost-beneficial than originally assumed There are six alternative plan schemes (five in the Strategic Grid WRZ and one in the Nottinghamshire WRZ) outlined below that could provide approximately 30Ml/d replacement supplyside benefit if needed. These alternative schemes have been highlighted on the basis that they are the next highest AISC ranking after the preferred plan options and have also been assessed through the SEA process. In the event that any of the preferred scheme options cannot be delivered, we would look to these options as the next alternative. Scheme 2- Central Birmingham BH to potable supply There are four borehole sites around central Birmingham that are set-up to provide river augmentation andenable additional abstraction from the Trent near Derby during severe droughts. This scheme concept involves adding the facility to deploy them into public supply in the Birmingham supply zone when raw water availability into Frankley treatment works is restricted. This would be principally during dry summers when Elan storage was low. The capital works required to deliver the notional scheme would likely involve construction of a 23.5Ml/d-capacity raw water pipeline from the sites to Frankley treatment works in south-west 8 Severn Trent Water: Final Water Resources Management Plan 204

9 Birmingham, where the water would be treated via existing infrastructure and then deployed into supply with controlled blending to maintain stable quality. The borehole sites licences will need to be varied to allow for routine potable supply use. The requirement for modification to the group licence quantity would depend on future resource availability in the aquifer (currently under review by the Environment Agency). In any case, the licence variation would need to include an assessment and mitigation of any potential risks to the Edgbaston Pools SSSI from the cumulative abstraction from the Birmingham aquifer. Scheme 40 - Monksdale Borehole Recommissioning Monksdale Borehole is located in the Peak District to the east of Buxton. It has been out of service for several years due to inadequate treatment facilities. The scheme would involve upgrades of pumping equipment and the treatment works on the site to deliver up to 2Ml/d under the current licence. Scheme 6B River Trent to Melbourne Melbourne treatment works, south of Derby, is fed from the River Dove and is subject to abstraction licence restrictions on the Dove intake during dry summers. The scheme involves construction of a new raw 20Ml/d capacity intake on the Trent and a short pipeline to feed water to the pumping station that currently transfers water to Melbourne. The scheme would be supported by upstream releases, e.g. from the Birmingham Groundwater Scheme, during drought summers and would therefore be mutually exclusive with any other WRMP options that use the same resource. Scheme 87 - River Bourne Augmentation (Coleshill) The River Bourne is one of the rivers used to provide water to Shustoke Reservoirs, which in turn feed Whitacre treatment works to the east of Birmingham. The river is relatively small and cannot sustain high abstraction rates during dry weather. The concept behind the scheme is to augment the flow in the river by piping treated waste water from Coleshill works to a point further up the catchment. This would increase the amount abstractable under the current licence by approximately 5Ml/d, delivering both an environmental and deployable output gain. Scheme 26- Wellesbourne Conjunctive Use Severn Trent own two borehole sites near Stratford-upon-Avon that cannot achieve average or peak licence due to pump constraints. The notional solution for the scheme would involve upgrading the pumps and power supply to one of the groundwater sites that feeds Wellesbourne treatment works. This will deliver a small DO gain of just over Ml/d, subject to their being some element of conjunctive use with river sources on the Strategic Grid, principally Strensham, fed by the River Severn. Scheme 3: Ogston to Mansfield Pipeline Enhancement (Notts. WRZ) There are hydraulic limitations on the amount of water that can be transferred from the Strategic Grid to customers in the neighbouring Nottinghamshire water resource zone. This scheme would eliminate one of those constraints by upgrading a booster station that feeds water from the Ogston treatment works into the Mansfield area. This would re-zone additional demand onto the Strategic 9 Severn Trent Water: Final Water Resources Management Plan 204

10 Grid and therefore provide a 5Ml/d additional benefit to the Nottinghamshire WRZ, subject to delivery of a new supporting resource scheme in the Strategic Grid zone. 0 Severn Trent Water: Final Water Resources Management Plan 204

11 Ml/d E3 Alternative planning scenarios In addition to the sensitivity testing of our preferred plan, we also tested the impacts on our plan of assuming plausible, alternative supply / demand scenarios. The benefits of doing this were: To understand how uncertainties around future external planning scenarios such as climate / weather, emerging legislation and regulation, resource availability and so on may affect the least cost plan To enable us to predict potential programme variation or to define a confidence band for programme out-turn To support the delivery of innovative solutions as the impact of taking on higher risk outcomes would be understood at the outset and agreed with customers and stakeholders. Chapter 3 explains the key components of our long term Water Resources Management Plan. The bulk of our future investment to maintain the supply / demand balance is required in the Strategic Grid and Nottinghamshire zones. Figures E3. and E3.2 below illustrate the sequence and timing of the leakage reduction, demand management and supply enhancement schemes that we are proposing in those two zones. Figure E3.: The Strategic Grid preferred supply / demand investment plan Grid Supply Demand Balance Water Efficiency Pressure Mains Renewal Scheme 78 Whitacre ASR Phase 2 Effect Resource Scheme 22A Draycote expansion by 6 Per cent Effect Resource Scheme 30 Lower Worfe Augmentation Effect Resource ALC Other Leakage Scheme 3 Trimpley-Worcs. Groundwater Conjunctive Use Effect Resource Scheme 96 Shropshire GW River augmentation Effect Resource Scheme 29 Bromsgrove Groundwater Licence Transfer Effect Resource SDB Gap Severn Trent Water: Final Water Resources Management Plan 204

12 Ml/d Figure E3.2: The Notts zone preferred supply / demand investment plan Nottingham Supply Demand Balance Water Efficiency ALC Pressure Other Leakage Mains Renewal Scheme 3 Ogston to Mansfield Pipeline Enhancement Effect (Strategic Grid) Resource SDB Gap To build confidence around our preferred plan, three alternative future scenarios were tested using the WISDM model to understand whether they would trigger radically different investment plans. These alternative scenarios principally reflected the uncertainty around the scale and timing of the Habitats Directive led changes at Elan Valley reservoirs, and the uncertainty around the long term impacts of climate change. The three alternative scenarios we tested were: Assume no change to current Elan Valley licence; Assume a higher impact of climate change uncertainty than in the preferred plan; Assume a more extensive requirement to reduce abstraction at sites potentially causing environmental damage. We chose these scenarios because they represented the most significant planning uncertainties that were not already catered for in our headroom uncertainty analysis. A description of these scenarios is given below, along with an explanation of how they would impact on our preferred investment plan. The results of these alternative investment scenarios are indicative only as they have not been subject to the same level of scrutiny and sensitivity testing as the preferred scenario. 2 Severn Trent Water: Final Water Resources Management Plan 204

13 Ml/d E3. Assume no changes to current Elan Valley licence In Chapter A we explain that our baseline deployable output projections include the impacts of any reduced or revoked abstraction licences at sites where we are likely to be required to change our abstractions. Our baseline projections also include the impacts of changes to Dwr Cymru Welsh Water s (DCWW s) licence at Elan Valley Reservoir, as required under the Habitats Directive. Our baseline plan shows that it is the changes to the Elan Valley Reservoir operation that will have the single biggest impact on deployable output in our Strategic Grid zone. Our current assessment is that up to 75Ml/d of deployable output will be lost in the Strategic Grid zone due to the changes to the reservoir operation. We have used the WILCO modelling to test how much of our proposed investment plan is linked to the change in abstraction licence at Elan Valley. We carried out an optimisation scenario that assumed no loss in deployable output in the Strategic Grid as a result of the changes to the Elan Valley licence. The results of this changed scenario on the optimised investment plan for the Strategic Grid are shown in figure E3.3 below. Figure E3.3: Strategic Grid alternative supply / demand investment plan assuming no Habitats Directive changes to Elan Valley licence 350 Strategic Grid Supply Demand Balance - No Habitats Directive changes scenario Scheme 22A Draycote expansion by 6 Per cent Effect Resource Scheme 62 Convert Short Heath BH to Potable Supply Effect Resource Scheme 47 Norton AR Phase Effect Resource Scheme 3 Trimpley-Worcs. Groundwater Conjunctive Use Effect Resource Scheme 96 Shropshire GW River augmentation Effect Resource Scheme 78 Whitacre ASR Phase 2 Effect Resource Water Efficiency Metering Pressure ALC SDB Gap Under this alternative scenario, the size of the potential supply / demand shortfall in this zone is significantly reduced, which results a smaller investment programme. Under our preferred plan, by 2025 we will have invested in around 90Ml/d of new supply capability and reduced leakage by around 44Ml/d. By comparison, under this alternative supply / demand scenario, we would deliver only an additional 30Ml/d of new supply capability and 30M/d of leakage reduction over the same time-period. This scenario gives us confidence in understanding the impact of the Habitats Directive changes on our Water Resources Management Plan. The impacts are significant and will put security of supply at risk if we do not provide alternative sources of supply before the licence changes come into effect. 3 Severn Trent Water: Final Water Resources Management Plan 204

14 Climate Change Impacted DO (Ml/d) E3.2 Assume a higher impact of climate change uncertainty In Chapter C2 we explain our approach to handling the uncertainty around the wide range of climate change impact scenarios. Our preferred way of representing the range of uncertainty around our central climate change estimate has been to use a triangular distribution in our target headroom modelling, taking the 0th and 90th ranked impacted scenarios from the 00 UKCP09 projections used in our impact assessment as our maximum and minimum changes in deployable output. This approach gives a representation of the drier and wetter scenarios produced by the UKCP09 projections for our region, but avoids skewing the distribution by not including the more extreme scenarios which have a low probability of occurring. A plausible, alternative way of representing the uncertainty around our central estimate of climate change is to use a discrete distribution representing the 20 sub-sampled UKCP09 scenarios. The impact of these two different two approaches is illustrated in figure E3.4 which demonstrates the range of deployable output uncertainty generated by the climate change scenarios in the Strategic Grid zone. The figure illustrates how the high, medium and low range used in our preferred plan headroom assessment compares with the wider range of uncertainty created by the discrete distribution. Figure E3.4: Comparison of climate change uncertainty using a triangular high, medium, low distribution against the full range of sub-sampled UKCP09 scenarios Strategic Grid Deployable Output at 2035 Mid Wet Dry Climate Change Scenario Ranking Baseline (Ml/d) We have used the WILCO modelling to test whether this alternative method of assessing climate change uncertainty makes a significant difference to our proposed investment plan. We carried out an optimisation scenario that used the discrete distribution of 20 potential climate change scenarios in the target headroom profile. This scenario produces a much higher target headroom requirement 4 Severn Trent Water: Final Water Resources Management Plan 204

15 Ml/d because of the wider range of supply / demand uncertainty. Chapter C2 gives a fuller description of the impacts on the headroom requirement. The results of this alternative planning scenario on the optimised investment plan for the Strategic Grid and Nottinghamshire zones are shown in figure E3.5 and E3.6 below. These are the two zones where climate change impacts are the dominant feature in our headroom uncertainty analysis. Figure E3.5: Strategic Grid supply / demand investment plan using the alternative approach to assessing climate change uncertainty Strategic Grid Supply Demand Balance - Alternative climate change uncertainty scenario Scheme 32 Little Eaton Conjunctive Use Effect Resource Scheme 29 Bromsgrove Groundwater Licence Transfer Effect Resource Scheme 22A Draycote expansion by 6 Per cent Effect Resource Scheme 62 Convert Short Heath BH to Potable Supply Effect Resource Scheme 47 Norton AR Phase Effect Resource Scheme 27 Hatton Conjunctive Use Effect Resource Scheme 2 Central Birmingham BHs to Potable Supply Effect Resource Scheme 3 Trimpley-Worcs. Groundwater Conjunctive Use Effect Resource Scheme 30 Lower Worfe Augmentation Effect Resource Scheme 96 Shropshire GW River augmentation Effect Resource Scheme 78 Whitacre ASR Phase 2 Effect Resource Pressure ALC SDB Gap Severn Trent Water: Final Water Resources Management Plan 204

16 Ml/d Figure E3.6: Nottinghamshire zone supply / demand investment plan using the alternative approach to assessing climate change uncertainty 50 Notts Zone Supply Demand Balance - Alternative climate change uncertainty scenario Scheme 3 Ogston to Mansfield Pipeline Enhancement Effect (Nottinghamshire) Resource Scheme 6 DVA to Nottingham Pipeline Enhancement Effect Resource (Nottinghamshire) Water Efficiency Pressure 0 ALC SDB Gap Under this alternative scenario, the size of the target headroom requirement in these zones is increased, which results in a greater supply / demand shortfall, particularly in the medium term. The investment optimisation model is able to close that gap using many of the same water supply schemes as in our preferred plan, but on an accelerated timetable. Under our preferred plan, by 2025 we will have provided around 90Ml/d of new supply capability in the Strategic Grid, and by 2030 this will have increased to around 25Ml/d. By comparison, using the alternative approach to incorporating climate change uncertainty, by 2025 we would have provided around 25Ml/d of new supplies in the Strategic Grid rising to 40Ml/d by Table E3. below lists the new supply options that feature in our preferred scenario and in the alternative climate change planning scenario. Table E3.: The optimised new supply schemes under the preferred plan and the alternative climate change assumptions Scheme option Proposed dwrmp Planning Scenario Alternative climate change assumptions Scheme 3 Trimpley-Worcs. Groundwater Conjunctive Use Effect Resource AMP7 AMP7 Scheme 78 Whitacre ASR Phase 2 Effect Resource AMP6 AMP6 Scheme 96 Shropshire GW River augmentation Effect Resource AMP6 AMP6 Scheme 62 Convert Short Heath BH to Potable Supply Effect Resource AMP7 AMP7 Scheme 22A Draycote expansion by 6 Per cent Effect Resource AMP7 AMP7 Scheme 29 Bromsgrove Groundwater Licence Transfer Effect Resource AMP7 AMP7 Scheme Belper Meadows Effect Resource AMP8 X Scheme 32 Little Eaton Conjunctive Use Effect Resource AMP8 AMP8 Scheme 47 Norton AR Phase Effect Resource AMP9 AMP7 Scheme 27 Hatton Conjunctive Use Effect Resource AMP0 AMP7 6 Severn Trent Water: Final Water Resources Management Plan 204

17 Scheme 35 Kenilworth BH Scheme Effect Resource AMP0 X Scheme 55 Bellington-Frankley Conj Use Effect Resource AMP0 X Scheme 64 Stanton & Milton Boreholes to Supply at Melbourne Effect Resource AMP0 X Scheme 30 Lower Worfe Flow Augmentation AMP7 AMP6 Scheme 2 Central Birmingham BHs to Potable Supply Effect Resource X AMP7 The table shows marked in green those schemes that are common to both scenarios. Those schemes marked in amber are those that feature in both investment planning scenarios, but are implemented in different AMP periods. Those marked in red are schemes that are not common to both investment planning scenarios. The table shows that 0 of the 5 potential new supply schemes are common to both planning scenarios, with seven of those common schemes being required in AMP6 and AMP7 in both cases. There are also three schemes common to both planning scenarios, but that would be brought forward for earlier delivery under the alternative climate change scenario. This reinforces that the schemes promoted in our preferred plan are appropriate to a sustainable and affordable strategy, but that there is a question over the pace at which they need to be delivered. We believe that the approach taken to addressing climate change uncertainty in our preferred plan is balanced and proportionate. However, the scenario analysis demonstrates that the schemes promoted in our preferred plan are also robust to the alternative assumptions around climate change uncertainty. The majority of the schemes we are promoting for AMP6 and AMP7 delivery would satisfy the increased planning uncertainty created by the alternative climate change approach. The alternative scenario testing has also demonstrated that we have a good understanding of which new supply options we would need to accelerate if needed as our understanding of potential climate change impacts improves over time. E3.3 Assume a more extensive requirement to reduce abstraction at sites potentially causing environmental damage In Chapter A2 we explain that our baseline deployable output projections include the impacts of any reduced or revoked abstraction licences at sites where we are likely to be required to change our abstractions. We also explain that we agreed with Midlands EA some pragmatic assumptions around sites where the environmental impacts of our activities are currently unknown, but are suspected. The purpose of this pragmatic list was to allow us to test our final WRMP against this alternative planning scenario. These additional assumed reductions are shown in table E3.2 below and amount to an additional 43Ml/d in abstraction licence reductions. Table E3.2: Pragmatic assumptions around sites where our impacts are currently unknown 7 Severn Trent Water: Final Water Resources Management Plan 204

18 EA RSA Site Name STWL Source Licence Name Current Daily Average (Ml/d) New Daily Average (Ml/d) GROUNDWATER SOURCES Cinderford Brook Buckshaft Licence reduction Ell Brook Newent Licence reduction River Churnet - Pool End Licence reduction Rudyard tributary Highgate Licence reduction Dover Beck & Oxton Blidworth Group Dumble Licence reduction Rainworth Water Clipstone Group Licence reduction Lower Worfe Copley 4.97 Licence reduction 3.57 Hilton Licence reduction Spadesbourne Brook Bromsgrove Group Licence reduction Hadley Brook Chaddesley Corbett Licence reduction Dunhampton Licence reduction Type The impacts of these further abstraction licence changes on water resource zone deployable output are shown in table E3.3. Table E3.3: Deployable output impacts of the pragmatic assumptions made around the Unknown sustainability changes WRZ DO Baseline (Ml/d) DO with Sustainability Changes (Ml/d) DO with Pragmatic Unknown sustainability changes (Ml/d) Comments Strategic Grid Approx 370 Further modelling required to better understand the full combined impact of the additional changes. Nottingham DO increases because of changes in SG zone deployable output. Shelton Ml/d reduction Forest and Stroud No Reduction North Stafford Ml/d reduction 8 Severn Trent Water: Final Water Resources Management Plan 204

19 The most significant impact of these additional, pragmatic assumptions is seen in the Shelton water resource zone. The preferred and likely list of licence changes in this zone translates to a modelled deployable output loss of 28Ml/d. Even with this loss of deployable output, in our baseline supply / demand projections used for the preferred plan, the Shelton zone would not face a headroom shortfall across the planning period. However, the impact of the additional pragmatic assumptions around future licence reductions in this zone would be to reduce the deployable output dramatically by 8Ml/d, a reduction of 56%. The effect on the Shelton zone of the pragmatic sustainability reductions would be to critically reduce the annual average abstraction from the north Wolverhampton groundwater sources at Hilton and Copley. Along with the licence reductions and revocations to sources supplying the Telford area, this effectively cuts the North Wolves demand centre off from the rest of the Shelton zone. There is not sufficient capacity in the supply system to transfer enough water from Shelton water treatment works to this demand centre to cope with these large reductions. Thus the zone fails as a whole at much reduced deployable output. The impact of this deployable output reduction would be to move this zone from a supply surplus to a headroom shortfall of up 49Ml/d. We used the WILCO modelling to test how our investment plan would be impacted by these potential additional abstraction licence reductions. We carried out an optimisation scenario that included these pragmatic assumptions around future sustainability reductions, in combination with those already on the confirmed and likely list of changes. The results of this changed scenario on the optimised investment plan for the Shelton zone shown in figures E3.7 and E3.8 below. Figure E3.7 demonstrates that the confirmed and likely sustainability changes used to inform our preferred plan mean that there is a need for capital investment to increase the output from our Uckington groundwater source to offset the loss of abstraction licences in the Worfe catchment. Once this replacement resource is in place, there is no further need for new supply investment in the Shelton zone. Our preferred strategy is to manage the future supply / demand balance in this zone through our ongoing baseline water efficiency activities and by continuing to drive leakage down. Figure E3.7: The Shelton zone preferred supply / demand investment plan 9 Severn Trent Water: Final Water Resources Management Plan 204

20 Ml/d Shelton Supply Demand Balance - Preferred plan Pressure ALC SDB Gap However, figure E3.8 shows that we would require a significantly different investment plan to accommodate the pragmatic assumptions around potential future additional sustainability changes in this zone. The investment modelling demonstrates that we would need to deploy around 45Ml/d of new supply capability in this zone to offset the impacts of these potential sustainability changes. It is also worth noting that this alternative investment plan for the Shelton zone would have consequences for the preferred plan for the Strategic Grid. These additional schemes in the Shelton zone would be mutually exclusive with preferred programme in the Strategic Grid zone, and could therefore significantly change the overall preferred programme. Figure E3.8: Shelton zone supply / demand investment plan using the pragmatic assumptions around additional RSA changes 2 0 Severn Trent Water: Final Water Resources Management Plan 204

21 Ml/d 80 Shelton Supply Demand Balance - Pragmatic additional RSA scenario Scheme 76 Expand Uckington BH Output Effect Resource Scheme 63A Stableford BH Recommissioning Effect Resource Scheme 33 Shelton WTW Expansion Effect Resource 20 Scheme 79B Wolves to Bham Strategic Link Maint Option B_N Option Effect (Shelton) Resource Pressure 0 ALC SDB Gap Our testing of this scenario told us that our proposed plan would not be robust enough to accommodate these additional sustainability changes. 2 Severn Trent Water: Final Water Resources Management Plan 204