Dŵr Cymru Welsh Water

Transcription

1 Dŵr Cymru Welsh Water Final Water Resources Management Plan September 2012

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3 TABLE OF CONTENTS INTRODUCTION, SUMMARY, AND CONSULTATION PROCESS 1. WATER RESOURCES MANAGEMENT PLANS Why we prepare plans Our approach to the development of this plan Our 2008 plan Other Developments since the 2008 Plan Strategic Links Compliance with Welsh Government Direction SUPPLYING WATER IN OUR AREA Water resources in our supply area Water Resource Zones - General WATER SUPPLY CAPACITY Deployable Output Resource Developments during Other changes since the 2008 Draft Plan Outage Levels of Service (LoS) Operational use of water Water Transfers Elan Builth Non-Potable Supplies Other customers Water Available for Use THE DEMAND FOR WATER Baseline demand Population forecasts Property Forecasts Household Demand Non Household Demand Distribution Input Managing Demand TARGET HEADROOM Calculating Target Headroom Risk Profile Baseline and Final Planning Work carried out since the 2008 Draft Plan THE HABITATS DIRECTIVE AND THE IMPACT ON WATER ABSTRACTIONS The Habitats Directive Review of Consents (and Restoring Sustainable Abstraction programme)... 57

4 6.3. The impact of Review of Consents upon Resources UNCERTAINTY REGARDING THE EFFECTS OF CLIMATE CHANGE How we approach climate change The impact on supply The Impact on Target Headroom - Supply The Impact on Target Headroom Demand THE SUPPLY DEMAND BALANCE Calculating the Supply Demand Balance The projected Supply Demand balance Brecon Portis Pembrokeshire South East Wales Conjunctive Use System (SEWCUS) North Eyri Ynys Mon OPTION APPRAISAL Our approach to appraising the options Identifying the feasible options Feasible List Environmental and Social costing Selecting the preferred option Optimisation model Preferred Options for Addressing Supply Demand Deficits (Without Incorporating the Full Range of UKCP09 Climate Scenarios in Target Headroom) Preferred Options for Addressing Supply Demand Deficits, Incorporating the Full Range of UKCP09 Scenarios in Target Headroom Sensitivity ENVIRONMENTAL APPRAISAL Introduction Strategic Environmental Assessment Habitats Regulations Assessment FURTHER WORK TO SUPPORT THE 2013 DRAFT WRMP

5 Introduction, Summary, and Consultation Process One of our most important responsibilities, as provided for under the Water Industry Act 1991, is to ensure that we can always meet the reasonable water needs of our customers now and into the future. And, like all other water companies, we are required periodically to produce a Water Resources Management Plan which demonstrates how we plan to balance supply and demand over the following 25 years. Although companies had produced Water Resources Plans on a voluntary basis for several years previously, the amendments to the 1991 Act which were made by the Water Act 2003 introduced for the first time a statutory requirement for companies to produce Water Resources Management Plans (WRMPs). As part of our preparation for the 2009 regulatory price-setting process, we submitted a Draft Water Resources Management Plan to the Welsh Government in March Following a Direction from the Welsh Government in January 2009, the Plan was published for consultation on 15 January However, it did not complete the full statutory process as it was never formally approved by the Welsh Government, primarily due to fact that, in certain important respects, it was overtaken by events, notably the need to consider the impact of the Habitats Directive. In October 2011 we submitted a revised draft Water Resources Managment Plan to Welsh Government, which considered the impacts of the Habitats Directive on water supply. This was subsequently published for public consultation. We published a Statement of Response to the Consultation in April 2012, addressing all the consultation responses we received on the revised draft Plan. Welsh Government wrote to us in July 2012, giving us Direction to amend the Plan to include the additional supporting evidence we had committed to providing in the Plan in the Statement of Response to the Consultation. At the beginning of August 2012 we provided an updated version of our revised draft Water Resources Management Plan to Welsh Government that included all the required amendments. Welsh Government gave us Direction to publish this version of the Plan as our Final Water Resources Management Plan on 20 August This document is therefore our Final Water Resources Management Plan for the period up to 2035, and sets out how we intend to achieve the required balance between supply and demand. Our aim is to do so efficiently so that water bills are no higher than they need to be and the impact on our environment is minimised. In order to develop the plan, we have projected the future demand for water from our customers, we have calculated how much will be available from current sources, and, where there is a shortfall, looked at all the ways of increasing supply and reducing demand so as to arrive at the best overall package of solutions. In general, we are currently in a relatively strong position on water resources. Wales has a comparatively wet climate and we abstract for public water supply just 3% of effective rainfall (which compares with much higher figures in parts of the South East of England, for example). Demand for water and the amount of water we abstract has fallen by a quarter over the last 15 years (as a result of halving of leakage and falling industrial demand for water) and we are forecasting more or less flat demand for water from our customers over the coming 25 years. This is based on Government and local authority projections of population and properties, and assumes no major upturn in the demand for water from heavy industry. All our 24 water resource zones currently have a surplus of supply over demand in both a normal and a Dry Year. 1 1 A Dry Year is defined as a year that is characterised by low rainfall and unconstrained demand. The Dry Years that we have experienced and which are incorporated in our modelling include 1976, 1984, and, for some zones, Page 1

6 However, we do not expect this situation to persist. Much of this document is concerned with the significant changes in our water resources position that we are expecting in the coming years. We have to plan and cater for likely and possible changes in the years ahead, and for this Plan those are greater and more serious than they have been for the last two or more generations. Specifically, the Plan has been prepared so as to take account of two very significant influences: the results of the Environment Agency Wales Review of Consents exercise which it has undertaken in the light of the European Habitats Directive. A significant feature of this process is that it entails the application of a precautionary principle under which potential adverse impact of abstraction is presumed unless evidence is available to the contrary, which typically is not the case; and an updated assessment of the possible impact of climate change on the water environment in Wales, as set out in the latest UK Climate Change Projections published in 2009 ( UKCP09 ), which may both reduce the amount of water we have available to supply, and increase demand from our customers. Together, these two developments could very significantly reduce, or eliminate, our water resource surpluses in some zones, creating deficits that could require significant investment to address. For example, in our South East Wales Conjunctive Use System zone ( SEWCUS ) which covers much of South East Wales, the Review of Consents process alone will reduce our Deployable Output by nearly 20%, the equivalent of what we need to meet the needs of consumers in the whole of Cardiff. More generally, the resultant tightening of our water resource position means that surpluses that we currently have cannot be regarded as being available to support long term economic development. For example, on the basis of the projections set out in this plan, new resources would probably be required to facilitate any further industrial development in Milford Haven. The one key message we want to get across from the development of this Plan and the consultation that has taken place, is that Wales does not have an abundance of water for public water supply and that we all need to value our water resources much more than in the past. The feedback we received on this Plan through the consultation process not only has assisted us in shaping the final Plan, but it will also influence our approach to the next draft Water Resource Management Plan, due in Structure of Final Plan This document is structured as follows. Chapter 1 sets out the context within which the final plan has been prepared, and the processes that have been applied. Chapter 2 provides a summary of the key features of our region and the water supply industry in general that are particularly relevant for water resources planning. Chapter 3 then explains the primary measures of water supply capacity, namely deployable output and water available for use (including the role of outage ), and Chapter 4 describes the main elements of the demand for water in our region together with the basis on which we have forecast demand out to Chapter 4 also summarises our approach to the management of leakage (leakage being one component of the demand for water) and the promotion of water efficiency, both of which will continue to play important roles in our water supply strategy over the Plan period. Chapter 5 then explains Target Headroom, the buffer that we build into our projections to allow for error and uncertainty for the purposes of determining when there is deemed to be a supply demand deficit. Page 2

7 Chapters 6 and 7 describe two exceptional influences on our water resources position over the Plan period. These are respectively the notification we have had from the Environment Agency that it has reviewed some of our licences and wants us to make significant sustainability reductions in the light of the Habitats Directive (reductions that we are assuming in this plan will come into effect in 2020), and the latest projections for climate change. Chapter 8 brings together the projections of demand, Target Headroom and Deployable Output to present the supply demand balance for each of our 24 water resource zones for the period to We show that, but for the effects of the Habitats Directive related review of our consents and climate change, we would be projecting no supply demand deficits over the next 25 years, but when they are taken into account deficits appear in some zones during the plan period. Chapter 9 then sets out how we have approached the evaluation of options for closing these deficits. These options range from increasing the storage available in our reservoirs to encouraging our customers to use water more efficiently. It shows how we have evaluated the options to arrive at a preferred list of viable solutions to the projected deficits. It sets out our initial estimates of the likely financial and carbon cost of progressing each of these options and the possible impact on customer bills. Finally, Chapter 10 summarises the environmental appraisals we have commissioned in connection with, and to support this Plan. A glossary of terms is included with the supporting Annexes. Building the Uncertainty Surrounding Climate Change into this Plan The biggest challenge we faced in preparing this plan was the question of how we should incorporate the latest climate change scenarios, UKCP09, into our projections, and in particular the uncertainty around the central projections. We are the first water company to use UKCP09 scenarios in the preparation of a water resources management plan, and the Environment Agency s guidance on how they should be incorporated was still under development when the work to support this plan was carried out. Following best practice in dealing with the uncertainty around climate change, we found that the UKCP09 scenarios had a very dramatic effect on the supply demand position in some parts of our region, notably the large South East Wales Conjunctive Use System zone that relies extensively on the River Usk and the Wye. From a baseline position in which the zone would be 75 megalitres per day (Ml/d) in surplus in 2035, the Review of Consents takes the zone into a small 3 Ml/d deficit, and incorporating the median climate change scenarios in calculations of Deployable Output extends this to 12 Ml/d. Allowing for the full range of UKCP09 scenarios on uncertainty in Deployable Output in Target Headroom, however, takes the projected deficit to 104 Ml/d by the end of the Plan period. Faced with this dramatic effect, we considered three options: A. plan on the basis of the full range of UKCP09 scenarios and present the options for addressing supply-demand deficits such as the one for SEWCUS referred to above; B. use the full range of UKCP09 scenarios, but discount their effect on a sliding scale, progressively more deeply the further into the future one is projecting. The rationale for this approach, which is used by several companies and is acknowledged in the Environment Agency s guidance, is that the more distant the uncertainty, the more time and scope there is available in the meantime to deal with it; or C. calculate and disclose the effects on Target Headroom of the full range of UKCP09 scenarios, but plan to address supply-demand deficits that exclude them. Page 3

8 We did not adopt option B because we believe it has the unhelpful characteristic of blurring the quantification and the management of uncertainty. We do not think that it makes sense to plan investments for an artificial scenario that acknowledges what it is that you think is going to happen but only addresses a part of it on the grounds that it is a long way into the future. We prefer to be explicit as to the magnitude of the risks we face, and to address them using considered judgement. We have evaluated in general terms what option A would mean for our investment plans. Chapter 9 presents our view of what they would entail, including the prospect of significant investment in desalination in South East Wales. We have not, however, followed option A in arriving at the final planning solutions for the purposes of this document, and have applied option C instead. Whilst we in no way understate the importance and potential impact of climate change on our future water supply position, given that the application of UKCP09 is a developing area, given that the potential supply demand deficits driven by uncertainty around climate change do not manifest themselves for several years, and given that we are due to prepare our next draft Plan at the same time as the other water companies in 2013, we have chosen in this document to confine our projections to the supply demand deficits that we are most confident we will have to address during the Plan period, and the least cost way of dealing with them. We do, however, present for information supply demand projections using the full range of UKCP09 scenarios in Target Headroom, and what would be the preferred means of addressing deficits under this alternative approach. In the meantime, we believe that we will be in a position to take a much more definitive view of the likely magnitude of such deficits and how they can best be addressed when we embark upon the next water resource management planning exercise in a year or so. The Timing of Licence Adjustments under the Review of Consents It is also worth highlighting that we have assumed, for the purposes of this Plan, that the licence amendments in the South East Wales Conjunctive Use System zone will not be formally put in place until Having said that, the sustainability reductions would not put the zone into deficit straight away - rather, according to current modelling, they would leave a small planning surplus for the time being. The size of the reductions contemplated is so dramatic that we consider that it would be prudent to carry out further detailed work on the way that the zone is operated in order to ensure that it is fully robust to such radical changes. Our Strategy Summarised The key elements of our overall strategy can be summarised as follows: regional leakage is expected to fall from Ml/d in to Ml/d in This strategy is in line with the targets agreed with our economic regulator, Ofwat. As part of the option selection process for addressing supply demand deficits we have considered options involving more reductions in leakage. However, none have been selected because of their comparatively high costs; the promotion of a wide range of water efficiency activities for both our domestic and business customers. For the period we will continue with our full suite of baseline promotion activities; the installation of water meters at all new properties and those households who opt to be metered under our free meter option scheme. We will continue to meter all new business customers and carry out selective metering on high water use unmeasured business premises; Page 4

9 for Pembrokeshire, where the deficit has been driven by the potential impacts of climate change and the significant impact of sustainability reductions being proposed by the Environment Agency, we are proposing to reinstate a currently licence-exempt groundwater source and carry out a network scheme that will enhance the connectivity of the zone. This is the most economic solution for the zone; in the Brecon Portis water resource zone where the Environment Agency wants us to reduce our abstractions from the River Usk at Brecon, we plan to supplement the available flow in the river with additional releases from the Usk reservoir, when required; and in the South East Wales Conjunctive Use System zone, we must address the effects of the Agency s review of our abstractions on the protected habitats in the Wye and the Usk, plus the effects of climate change on Deployable Output. We plan to reinstate two reservoirs that we have not used for public water supply for some time, namely Wentwood and Grwyne Fawr, and to build new treatment works for both sources. For the Preferred solutions in the three deficit zones, the total capital cost is estimated at 35.7m with a total operating cost, in the entire planning period, of 9.1m. We estimate that this will add approximately 5 to our average bills in today s prices by the end of the Plan period. Page 5

10 Future Challenges There are a number of key areas that will present great challenges for us and the rest of the water industry over the next 5-10 years. We have summarised these in the following table along with our intended approach to dealing with these challenges. Issue Climate Change Going Forward We have taken a pragmatic approach to the adoption of the latest UK climate chamge projections ( UKCP09 ) in advance of accepted industry guidance. However, in June 2012 the Environment Agency published its latest Water Resources Planning Guideline, which set out its position on how UKCP09 scenarios should be incorporated in water resource management planning for the 2013 draft WRMP submissions. Applying this guidance to our draft WRMP 2013 may effect the deficit position in some of our resource zones. Water Framework Directive In December 2009 the first round of River Basin Management Plans were published setting out the actions and strategies for rectifying those water bodies currently failing their objectives. During our current ( ) investment programme we anticipate that investigations that are underway into these failures could lead to further modifications to our operations being required. We are on the steering group of a key UK water industry research and development project 2 and will therefore contribute to decisions affecting how we should meet the Directive in our current and future investment programmes. Restoring Abstraction (RSAp) Sustainable Programme The Environment Agency s Restoring Sustainable Abstraction Programme is ongoing within Wales and we are aware there are a number of sites that the EA wishes to investigate further to assess what impact our operations are having upon the ecological integrity. We remain concerned regarding further investigations in this area and encourage the Agency to share this with us and allow us to work together. Review of the Plan In preparing this Final Plan we have undertaken many detailed studies. However, water resources planning is a dynamic process and we are committed to reviewing the key elements of the Plan, almost on a continual basis. In particular, feedback received on this plan will play a significant role in shaping our preparatory work for the draft Plan we intend to publish in We also intend over the next two years to: 2 UKWIR research project reference WR33 on Heavily Modified Water Bodies Page 6

11 review in full our demand forecasts (in particular taking account of the high demands experienced during the summer of 2010); revise our Economic Level of Leakage assumptions in line with Ofwat requirements for water company investment programmes for ; review and update the inflow sequences on which we base our deployable outputs; revise our water resources models and drought triggers to account for changes in legislation that prescribe the restrictions we can apply during droughts (this may impact on the Deployable Output of some our water resource zones); and maintain our supply demand balances in line with industry best practices. All these elements are likely to change the supply demand balance in some water resource zones and change the overall aspect of the water resources management plan for our investment programme. Finally, we will continue to discuss and review the key elements of the Plan through our close working relationship with the Environment Agency and other stakeholders. More generally, it is clear that the next few years will see a considerable amount of further work on the challenge of meeting water resource objectives in Wales, including in particular the creation of an improved evidence-based understanding of the impact of our abstractions on the environment. It is vital that the major strategic decisions that we make are the right ones both for current and future generations, and to this end we will seek to work closely and openly with our stakeholders, especially our environmental regulator the Environment Agency, over the medium term. Page 7

12 1. Water Resources Management Plans The purpose of this chapter is to set out the legal context within which this Final Plan has been prepared and how we have approached the task of putting it together. This includes a description of how our work has evolved since the previous plan in 2008, and how it links in, at a strategic level, with Government and regulatory policies and requirements Why we prepare plans Under the Water Industry Act 1991 all water companies are required to provide customers with a reliable supply of water for domestic and business purposes. Although companies had produced Water Resources Plans on a voluntary basis for several years previously, the amendments to the 1991 Act which were made by the Water Act 2003 introduced for the first time a statutory requirement for companies to produce Water Resources Management Plans. Under these provisions, we are required to prepare a draft Water Resources Management Plan and to consult with our customers and with other stakeholders as to its content. We regard this as a highly important exercise for our business: the security of water supplies is of paramount importance to our customers, and the way in which we achieve this can have significant implications for the costs we incur and hence the bills customers pay Our approach to the development of this plan The planning of long term water supplies is not a discrete task that takes place every few years: rather, we review on a continual basis our water resource position, the future requirements of our customers, and how they can best be met at least cost to them and at minimal impact to the environment. This plan therefore represents a snapshot of our most up-to-date thinking. It has been prepared in accordance with guidance provided by the Environment Agency 3 and, notably, takes into account the effects of the review of consents that the Agency has undertaken in the light of the Habitats Directive(see chapter 6 for details) and includes a full consideration of the latest projections of the effects of climate change (see chapter 7). As set out in chapters 8 and 9, we have identified three Water Resource Zones where we are expecting a supply-demand deficit during the Planning period. In order to determine how best these can be addressed we have identified and costed all the possible options for increasing supply and/or reducing demand, including a full evaluation of their environmental, social and carbon costs. It is important that we understand the potential environmental and ecological impact of any plans we put forward. We have therefore undertaken a Strategic Environmental Assessment (SEA) and a Habitats Regulations Assessment (HRA) of our preferred options for addressing the deficits. These are described in more detail in Chapter Our 2008 plan This is not the first water resources plan we have produced. Every 5 years each water company publishes a Business Plan following a very detailed review of all its future service and expenditure needs, including those relating to water resources. Our economic regulator, the Water Services Regulation Authority, Ofwat, uses this information when setting price limits for the following five 3 Water Resources Planning Guideline (WRPG) (EA, November 2008) Page 8

13 years. The last review of price limits was completed in 2009 when Ofwat set price limits for the period As part of our preparation for the price-setting process, we submitted a Draft Water Resources Management Plan to the Welsh Government in March Following a Direction from the Welsh Government in January 2009, the Plan was published for consultation on 15 January The 2008 Draft Plan was also included as part of the Business Plan we submitted to Ofwat later the same year, although its interim status was recognised given that it was still subject to consultation at the time. The 2008 Draft Plan did not complete the full statutory process as it was never formally approved by the Welsh Government. This was primarily due to fact that, in some respects, the Plan was overtaken by events, in particular the need to consider the impact of the review of our consents that the Environment Agency has undertaken in the light of the European Habitats Directive Other Developments since the 2008 Plan As well as the impact of the Habitats Review of Consents, this Plan also takes into account other significant developments since These include updated information e.g. on demand (see chapter 4), and the projected effects of climate change (see chapter 7) and feedback on our 2008 Plan from our main stakeholders. Table 1.1 below presents a summary of the main points of difference between this final plan and our 2008 Plan: detail on each topic will be found in the relevant chapters of the remainder of this document Draft Plan Final Plan 2012 Reason for Change Chapter Supply demand deficits Six of our Water Resources Zones were previously forecast to be in deficit and are now forecast to be in surplus during the planning period. Three zones are now presented as having forecast supply deficits. We have revised our demand forecasts and leakage strategy. We have also reflected the latest predictions about climate change impacts (UKCP09) and taken account of proposed modifications to some abstraction licence modifications that may be needed to meet the Habitats Directive. 4,6,7 Strategic Environmental Assessment Fully updated Different options have been assessed to reflect changes in predicted supply and demand in some zones. Representations received from the Countryside Council for Wales highlighted several areas that required amending/ updating. 10 Habitats Regulations Assessment Fully updated Our Habitats Regulations Assessment now incorporates the outcomes of the Environment Agency s review of our consents. 10 Different intervention options have been Page 9

14 2008 Draft Plan Final Plan 2012 Reason for Change Chapter assessed to reflect changes in predicted supply and demand in some zones. Representations received during the last consultation exercise from the Countryside Council for Wales, Natural England, Environment Agency and the Wye & Usk Foundation highlighted several areas that required amending/ updating. Outage Allowances updated Assumptions have been reviewed against actual data. Outage review is a continuous process. 3 Operational Use & Losses Allowances updated We have improved our data collection and reflected the results of a detailed pilot study of operational use at water treatment works. 3 Climate Change Use of UKCP09 Updated projections of climate change for the UK were produced in 2009 and analysed in preparation for this plan. 7 Sustainability Reductions Reductions incorporated From our consultation on the 2008 Draft Plan one of the main issues highlighted was the exclusion of the Environment Agency s proposed sustainability reductions because they had not yet been notified to the company. This Final Plan takes full account of the reductions. 6 Target Headroom Updated forecasting around the demand components of Headroom. Full review of headroom allowance. The Environment Agency raised concerns over large Headroom allowances in some zones. We have fully reviewed our uncertainty assumptions in these zones, particularly those regarding climate change 5 Demand Demand forecast fully revised and updated Changes in demand forecasts caused by effects of the current economic recession and changes in the rebasing of the data used in the forecasts from to Costing of Options Capital and operating costs updated in line with Welsh Water s Unit Cost Database (UCD) To ensure full consistency with Welsh Water s investment programme, all aspects of our Resource and Production schemes have been reviewed and re-costed, 9 Environmental & Social Costs Additional categories added to assessment To ensure a full assessment of the environmental and social costs associated 9 Page 10

15 2008 Draft Plan Final Plan 2012 Reason for Change Chapter Carbon Costing Carbon emissions updated Table 1.1 Updates since 2008 Draft Plan 1.5. Strategic Links with the implementation of water resource schemes, we have ensured that all options now use the same categories for Environmental and Social costs To ensure consistency with Welsh Water s business plan all our resource schemes embedded and operational emissions have been recalculated. 9 We operate in the broad policy framework that has been set by the Welsh Government. We have tried to ensure that we have full regard to its key strategies and policies in preparing the plan. We also work closely with the Environment Agency, and have discussed details of this plan with it, particularly the effect its proposed changes to our licences because of the Habitats Directive. We have also consulted with the Countryside Council for Wales and Natural England, particularly regarding the Strategic Environmental Assessment and Habitats Regulations Assessment so we can be confident that we have considered all the key environmental issues. We have summarised in Table 1.2 the main strategies and plans that have helped to shape our thinking in developing this document. Organisation Document Links to this Plan Welsh Government Welsh Government Welsh Government Welsh Government Strategic Policy Position Statement on Water (2011 update) Social and Environmental Guidance to Ofwat One Wales: One Planet The Sustainable Development Scheme of the Welsh Government People, Places, Future: The Wales Spatial Plan 2008 Update Sets out the Welsh Government s vision on how water resources should be managed in Wales Gives the Welsh Ministers guidance to Ofwat on how it should undertake its duties in relation to the Welsh Government s objectives. We need to have due regard to the Welsh Government s sustainable vision for Wales where land, freshwater and marine environment is best managed to provide the services of food, wood, water, soil, habitats and recreation. The Spatial Plan aims to safeguard and protect Wales natural and historical assets whilst enhancing their resilience to climate change. Welsh Government Welsh Government Climate Change Strategy for Wales Environment Strategy for Wales The Welsh Government s vision on tackling climate change in Wales and what it expects from industry. 95% of internationally designated conservation sites to be in favourable condition by 2010 Welsh A Low Carbon This policy statement sets out the Welsh Government s Page 11

16 Organisation Document Links to this Plan Government Welsh Government Environment Agency Wales Environment Agency Wales Environment Agency Wales Environment Agency approved by Welsh Ministers Environment Agency Ofwat Local Councils Revolution: The Welsh Government Energy Policy Statement Planning Policy Wales (Edition 3) Water for People and the Environment: Water Resources Strategy for Wales Water Resources Strategy for Wales First Action Plan Regional Action Plans River Basin Management Plans Catchment Abstraction Management Strategies Preparing for the future Ofwat s climate change policy statement Regional Development Plans/ Spatial Strategies Table 1.2 External Strategies and Plans we have considered 1.6. Compliance with Welsh Government Direction ambitions for low carbon energy in Wales. Sets out the land use planning policies of the Welsh Government and the key policy objectives for Local Development Plans in Wales which reflect the sustainable development agenda. Sets out how the Agency believes water should be managed in Wales until 2050 and lists actions and measures water companies should undertake to achieve its Vision. Sets out the required actions for the relevant parties to deliver the Agency s Water Resources Strategy. Localised plans containing actions the Agency wants water users to take to achieve their national strategy aims. How the Environment Agency will implement the European Water Framework Directive and the measures it wishes to implement for water bodies to achieve good status/ potential. Sets out water resource availability status across surface water/ groundwater catchments in England and Wales. This determines the Agency s licensing policy. Sets out Ofwat s expectation that companies will plan for the impacts of climate change upon their supply and demand balances within the water resource planning framework. These set out Councils aspirations for development in their area. Throughout the preparation of this Plan we have complied fully with the joint Department for the Environment, Food and Rural Affairs/ Welsh Government Water Resources Management Plan Direction (2007). The specific Direction items are covered in the following report sections: the planning period (item no. 2) - Introduction section; the frequency of customer restrictions (planned and actual) (item no. 3a) section 3.5; the option appraisal methodologies (item no. 3b) 9; the requirement to undertake carbon accounting (item no. 3c) section 9.4; Page 12

17 how account has been taken of climate change (item no. 3d) 7; and the estimation of household demand (item no. 3e) section 4.4. Page 13

18 2. Supplying Water in our area This chapter provides factual background on our water supply area. It explains some of the critical issues we must consider and describes how our assets have been developed and managed to ensure that we can provide a reliable supply of water to our customers Water resources in our supply area Welsh Water delivers water supply services to most of Wales and some parts of England, including most of Herefordshire. In total we supply water to around 3 million people, of which over 40% are concentrated in the south east of Wales in the Cardiff and Newport area and much of the remainder is located in the main population centres around the coast. These are in sharp contrast to the sparsely populated areas of mid-wales, where population densities are amongst the lowest in the UK. Wales has a relatively wet climate when compared to other parts of the UK. We estimate that we only use some 3% of rainfall, on average, for public water supply, which compares to 50% in parts of South East England. However, the regional picture masks important geographical differences within our supply area: for example, at up to 3,000mm per annum, rainfall in Snowdonia can be more than four times the levels recorded in the border areas and Herefordshire, where 700mm per annum is typical. The diversity of our water supply systems reflects these regional variations. Most comprise discrete small-scale local supplies, of which we have a considerable number, with only South East Wales being served by the sort of large scale multi-source integrated network that is typical in many other water company areas. Our main sources of water are our 65 impounding reservoirs. These are linked closely to our five major river regulation schemes: on the Rivers Wye and Usk in the south east of Wales; the Rivers Tywi and Cleddau in the south west; and the River Dee in the north. On average we abstract from the environment around 800 million litres a day (Ml/d) for public water supply. This normally increases by around 15-20% during the summer. During periods of extreme conditions long hot summers or sudden thaws following freezing weather the demands on our supply systems can increase by over 25%, and in some localised areas by nearly 50%. Figure 2.1 illustrates this variability and highlights the peaks in demand we experienced during the warm summer of 2006 and the very cold period just before Christmas Page 14

19 1000 Average Monthly Company Distribution Input (Ml/d) Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Figure 2.1 Variability of water volume put into supply Underlying these short term variations is a long term steady decline in overall water demand (see Figure 2.2). This is primarily due to the decline of heavy industry, particularly in South Wales, and the significant reduction in leakage from our networks over the past fifteen years. Figure 2.2 Declining trend in water supplied Page 15

20 Against this background, and notwithstanding a general perception that Wales has an abundant supply of water, our future water supply strategy faces a number of challenges, as set out in the remainder of this document Water Resource Zones - General Our water supply area is divided into 24 Water Resource Zones (WRZs). These zones are defined as the largest area in which all resources can be shared, and hence they represent a group of customers who receive the same Level of Service. The WRZs essentially define the limits of the areas beyond which water supply becomes increasingly uneconomic with the current supply infrastructure. The landscape of our supply area means that each of these WRZs is fairly self-contained, and the scope to move water between zones is extremely limited. Figure 2.3 shows our 24 WRZs, of which the largest is the South East Wales Conjunctive Use System zone (SEWCUS) which covers 40% of our customers, and the second largest is Tywi Gower, which covers another 20%. By contrast, the 8 smallest zones together cover just 1.5% of our customers. Table 2.1 below presents further details on each of the 24 WRZs and Table 2.2 presents the proportion of each local planning authority area within each resource zone. Figure 2.3 Water Resource Zones Page 16

21 WRZ No. WRZ name Area (km 2 ) Population served ( 000) 4 Water delivered (average, Ml/d) 5 Main Source of water North Wales 8001 North Eyri Ynys Mon 1, Reservoir storage 8012 Clwyd Coastal Reservoir storage 8014 Alwen Dee 1, Reservoir storage 8020 Bala Reservoir storage 8021 Tywyn Aberdyfi River abstraction 8026 Blaenau Ffestiniog Reservoir storage 8033 Barmouth Reservoir storage 8034 Lleyn Harlech Reservoir storage 8035 Dyffryn Conwy Reservoir storage 8036 South Meirionydd Reservoir storage South West Wales 8201 Tywi Gower 3, Reservoir storage 8202 Mid & South Ceredigion 1, Reservoir storage 8203 North Ceredigion Reservoir storage 8206 Pembrokeshire 1, Reservoir storage South East Wales 8101 Ross on Wye Bulk supply import 8102 Elan Builth 1, Reservoir storage 8103 Hereford 1, River abstraction 8105 Llyswen River abstraction 8108 Brecon Portis Groundwater abstraction 8106 Monmouth River abstraction 8107 Pilleth Groundwater abstraction 8110 Vowchurch Groundwater abstraction 8111 Whitbourne River abstraction 8121 SEWCUS 2, Reservoir storage TOTAL 20, Table 2.1 Water Resource Zones Key Facts and Figures 4 Source: Table 10 June Return Based on average water delivered Table 10 June Return with estimated zonal leakage included. Page 17

22 Table 2.2 The proportion of each Local Planning Authority within each Water Resource Zone Page 18

23 The following sections present further detail on each of our three sub-regions: North Wales, South West Wales, and South East Wales Water Resource Zones - North Wales The ten WRZs in North Wales serve half a million people living mainly in Chester and Deeside, Anglesey, the Bangor and Caernarfon area and the north coastal strip from Llandudno to Prestatyn. They also supply some large non-potable customers in the area, notably on Deeside. The WRZs in North Wales vary from very small areas supplied entirely from run-of-river abstractions to larger zones supplied from a combination of impounding reservoirs, run-of-river abstractions and groundwater sources. Some parts of North Wales experience a significant influx of tourists during the summer months, which increases the demand for water. As a consequence, the systems that supply these areas have to be able to meet these peaks whilst operating at lower levels during the remainder of the year. Rainfall across North Wales varies from upwards of 3,000mm per annum on the mountains of Snowdonia to 1,200mm per annum around the coastline of North Wales and Anglesey. The supply of water in North Wales may be significantly affected in the next few years by the potential development of a major new power station at Wylfa on Anglesey. When finally confirmed, the power station will require a substantial volume of water in a zone that is comparatively supply-constrained, and this will alter the complexion of water resource planning in the area. Although these plans are not sufficiently crystallised to be taken into account in this Plan, it is likely that they will be a central feature in the next draft Plan, due in Water Resource Zones - South West Wales The WRZs across South West Wales serve 0.9 million people living mainly in Swansea, Llanelli, Carmarthen and the coastal towns and villages from Pembroke to Cardigan. We also supply and support several large non-potable customers in the Pembroke Dock/ Milford Haven area. Much of South West Wales experiences a significant influx of tourists during the summer months, which increases the demand for water. Rainfall across South West Wales varies from a low of 1,047mm per annum at Nevern on the northwest Pembrokeshire coast to a high of 2,220mm per annum in the uplands of the Rheidol valley in Ceredigion. Rainfall in the main Tywi catchment averages around 1,600mm per annum. The WRZs in the region can be divided into two categories; small zones with relatively simple supply systems in the north west of the area (eg. North Ceredigion and Mid & South Ceredigion) and the more complex conjunctive use zones in the southern part of the region (eg. Pembrokeshire and Tywi Gower). One of the most significant zones in South West Wales Pembrokeshire is expected to require investment to meet a supply-demand deficit during the Plan period. A diagram of the zone is presented in figure 2.4 below. Bolton Hill Water Treatment Works is fed from the Eastern and Western Cleddau and supplies water to the southern half of the zone including Haverfordwest, Pembroke, Milford Haven and Tenby. Preseli Water Treatment Works, fed from Llys-y-fran Reservoir and the Eastern Cleddau (via Rosebush Reservoir), supplies the northern, more rural area and can also be used to supply water into Haverfordwest. Page 19

24 Figure 2.4 Pembrokeshire Water Resource Zones - South East Wales The WRZs across South East Wales serve 1.5 million people living mainly in Cardiff, Newport and the South Wales valleys. They also serve several large non-potable customers. Rainfall across South East Wales varies from as little as 700mm per annum in the eastern parts around Hereford to some 2,200mm per annum in mid-wales and the uplands of the South Wales valleys. The main lowland urban areas such as Cardiff receive around 1,200mm per annum, slightly under the average for Wales. Within this sub-region, the South East Wales Conjunctive Use System zone (SEWCUS) is our largest and most complicated WRZ. As set out in chapter 8 significant investment may be required in this zone during the Plan period. 6 A schematic diagram of SEWCUS is presented in Figure 2.5 below. 6 One other small zone in the South East also requires minimal investment, but this is negligible by comparison. Page 20

25 Figure 2.5 The South East Wales Conjunctive Use System SEWCUS There are several upland raw water reservoirs in the Brecon Beacons that can feed this zone, including: Talybont (shown in Figure 2.6 below, capacity 11,668 Mega Litres) which supplies the Usk Valley communities of Crickhowell and Abergavenny; Pontsticill (capacity 15,753 ML) which supplies areas of the South Wales Valley; and Beacons/Cantref/Llwynon (total capacity 8,572 ML) which supply Merthyr Tydfill and the area south towards Cardiff. The other major sources of raw water are the Rivers Usk and Wye. The former is used to fill Llandegfedd Reservoir (capacity 23,609 ML) near Cwmbran which in turn feeds Sluvad Water Treatment Works. It can also feed Sluvad and Court Farm Water Treatment Works directly. The River Wye is used to supply Court Farm Water Treatment Works. These Water Treatment Works feed the main urban areas of Newport and Cardiff. In addition there are a number of smaller reservoirs and Water Treatment Works that can supply water in this zone. Page 21

26 Figure 2.6 Talybont Reservoir Page 22

27 3. Water Supply Capacity The purpose of this chapter is to set out how we calculate the amount of water we can supply in each WRZ. This is a function of the Deployable Output of our water resource assets together with the allowances and adjustments that are made for the operational losses that are inherent in the treatment and of water, 7 outages, and transfers Deployable Output Deployable output (DO) is the maximum quantity of water from a source, a group of sources, or from a bulk supply, that can be sustained during a Dry Year. Output can be constrained by: abstraction licence conditions; the capacity of assets (pumping stations, treatment works, mains); water quality factors; or environmental needs, for example freshet releases. We have assessed Deployable Output in accordance with Environment Agency guidelines and best practice methodologies 8 and have specifically carried out in-depth modelling to re-assess Deployable Output in the 15 of our 24 WRZs where the supply system is complex. In the other 9 WRZs this has not been necessary, either because the zone is served by a simple, single source, or because Deployable Output is effectively capped by abstraction licence conditions. For the modelling of the 15 complex zones we have used our WRAPSim software. This tool examines how well a water supply system would perform in meeting demands under a variety of historical climatic conditions and seeks to optimise the operation of the system. A complete re-assessment of Deployable Output for all zones was undertaken during the preparation for the 2008 Draft Plan. The key activities involved in this were: an up-to-date review of the operational network and constraints; a review of our demand modelling, and peak demand in particular: high peak demand during the summer can limit Deployable Output later in the year; a complete re-evaluation of the information available on reservoir inflows, including a review of all available historical data and the identification of the most appropriate source of information on inflows for use in the planning process; update of the model data on inflows to 2007 where available; the development of eight new rainfall-runoff models and improvements to existing ones; and 7 Losses from the distribution system are part of leakage and are included in demand, as described in chapter 4 below. 8 Surface Water Yield Assessment (National Rivers Authority, 1995); Reassessment of yield methodology (EA, 1997); A Unified Methodology for Determination of Deployable Output from Water Sources (UKWIR and EA, 2000). Page 23

28 a re-assessment of the Emergency Provision requirements.9 The notable feature of this work was the analysis of 2006 demand. Although overall demand for water in 2006 in Wales was considered to be normal, most WRZs experienced exceptional peak demands. We have built these unusual demand patterns into our projections going forwards. We set out the methodologies used in the re-assessment of Deployable Output in our 2007 June Return to our economic regulator, Ofwat. Comments made by the Environment Agency in November 2007 have been addressed as part of our ongoing dialogue with the Agency and have been reflected in our technical work as appropriate. 10 In addition, since November 2007, we have continued to update the following components: our assessment of peak demands, and how they relate to normal demand; reservoir and catchment inflows, following updates of Environment Agency data; and the baseline models we use to incorporate the actions and triggers defined as actions in our Drought Plan. 11 This is in line with our Company policy on Level of Service and is in accordance with Environment Agency methodology. We will continue to update and refresh our planning tools to reflect up-to-date experience, notably the drier than average conditions that characterised the early summers of 2010 and Groundwater Sources A review of groundwater source yields has also been completed in accordance with national best practice guidelines. 12 As a result of the natural landscape and geology of Wales, groundwater accounts for just 5% of the total water supplied. Most groundwater sources are operated conjunctively with surface water sources and are used intermittently. However, some small sources are always in use and provide constant supplies to local areas that cannot be supplied by other means Emergency Storage An emergency storage allowance has been incorporated into our Deployable Output assessments, in accordance with Environment Agency methodology. This provides the reserve of water that is considered necessary in view of the uncertainty regarding the duration and severity of droughts. The emergency storage allowance adopted has been set at 30 days, which is in the middle of the range (15-45 days) suggested by the Environment Agency guidance Dead Storage Dead storage is the volume of water in a reservoir that lies below the lowest draw-off point and therefore cannot be abstracted under normal operating conditions. A review of dead storage 9 As set out in the EA s 1997 Re-assessment of Water Company Yields. 10 See, in particular, Deployable Output Values for Draft 2007 Water Resources Management Plan (WRAPSim modelled zones) : Entec, November Final Drought Plan (DCWW, 2009, awaiting Direction to publish from WG). 12 The Methodology for the determination of outputs of groundwater sources (UKWIR, 1995b); A methodology for the determination of Groundwater Sources (UKWIR, 1995); Critical Period Groundwater yield (UKWIR/EA 2001). Page 24

29 allowances has been undertaken using data collected from bathymetric surveys and the results have been incorporated in the Deployable Output calculations. Appropriate linkages with the Drought Plan have been made where it is considered that dead storage may be used in drought conditions Resource Developments during As part of the re-assessment of Deployable Output, we identified a number of capital schemes which would improve the security of water supplies and bring about improvements. These schemes include those originally identified in anticipation of our investment programme and a number of additional resource schemes that were implemented during that period. These are detailed in Annex Other changes since the 2008 Draft Plan With three exceptions, there have been no further updates to our assessment of Deployable Output since the 2008 Draft Plan. First, we found that the efficiency of the abstraction from Llys-y-Fran reservoir could be improved, increasing the Dry Year Annual Average Deployable Output from 77 Ml/d to Ml/d. Details are set out in the supporting technical report. 13 Second, prompted by the dry summer of 2010, a number of operational measures were taken in the SEWCUS WRZ to ensure continuity in the provision of services to all our customers. These changes, mainly relating to network configuration, were incorporated into the SEWCUS WRAPSim model and the annual average Deployable Output increased from 465 Ml/d to 477 Ml/d as a result. Details are set out in the supporting technical report. 14 Third, following the completion in March 2009 of a scheme in North Eyri Ynys Mon to improve security of supply, details of the final delivered outputs of the project were incorporated into the WRAPSim model, which had previously relied on theoretical design information. Annual average Deployable Output decreased from 52.8 Ml/d to 51.0 Ml/d as a result Outage Background Outage is defined as the temporary loss of Deployable Output due to planned and unplanned events in a Dry Year (or drought period). An allowance for outage is required in order to recognise that at any given time some assets will temporarily be out of action for one reason or another. It is important to estimate outage for each WRZ individually: this is done by taking a pragmatic view of the potential future reduction in Deployable Output that could be caused by asset failures and/ or operational problems. The estimation of outage is based on records of past events which resulted in a loss of Deployable Output O and an assessment of the risks of unplanned events occurring in the future. We have used Review of Consents Supply Assessment in Pembrokeshire Water Resources Zones, Final Report (Entec, Jan 2011) Review of Consents Supply Assessment in SEWCUS Water Resources Zones, Final Report (Entec, Jan 2011). 15 North Eryri Ynys Mon WRAPSIM changes to DO Model : Welsh Water, October Page 25

30 best practice UK Water Industry Research (UKWIR) methodology 16 in accordance with the Environment Agency s Guideline, to determine the outages for all of our WRZs Our estimation of outage Since 2005 we have gathered outage data on a monthly basis at Water Treatement Works level, classified in accordance with the six main categories set out in the UKWIR report. This enables us to carry out an annual assessment of outages and their causes. The six categories are: algae where this may be present in the raw water, affecting quality at source; planned outage these are known planned maintenance activities, and are divided into those that would take place even in a drought situation and those that could be delayed until a nondrought period; power failure this highlights areas where temporary and back-up generation is not adequate to maintain operation; source pollution where, for example, there is a risk that a river could be contaminated due to a spillage; system failure events where equipment has failed; and turbidity again, affecting raw water quality. The methodology we use assesses the probability of events occurring by looking at the duration and magnitude of observed events; we have modified this by adding information on the frequency with which these events occur. The monthly data we collect are fed directly into this assessment. 17 The final outage estimate derived from this process is ultimately presented as a reduction in Deployable Output. We have assessed outage at WRZ level for both annual average and critical period 18 scenarios. In assessing outage, we ensure that there is no double counting of Water Treatement Works losses or operational use that is accounted for elsewhere. As part of updating our analysis, we found that some double-counting had previously occurred in relation to turbidity which, as well as being accounted for in outage, had been identified as a cause of significant higher operational use associated with increased filter washing caused by greater turbidity. Consequently, our assessment of outage has been reduced in some WRZs Changes since the 2008 Draft Plan Since publication of the 2008 Draft Plan we have carried out a two-stage review of outage to take account of new evidence from the monthly data collection exercise. In Stage 1 we compared the estimates and assumptions on which our outage assessment was based against actual up-to-date evidence, and made adjustments where significant differences were observed, taking into account Dry Year influences where appropriate. We also considered allowing 16 Outage Allowances for Water Resource Planning : (UKWIR, 1995). 17 Review of Outage Assumptions for Post Draft Water Resources Management Plan : November 2008 Entec, This is the period of peak demand within the Dry Year. Page 26

31 for events that were considered possible even if there had been no actual occurrence during the period over which monthly data had been collected. In Stage 2 we examined our Drinking Water Safety Plans and the risks identified within them relating to source pollution. Where there is a risk of source pollution that had not been captured using the actual events database, our outage assessment was amended accordingly. Our outage calculations have been updated in this Plan for those WRZs that have been subject to reductions in Deployable Output as a result of implementing the outcomes of the Environment Agency s consent review exercise: outage has also been updated for North Eyri Ynys Mon zone because this is the other significant WRZ there has been a re-assessment of Deployable Output Levels of Service (LoS) A key role in Water Resources Planning is played by the frequency with which a hosepipe ban or a Drought Order/ Permit would be expected to be required in order to maintain water supplies, the Level of Service. We believe that it would be wrong for us to plan for a level of service that would guarantee there would never be any customer restrictions as this would require enormous investment in additional water resource assets (principally reservoirs) which would be used very infrequently. This would require much higher levels of customer bills, which we do not consider could be justified, and would be environmentally unacceptable. The Company has accordingly set its minimum overall level of service as follows: not more than once in every 20 years, on average, for a hosepipe ban, and not more than once every 40 years, on average, for Drought Orders/ Permits. We view the imposition of rota cuts and standpipes, which represent more severe restrictions on customer use, as unacceptable. This is for several reasons, notably the risk to public health that rota cuts and standpipes entail. In practice the actual current level of service in each of the 24 WRZs varies and is shown in Table 3.1. To ensure compliance with the Water Resources Management Plan Direction (2007) and as requested by the Agency in their Statement of Response Advice Report to the Welsh Government on our 2008 Draft Plan, for each WRZ we have assessed the impact of each resource option upon the level of service. We have ensured that all intervention options are compliant with our current level of service and the reported increases in DO reflect this. However, where appropriate, changes to level of service as a result of the options have also been considered. It is theoretically possible to increase the Deployable Output in a zone by lowering the level of service. Changes to our overall level of service are therefore one of the options when we are considering how to address supply demand deficits. 19 R143 NEYM outage update Nov 2010 Entec UK Limited, November Page 27

32 Water Resource Zone Hosepipe Ban Levels of Service 20 (years) Drought Order/ Drought Permit 8001, North Eyri Ynys Mon 1 in 24 >1 in , Clwyd Coastal 1 in 22 1 in , Alwen Dee 1 in 29 1 in , Bala >1 in 84 >1 in , Tywyn Aberdyfi >1 in 48 >1 in , Blaenau Ffestiniog 1 in 24 1 in , Barmouth 1 in 48 >1 in , Lleyn Harlech 1 in 24 1 in , Dyffryn Conwy 1 in 29 1 in , South Meirionnydd >1 in 48 >1 in , Ross on Wye >1 in 33 >1 in , Elan Builth >1 in 33 >1 in , Hereford Conjunctive Use System >1 in 33 >1 in , Llyswen >1 in 33 >1 in , Monmouth >1 in 33 >1 in , Pilleth >1 in 33 >1 in , Brecon Portis >1 in 33 >1 in , Vowchurch >1 in 33 >1 in , Whitbourne >1 in 33 >1 in , SEWCUS >1 in 33 >1 in , Tywi Conjunctive Use System 1 in 36 >1 in , Mid & South Ceredigion 1 in 23 >1 in , North Ceredigion 1 in 35 1 in , Pembrokeshire 1 in 36 >1 in 36 Table 3.1 Actual Level of Service 20 Note that > 1 in 33 denotes a better level of service than 1 in 33, not a frequency that is greater than 1 in 33. Also, it should be pointed out that >1 in 33 refers to those situations where we have records for the last 33 years, during which there have been no restrictions. Page 28

33 3.6. Operational use of water Water can be lost during the routine operation of raw water mains and water treatment works. Overall we estimate some 3% of water is lost in this way Water Transfers Potable supplies There is some limited scope to transfer water, both raw and treated, between particular parts of zones in our area and in the form of bulk supplies between ourselves and neighbouring water companies. A summary of our transfers is shown in Table 3.2. Export from Import to Maximum Volume (Ml/d) Alwen Dee WRZ Dee Valley Water 0.16 Lleyn Harlech WRZ* Barmouth WRZ 1 Severn Trent Water South Meirionydd WRZ 0.45 South Meirionydd WRZ Severn Trent Water 0.12 Severn Trent Water Ross-on Wye WRZ 9 Hereford WRZ* Whitbourne WRZ 0.33 Hereford WRZ* Ross on Wye WRZ 1 Tywi Gower WRZ SEWCUS WRZ *Schemes delivered in AMP4 to increase inter-zonal transfer capability Table 3.2 Water Transfers Further details of three of these transfers are provided below. Tywi Gower to SEWCUS Our latest assessment of the maximum level at which water can be transferred from Tywi Gower to SEWCUS is based on WRAPSim modelling that takes into account changes made to the supply system following the dry summer of 2010 (as described in section 3.3 above) and confirmation of the capacity of the network to deliver transfers at a higher level. This is one of the reasons for the change in Deployable Output for the South East Wales Conjunctive Use System, SEWCUS, described in section 3.3 above. Alwen Dee to Dee Valley Water The River Dee is a regulated source that is managed in accordance with the Dee General Directions which are the responsibility of the Environment Agency, supported by the three major water companies in the area (Welsh Water, Dee Valley, United Utilities) and British Waterways Board. As part of this complex arrangement we also export a small amount of water to Dee Valley Water in the lower part of the Dee system which enables them to supply domestic properties in that area. Severn Trent Water to South Meirionydd The landscape of South Meirionydd WRZ and the limited small-scale supplies in the area can make supplying water a challenge. Hence, it is beneficial to both us and Severn Trent Water (whose supply boundary is on the border with the South Meirionydd WRZ) to have an exchange of water in certain Page 29

34 locations. There is an import into the zone from Severn Trent Water of 0.45 Ml/d, and an export from the zone to Severn Trent Water of 0.12 Ml/d Elan Builth Since the 2007 June Return we have modified the reporting of Elan Builth WRZ so as to show only the Welsh Water abstraction allowance (around 5 Ml/d) within this zone and not the significantly greater proportion exported to Severn Trent Water (up to a maximum of Ml/d) from the Elan reservoirs. This amendment was agreed with the Environment Agency for the 2008 Draft Plan and removed any discrepancy relating to the reporting of Deployable Output of a Severn Trent source which is within their, and not our, control Non-Potable Supplies In addition to supplying domestic and non-domestic customers with potable water, we do in certain instances and locations supply large industrial users with water that has not been treated to potable standards but that is suitable for their purposes. There are two zones where these supplies share water resources assets with potable water supply systems and where the non-potable supplies are relevant to the calculation of Deployable Output. Pembrokeshire WRZ In this WRZ we supply a number of industrial users of water in and around the Milford Haven area, mostly involved in the oil refinery, natural gas and power generation industries. The water is primarily used for tank cleaning and cooling purposes. The supply of non-potable water is taken account of directly within Deployable Output in this zone, as both potable and non-potable supplies are drawn from the same raw water source. At present the supply of water for industrial purposes equates to approximately 27 Ml/d. The South East Wales Conjunctive Use System (SEWCUS) WRZ We also supply non-potable water to industrial customers in the SEWCUS zone. As in Pembrokeshire, this water is directly accounted for within Deployable Output as it is primarily supplied from raw water sources that are also used for domestic supply Other customers There are a number of other Industrial customers that are supplied with non-potable water through discrete supply systems. These do not affect the supply demand position in any of our WRZs because they do not share assets with potable water supply systems and therefore do not affect Deployable Output. Further details of these supplies are reported to Ofwat and the Environment Agency on an annual basis. We also provide a non-potable bulk supply to Albion Water. This water is not accounted for within our supply demand balance for the Alwen-Dee WRZ because the supply system currently shares no assets with our potable supply systems (although the non-potable resource could fairly readily be redeployed for potable use if necessary in the future) Water Available for Use Water Available for Use is defined as the volume of water available once we have adjusted Deployable Output for outage, transfers and operational losses, and provides the figure we use for planning purposes as the amount of water we can expect to be able to supply. It is Water Available Page 30

35 for Use that provides the figure that, if exceeded by the sum of Demand and Target Headroom (see below) signifies that a zone is in deficit. Page 31

36 4. The Demand for Water This section provides a summary description of how we compile forecasts of the demand for water. We begin by establishing a baseline position and then, by looking at factors such as projections of population and household occupancy, we calculate how demand for water may change. Full details of how we have prepared our demand forecasts can be found in our Technical Report, Demand for Water Resources Baseline demand Baseline demand forecasts include our current demand management policies (Section 4.6) but exclude the effects of any additional demand management measures identified by the option appraisal (9). This approach is in full accordance with the Environment Agency guidance (2008). For the purposes of preparing our demand forecasts we chose as the base year, as this was the latest year for which actual data was available when we embarked on the planning process. In line with Agency guidance (2008) though, the years and have been retained and shown in the supporting Water Resource Planning Tables to enable comparison between the 2008 Draft Plan, and this Plan Base Data population and properties Base year population for each WRZ was derived by adding one year s growth to 2007 estimates, verified by reference to data published in 2008 by the Office of National Statistics and the Welsh Government. Base year property numbers are as reported in our 2009 June Return to Ofwat, and are derived from extracts from Welsh Water s Customer Accounting System. Using information on customer addresses, we are able to allocate properties to WRZs, categorised into measured, unmeasured, households and non-households. Occupancy rates are based upon a 2003 customer survey, supplemented by an annual zonal review based upon metered consumption data and additional data obtained from customers as part of meter option requests. In some areas the number of second homes is high and it is necessary to take this into account. To establish base year consumption for each customer type we use data from our Domestic Consumption Monitor 22. The primary purpose of the Monitor is to enable our Company to determine unmeasured household Per Capita Consumption. During , Welsh Water undertook a review of its current unmeasured Per Capita Consumption strategy. A revised strategy was developed to build upon the existing monitoring areas to improve the geographical representation of the Domestic Consumption Monitor. This will provide more robust estimates of unmeasured Per Capita Consumption in the 24 WRZs in the future. Work has begun to select additional monitoring areas following a best practice review 23 to bring the total number in the Domestic Consumption Monitor up to approximately 150. As part of this process, the current areas will also be reviewed to ensure that they 21 Technical Report, Demand Forecasts for Water Resources Plan 2010 : Welsh Water, Our Domestic Consumption Monitor involves recording the consumption pattern of a fairly large number of homes over an extended period of time. The aim is to produce a quantitative understanding of water consumption for various household types. The large number of houses and time period of the monitor allow trends and seasonal patterns to be investigated. Our DCM complies with Industry Best Practice. 23 Best Practice for Unmeasured Per Capita Consumption Monitors (99/WM/08/25), UKWIR 1999 Page 32

37 comply with the UK Water Industry Research best practice guidance and thus remain suitable for inclusion in the Domestic Consumption Monitor Unmeasured Per Capita Consumption (pcc) For , the regional annual average unmeasured Per Capita Consumption was derived from 15- minute logged data from the Domestic Consumption Monitor with a total population of 66,554 in unmeasured households. There has been no change to the methodology used to calculate unmeasured Per Capita Consumption since the Draft Water Resource Management Plan was published. However, to simplify the data collection and data checking processes and to allow for the eventual addition of new monitoring areas, both the 15 minute flow data and base data are now input to and processed in the corporate Leakage Monitoring and Reporting System software which calculates the unmeasured Per Capita Consumption using the verified data. Analysis of data from the Monitor produced an unadjusted annual average unmeasured household Per Capita Consumption value of 154 l/h/d for the base year. After various adjustments, as set out in on June 2009 Return to Ofwat (notably those made as part of the overall reconciliation of the water balance) the figure we reported and have used as the basis for our demand forecasts is l/h/d. For each WRZ, unmeasured Per Capita Consumption was calculated by multiplying regional unmeasured Per Capita Consumption by the ratio of measured Per Capita Consumption for the zone to regional measured Per Capita Consumption. Measured Per Capita Consumption data from a single year ( ) has been used to estimate ratios for each zone. Page 33

38 4.1.3 Measured Per Capita Consumption Total measured water delivered (household and non-household) is constrained to reconcile with the total volume derived from the income received. The initial estimate of measured household Per Capita Consumption (as recorded) was l/h/d. This was derived by dividing the consumption recorded by over 340,000 meters, adjusted to reconcile with income, by the population in billed measured households. In the 24 WRZs, values ranged between l/h/d (Elan Builth) and l/h/d (Whitbourne). The average consumption per property in 2008/09 was 200 l/pr/day. This is 10 l/pr/day higher than the equivalent figure. Consumption at property level is subject to more detailed analysis in which trends in average consumption by groups of household types are tracked. The corresponding estimate of measured household Per Capita Consumption for , after adjustments, was l/h/d Non-Household Per Property Consumption Non-household consumption is predominately measured, with only 10,000 properties (less than 1% in terms of volume) remaining unmetered within our supply area. Our Compulsory Metering Policy is that all non-household premises will be on a metered charge basis and these have been built into the ongoing metering programme. It is estimated that we will transfer around 500 properties per year on to a metered basis. We derived the unmeasured non-household per property consumption estimate by examining the consumption records of customers that have been compulsorily metered over the last nine years. This produced a figure for of 487 l/pr/day Normalisation of Base Year Finally, it was necessary to make adjustments to base year demand estimates to reflect the extent to which the base year was not normal. Using regression techniques to explore the relationship between consumption and weather (rainfall and temperature) we identified that was comparatively wet, and adjusted the demand components upwards accordingly Population forecasts Local Authority Projections There are two projections of population available to us: one provided by the Welsh Government, which is based on 2006 population estimates; and one provided by the Office of National Statistics. These generate different figures for population growth, the first projecting an annual increase of around 17,000 and the latter forecasting slower growth of 14,600 per annum. In accordance with Government guidance 24 on how to address this discrepancy we have used the Office of National Statistics figures for total population and the Welsh Government projections to divide overall totals between WRZs Migration The biggest driver of population growth in Wales is likely to be inward migration. However, this is expected to be slower in the short to medium term than the levels observed in recent years. Our 24 Statistics for Wales Local Authority Population Projections for Wales (2006-based) Summary Report. Page 34

39 projections therefore assume a lower level of migration over the next few years, returning to trend after Insets An inset appointment is made where an existing supplier is replaced by another supplier of water or sewerage services for customers in a specified area; an inset appointment can only be made for part of a current supplier s area. Two inset appointments have been made in our water supply area, but it is not possible to forecast the extent to which further inset appointments will be made in our area in the future. However, from the point of view of water resource management planning, the important point is that while insets will affect the number of customers we serve they will not affect our demand forecasts because we will almost certainly still supply the water. We have also assumed that household and customer demand characteristics will be unaffected by the making of inset appointments Non-household Population Non-household population (e.g. resident in prisons, university campuses, military bases) is forecast to rise slowly, directly in line with the increase in the level of non-household properties forecast for the period Population Forecasts Future estimates of population in metered households are based on forecast numbers of new properties, optant, 25 and selectively metered households, multiplied by projected occupancy rates. Similarly, average occupancy rates in non-household properties are multiplied by the number of forecast non-household properties. The remaining population from the overall population forecasts is allocated to the unmeasured household stock. 25 Customers who have chosen, or opted, to be metered. Page 35

40 Figure 4.1 shows the historical and projected population forecasts for the different customer categories. Figure 4.1 Population Forecasts 4.3. Property Forecasts Projections We have based our forecast of the rate of change in the number of household properties within our area on trends from the last 9 years. We estimate that there will be 9,000 new household connections in a normal year. However, given the current state of the regional economy we are currently experiencing lower new connection rates, and have reflected this in our near term forecasts. From we forecast the level of new households built in our region to return to normal levels, and over the ten years we are forecasting an element of catch-up, with new household connections increasing above the long term normal level for a temporary period Government Statistics on Property Numbers In June 2009, the Welsh Government published household projections for Wales at a National and Local Authority Level. In addition, a number of Local Authorities have published Local Development Plans. Our property forecasts for the 2008 Draft Plan for the Herefordshire area were based on information received from Hereford County Council. Our revised forecasts take account of the latest revisions to the Regional Spatial Strategies. Page 36

41 4.3.3 Insets and Non-households As mentioned earlier there may be a trend to customers in new properties in Wales being served by inset appointee companies, but we nonetheless include these in our forecasts, because we expect to have to supply them with water, whether directly or through an intermediary. The level of non-household properties is forecast to continue to rise slowly throughout the planning period at a steady rate of 200 properties per year. The already low level of unmeasured nonhouseholds is forecast to continue to fall over the planning period Metered/ Unmeasured Split The proportion of household customers on a metered supply will continue to rise. All new connections to our network are required to be metered and we continue to see unmeasured customers opting to have a meter installed at a steady rate. Overall, we estimate that the number of customers opting to be charged on a measured tariff will continue at 2.5% of the number of households remaining unmeasured at the start of each year. Figure 4.2 shows historical and projected household forecasts for the period to Figure Household property forecasts 4.4. Household Demand Figure 4.3 shows the historical and projected household demand forecasts for the period to , for both the normal and Dry Year forecasts. The shape of this curve reflects the interaction between the upward pressure on demand caused by population and property growth, and the downward pressure on demand caused by metering. The margin between Dry Year and normal demands varies from zone to zone, but averages across our region at approximately 4%. Page 37

42 Normal year forecasts of unmeasured and measured household demand were calculated by multiplying together the forecasts of population and Per Capita Consumption. The zonal Per Capita Consumption forecasts applied were derived by multiplying the regional forecasts by the zonal unmeasured and measured Per Capita Consumption ratios (section 4.1). Ofwat s Water Efficiency Targets have not been included in the calculation of the demand forecasts because they were produced too late in the demand forecasting process for the Water Resources Management Plan to enable them to be explicitly accounted for. Consultation on the proposed Water Efficiency Targets began in June 2008 and the Ofwat document setting out the water efficiency targets for 2010/11 to 2014/5 was published in This was several months after the demand forecasts used in the WRMP were finalised. However, the demand forecasts used in the WRMP did incorporate water efficiency savings in the Per Capita Consumption forecasts by making assumptions on, for example, increasing penetration of low flush toilet cisterns and gradual replacement of washing machines and dishwashers with more water efficient models. Further details on Ofwat s Water Efficiency Targets are provided in section Efficiency Targets. We are committed to including the effect of Ofwat s Water Efficiency Targets on the demand forecast in our 2013 draft Water Resources Management Plan. Figure Household Demand Forecasts Page 38

43 4.5. Non Household Demand Economic Sectors We have been monitoring the measured water consumption of 13 sectors of economic activity for over 12 years, and use this data as the basis for forecasts of future demand, as well as for other purposes such as the estimation of night use allowances in leakage reporting Non-household Demand Our forecasts of non-household measured water delivered have been made by extrapolating past trends. Our analysis of demand by sector has now been in place for over 10 years and provides a basis for forecasting that we consider to be at least as robust as the approach used previously under which consumption was defined as a function of future changes in economic conditions. Longer term forecasts of non-household demand are notoriously difficult to make. In the demand forecasts prepared for the Plan, we are forecasting that the rate of decline in demand will gradually slow after There have been some large reductions in non-household demand in recent years but we believe that the levels reached towards the end of the planning period are approaching a long-term minimum. Figure 4.4 presents our forecasts of non-household demand for both the normal and Dry Year scenarios. Figure 4.4 Non Household Demand Forecast 26 NB: as a result, the WRP8 tables for the Revised Draft Plan will be completed using the Company s own sector headings rather than those specified by the EA. However, in broad terms the headings are very similar. Page 39

44 4.6. Distribution Input Normal year forecasts of Distribution Input 27 were derived by summing the Component forecasts described in the previous sections and adding forecast total leakage to produce forecasts for each of the 24 WRZ s for each year up to and including Dry year and Critical Period forecasts for the 24 WRZ s were derived by applying peaking factors to the Normal year forecasts to account for the expected increase in demand in whole dry years and during shorter (for example, one week) periods of increased demand (Critical Periods). Our peaking factors have been derived from analysis of demand data from 2002 to Since this is currently our most accurate period of demand data, any attempts to lengthen this record to match the longer hydrological records (typically from the early 1970 s) would introduce great uncertainty into the results. Analysis undertaken within the demand forecast report also confirmed that events used at zonal level were dry year events and have been selected accordingly depending upon the zone. As agreed with the Agency, this record will be improved as more data becomes available and/ or when a dry year event occurs which would trigger a re-assessment of demand. For example, during 2010 we experienced a significant prolonged period of dry weather. Analysis of this data and its impact on water demand will commence shortly. Further results and peaking factors for each zone and the analysis process are discussed in detail in our demand forecasting report 21. Figure 4.5 shows the historic and projected distribution input forecasts for the period to for both the normal and dry year forecasts. Tables 4.1 and 4.2 show the Dry and Critical Period forecasts for all 24 WRZ s for the years , , The values are actual Distribution Input values as reported in our 2009 June Return to Ofwat. 27 This is the volume of water, whether expressed on a zonal or company basis, that is delivered into supply, into the distribution network. Page 40

45 Figure 4.5 Distribution Input Forecasts Page 41

46 Zone No. Zone (Ml/d) (Ml/d) (Ml/d) (Ml/d) 8001 North Eryri/ Ynys Mon Clwyd Coastal Alwen/ Dee Bala Tywyn Aberdyfi Blaenau Ffestiniog Barmouth Lleyn/ Harlech Dyffryn Conwy South Meirionnydd Ross-on-Wye Elan/ Builth Hereford CU Area Llyswen Monmouth Pilleth Brecon/ Portis Vowchurch Whitbourne SEWCUS Tywi CU Area Mid & South Ceredigion North Ceredigion Pembrokeshire Region Table 4.1 Zonal Dry year Distribution Input Forecasts Page 42

47 Zone No. Zone (Ml/d) (Ml/d) (Ml/d) (Ml/d) 8001 North Eryri/ Ynys Mon Clwyd Coastal Alwen/ Dee Bala Tywyn Aberdyfi Blaenau Ffestiniog Barmouth Lleyn/ Harlech Dyffryn Conwy South Meirionnydd Ross-on-Wye Elan/ Builth Hereford CU Area Llyswen Monmouth Pilleth Brecon/ Portis Vowchurch Whitbourne SEWCUS Tywi CU Area Mid & South Ceredigion North Ceredigion Pembrokeshire Region Table 4.2 Zonal Critical Period Distribution Input Forecasts Page 43

48 4.7. Managing Demand Demand management plays a vital part in maintaining the security of water supplies, and can contribute significantly to ensuring that water is managed in the most sustainable and cost effective way. This section describes the ways in which we look to manage demand, including water efficiency strategy, leakage control, metering and tariff policies. Our baseline strategies for demand management are built into the demand projections presented above Water efficiency We have a duty to promote the efficient use of water by all our customers. To achieve this, we provide information to customers about: the sensible use of water in the home and garden; how to conduct a self-audit of household consumption; the availability of cistern and other water-saving devices; the availability of supply pipe leakage detection/ repair; how to report a leak; and how to get further information. Welsh Water launched its Water Efficiency Strategy in May 2007, building on an established water efficiency programme and ensuring alignment with the Welsh Government s Environment Strategy (Environmental Outcome number 14). We believe that there is a need to move public perception away from thinking that Wales will always have plenty of water and to encourage wiser and more efficient use of water. Our Water Efficiency Strategy sets out the activities and initiatives that are in place and planned to promote the efficient use of water. These include the provision of information to customers, as detailed above, and a comprehensive programme of educational activities. In addition, our strategy fully reflects the principles behind Ofwat s Water Efficiency Initiatives. 28 There are 10 good practice headings within the Register, and these are detailed below: cistern displacement devices; household water audits; commercial water audits; customer education/awareness; other water efficiency initiatives; metering; water butts/composters/trigger hoses; 28 Water Efficiency Initiatives Good Practice Register (Ofwat, 2007). Page 44

49 retrofitting toilets and showerheads; collaborative R&D (Research and Development); and supply pipe repair/replacement. A summary of our activities in each of these areas can be found in Annex Efficiency Targets We have been promoting the efficient use of water by our customers for a number of years. However, 2010 saw the introduction of mandatory targets by Ofwat and a notably more prescriptive approach to what the promotion of water efficiency should entail. We can choose to use water efficiency measures within our demand management strategy for a specific water resource zone as part of our overall planning approach to water resource management when the analysis indicates that it makes economic sense. If we use water efficiency measures as a solution to address supply/demand issues then Ofwat monitors our progress in delivering them by setting a Sustainable Economic Level of Water Efficiency target. We are also obliged, through the newly-introduced Ofwat targets, to deliver a saving of 1.31 Ml/d across the company in each reporting year. This is to be achieved through defined approaches to water efficiency and is described as our Base Service Water Efficiency target. 29 The Base Service Water Efficiency element of water efficiency is separated into two further categories relating to the mode of delivery, namely Hard and Soft option measures. Delivering Hard options Hard measures relate to the installation or distribution of water-saving equipment. Such equipment aims to reduce consumption by technological means. Under Ofwat s target mechanism hard measures are permitted to contribute up to 70% of the overall target, which for us equates to around 1 Ml/d of water saved. The reason for this high percentage is that the evidence underpinning technological measures for reducing water consumption is well-documented, and is regarded as relatively robust. To deliver these targets, we aim to deliver cost-beneficial savings across the entire customer base whilst building on the evidence we compile to demonstrate the effectiveness of water efficiency. During the first year of the target we have: provided water-saving welcome packs to customers opting for a water meter; undertaken a collaborative project with key stakeholders in Wales to understand the links between water and energy efficiency and social behavioural change where affordability is a key consideration; provided water efficiency audits for schools and installed water-saving devices; 29 Ofwat s PR09/20 paper (December 2008) sets out its position on water efficiency and has set companies two-part targets; base service water efficiency (BSWE) and the sustainable economic level of water efficiency (SELWE). The BSWE is the minimum activity Ofwat expects companies to undertake, whilst the SELWE is additional water efficiency activity above the base level. Page 45

50 provided water efficiency audits and equipment installations in public health care sector buildings, helping health authorities to manage their water footprint and reduce their costs; assisted business customers with water audits and made recommendations for managing water more efficiently, including help with the implementation of hard technological measures; assisted tertiary education providers in managing their water consumption in places where there is high demand, such as halls of residence; collaborated in a UK-wide promotion with a major retailer and energy provider for the distribution of free water-saving packs to customers; provided free Hippo bags to all customers on request; and provided a web-based water butt incentive scheme. Throughout the remainder of our current business plan period, we will continue to work to identify the most effective approaches to water efficiency promotion across our customer base. Linking soft and hard option measures It is widely recognised that technology alone cannot deliver the optimal water efficiency strategy and that other drivers of consumption such as behaviour, seasonality, culture and affordability influence the demand for water. We are committed to ensuring that technological measures are supported by soft approaches aimed at influencing individual or corporate use. Delivering soft options Soft option measures relate to the promotion of water efficiency through education or communication programmes. Historically this is the approach to water efficiency promotion we have tended to use. For example, during the recent spring droughts of 2010 and 2011 we moved quickly to reinforce the message for customers to use water wisely through press releases, website updates, and so forth. Within the mandatory targets, soft options can contribute the remaining 30% of the target. The lower percentage recognises that the evidence of the effect that educational or communication campaigns have on consumption is somewhat limited. Overall, our education programme currently contributes around 90% of the 0.3 Ml/d annual reduction required under the soft component of the mandatory target. We believe that this focus on education is the most sustainable and cost-beneficial approach to the promotion of water efficiency Delivering our Water Efficiency Strategy We have set up a Water Efficiency Working Group to deliver water efficiency projects: it is normally held on a monthly basis. We acknowledge the Ofwat mandatory target approach and, in accordance with the legislative requirements in Wales, have consulted (in February 2009) with the Welsh Government as to how our strategy for the promotion of water efficiency in Wales should be aligned with its overall sustainability objectives. It is our intention to maintain and to further the approach of promoting water efficiency through communication and education in line with our current strategy whilst developing and expanding other activities to ensure the year-on-year target reduction of 1.31 Ml/d continues to be achieved. Where Page 46

51 necessary, our strategy will be revised in the future in line with any new guidance issued by the Welsh Government in relation to its sustainability objectives Leakage Strategy With more than 27,000km of pipelines and more than 1 million customer connections on our network, leakage is inevitable. It is critical for a water company to know how much water is leaking from its assets and to have good operational knowledge of where that leakage is occurring. We have an aged network, with many pipes over 100 years old. Fresh leaks are continually breaking out; we require sustained leak detection and repair procedure simply to maintain leakage at current levels. A substantial quantity of leakage is classified as background leakage, the aggregation of losses from all the fittings on the network. These leaks are generally small and difficult to find, and would usually be expensive to repair given the modest quantity of water saved. We are committed to meeting our leakage targets and have reduced total leakage from 329 Ml/d in to 190 Ml/d in , a reduction of 42% in 8 years. Detection, repair and optimisation of leakage solutions are an integral part of the Environment Agency s Guidelines, primarily as a way of reducing demand. The Guidelines state that we should: demonstrate how the company s leakage appraisal is built from data on District Meter Area source leakage and cost information to produce WRZ assessments of the Economic Level of Leakage30 and thereby an overall leakage strategy at the company level; detail the company s current leakage policies that are built into the baseline demand forecast; and not rely on a single assessment of ELL projected across the planning period. Economic Level of Leakage The Economic Level of Leakage can be broken down into Short Run Economic Level of Leakage or Long Run Economic Level of Leakage, depending on which planning horizon is chosen. Short Run Economic Level of Leakage is the leakage target to be achieved in the short term i.e. 5 years or so, based on current leakage levels. The Short Run Economic Level of Leakage is updated in each five yearly Periodic Review of water price limits to account for, for example, efficiency savings in the previous 5 years. Our Short Run Economic Level of Leakage only includes current active leakage policy activities and provides baseline leakage levels used in the demand forecasts across the planning period. For WRZs identified as being in surplus, Short Run Economic Level of Leakage and Long Run Economic Level of Leakage values are equal. However, for deficit WRZs, the least cost planning process identifies the least cost scheme(s) to meet the deficit. Such schemes may include further reductions in leakage to levels below the Short Run Economic Level of Leakage, using more intensive leakage control techniques or policies. If that occurs, the resulting leakage level in the zone is then the Long Run Economic Level of Leakage and attainment of this target will require leakage reductions below the Short Run Economic Level of Leakage either during or following the initial 5 year period. 30 ELL is determined as the point where the incremental benefit of additional leakage control is just offset by the incremental cost of carrying it out i.e. it is not cost beneficial to undertake further leakage control as the cost of undertaking the work is greater than the equivalent cost of the lost water (that can be supplied from the other sources). Page 47

52 In accordance with Ofwat guidance (Ofwat, 2008), the Economic Level of Leakage should now correctly be referred to as the Sustainable Economic Level of Leakage in recognition of the fact that the methodology should take account of the environmental, social and carbon-related costs and benefits of leakage control, not just the water company s private costs and benefits. Since 2007 our methodology for calculating Economic Level of Leakage has taken full account of these external costs, and is therefore consistent with sustainable Economic Level of Leakage. The Economic Level of Leakage targets for the whole company and by WRZ are shown in Table 4.2. Zone Whole Welsh Water supply area (Ml/d) (Ml/d) (Ml/d) (Ml/d) (Ml/d) North Eryri/ Ynys Mon Clwyd Coastal Alwen/ Dee Bala Tywyn Aberdyfi Blaenau Ffestiniog Barmouth Lleyn/ Harlech Dyffryn Conwy South Meirionnydd Ross-on-Wye Elan/ Builth Hereford CU Area Llyswen Monmouth Pilleth Brecon/ Portis Vowchurch Whitbourne SEWCUS Tywi CU Area Mid & South Ceredigion North Ceredigion Pembrokeshire Table ELL targets by WRZ for AMP 5 Page 48

53 Current Leakage Policy Our current baseline leakage policy complies with industry best practice. It follows the approach to leakage optimisation outlined by the Department for Environment, Food and Rural Affairs, Ofwat and the Environment Agency in 2002, 31 supplemented by various reports published by Ofwat as part of detailed reviews of certain aspects of the optimisation methodology (Ofwat, 2007) as well as its work on sustainable Economic Level of Leakage, as referred to above. The Tripartite study identified two principal methods of modelling leakage management costs: the BABE approach (based on the use of a theoretical model identifying optimal intervention frequencies); and the MELT approach, which uses empirical information on leakage savings and costs to determine directly both the natural rate of rise in leakage32 and the marginal costs of leakage control. Both methods are considered valid and during 2007 we switched from the use of the BABE methodology to the MELT approach, using our Sustainable Achievable Leakage Targets model. The methodologies embedded within Sustainable Achievable Leakage Targets are in line with industry best practice. Full details can be found in the supporting report. 33 District Meter Area coverage Our current leakage strategy is implemented across the whole of our distribution network, which is divided into 916 District Meter Areas. The flows into and out of the District Meter Areas are permanently monitored, recorded and quality-controlled. In addition, service reservoir seepage and trunk main losses are monitored, reported and quality-controlled at the WRZ level. Information systems and databases The flows into and out of all our District Meter Areas are permanently monitored and recorded, with raw data transferred on a daily basis to our database system, LIBRA (Leakage Identification, Balancing, Reporting and Abstraction). The data is then transferred into our bespoke Leakage Monitoring and Reporting Software. This software is used for quality control, targeting/ranking and reporting leakage. The system produces reports on a monthly basis, at District Meter Area, operational area, WRZ and company level. In addition to flow data, the information contained in daily activity sheets and DMA information packs are now entered into our bespoke Leakage Monitoring and Reporting Software, enabling zone specific leakage/ cost assessments and benchmarking of efficiency and costs to be carried out. 31 Best Practice Principles in the Economic Level of Leakage Calculation : report commissioned by the Tripartite Group consisting of Defra, the Environment Agency, and Ofwat. 32 The natural rate of rise (NRR) in leakage may be thought of as the continuing increase in leakage that would occur in the absence of any leak repairs. It is made up of two components the breakout of new leaks in the network plus the growth (increase in volume) of existing leaks. Of this total NRR, a proportion will comprise visible (customer-reported) leaks, which will be duly repaired. 33 Determining the Short Run Economic Level of Leakage for AMP 5 : RPS, Page 49

54 Pressure Management Background leakage levels can be controlled by managing the pressure in the network. We have undertaken considerable pressure management activity in recent years, and continue to sustain savings by maintaining the status quo in areas where pressure is well-managed while working to identify circumstances where further pressure management opportunities may exist. New Property Forecasts Property numbers within our area are projected to grow by an average of 0.65% per year over the planning period. As a consequence there will be an expansion of the distribution network, which will mean a corresponding increase in leakage. Baseline Leakage The initial Short Run Economic Level of Leakage value we derived from the optimisation process was Ml/d. Analysis of zonal level values indicated lower levels, relative to current leakage, in 12 of the 24 WRZs. We then used these preliminary values in our demand forecast and thereby identified which WRZs were expected to go into deficit during the plan period. It is inevitable that the revised leakage targets for will involve higher leakage levels in some WRZs and lower levels in others, relative to the current position. However, in line with recent regulatory guidance, for the two deficit WRZs where Sustainable Achievable Leakage Targets indicated that rising leakage profiles would be appropriate, the Short Run Economic Level of Leakage values have been constrained at the current zonal levels of leakage (in l/prop/d). These constraints result in a reduction in the company level value by 0.81 Ml/d, producing a final Short Run Economic Level of Leakage for of Ml/d (including trunk mains and service reservoir leakage). This value is 1.9 Ml/d higher than the figure calculated for the 2008 Draft Plan (182.2 Ml/d). 34 Future planned leakage reductions Enhanced leakage reduction is a critical component of our Plan to maintain the supply demand balance and reduce our CO 2 emissions. For deficit WRZs, Sustainable Achievable Leakage Targets was not used to determine the cost of leakage intervention schemes. This is because Sustainable Achievable Leakage Targets utilises the current leakage policy costs that are consistent with short run Economic Level of Leakage and not the costs of adopting more intensive leakage control technologies that might be cost effective in contributing to deficit reductions. An alternative methodology was used to derive the private and external costs of three alternative and successively more intensive leakage control policies. These policies are: reductions in detected leak run times this option essentially increases the amount of leakage detection resource made available; location, operating and sounding of all fittings - this option targets previously undetected leakage from all fittings, not just those that are visible without excavation; and 34 Note: out-turn leakage in was 199 Ml/d, higher than our leakage target of 190 Ml/d. This was the result of exceptional weather conditions, notably the extreme freeze-thaw period in December 2010, and is expected to be recovered well in time for our end-amp5 target of 184 Ml/d in 2014/15. Page 50

55 installation of permanent correlator noise loggers this option helps leakage teams detect leaks quicker and to identify leaks that are not usually detected through conventional means. Details on how we assessed whether or not these policies were the best way to address supply demand deficits are contained in Chapter 9. The company and resource zone total leakage figures at 5-yearly time steps throughout the whole planning period are shown in Table 4.4 below. Water Resource Zone NEYM Clwyd Coastal Alwen Dee Bala Tywyn Aberdyfi Blaenau Ffestiniog Barmouth Lleyn Harlech Dyffryn Conwy South Meirionydd Tywi CU Mid and South Ceredigion North Ceredigion Pembrokeshire Ross-om-Wye Elan Builth Hereford Llyswen Brecon Portis Monmouth Pilleth Vowchurch Whitbourne SEWCUS Company Total Table 4.4 Company and water resource zone total leakage figures (taken from planning table WRP4-FP) Metering As noted above in section 4.1, we estimate that the average per capita consumption for metered households in the base year was 124 l/h/d compared with 160 l/h/d for non-metered households. At present around 31% of our households are metered. Our demand forecasts assume that this proportion will continue to rise in line with current trends, which would increase meter penetration to 70% by This is a significant continuing rate of uptake and we will monitor it closely through Page 51

56 annual reviews and our water resource planning process. During our current investment programme ( ) we will be spending around 30 Million on metering (about 50% on installing meters for new meter optants and 50% on maintenance of the total meter stock currently around 370,000 household meters). We have considered the policy option of metering upon change of occupancy as a potential means to address supply demand deficits but this is not demonstrated to be cost-effective when compared against other options Tariffs Although we believe that some households reduce their consumption at the point when they switch from the unmeasured to a measured tariff, the evidence suggests that on average measured household demand in Wales is fairly unresponsive to changes in marginal price signals once a customer is metered. Several years of optant demand data has shown us that post-switching optant demand moves in line with other customer demand. In other words, demand appears to be fairly price inelastic, once a customer is metered. Accordingly, we concentrate our demand management efforts on seeking to influence behaviours through our water efficiency promotion activities, and at present we do not regard alternative measured tariff structures as a potent tool to achieve supply demand objectives. We continue to review evidence as it emerges, however, and retain an open mind towards the possibility of applying different tariff structures in the future. Meanwhile, to maintain a strong price signal we continue to ensure the volumetric rate for our metered tariffs is greater than our actual variable costs. Page 52

57 5. Target Headroom Headroom is the difference between supply and demand: Target Headroom is one of the most important features of water resource planning and is defined as the minimum planning margin or buffer that a water company should allow between supply and demand to cater for specified uncertainties 35 in the overall supply demand balance (UKWIR, 2002). These uncertainties include political, social, environmental and technical factors outside of a water company s control that could significantly influence components of the supply demand balance. Examples include changes to legislation, revisions to government political priorities, promotion of economic development in specific areas, changes in planning methodologies, and so forth Calculating Target Headroom We have assessed Target Headroom in accordance with the approach recommended by the Environment Agency Guideline, as set out in A Re-Evaluation of the Methodology for Assessing Headroom (UKWIR, 2002). Target Headroom is calculated by looking at the probability of uncertain events in a similar way to the analysis of allowances for Outage. While the evaluation of Outage entails examination of potential disruptions of short duration, the assessment of Target Headroom involves consideration of events and uncertainties of potentially longer duration. In line with the UKWIR methodology, Target Headroom is analysed in terms of nine supply components and four demand components, viz: S1 S2 S3 S4 S5 S6 S8 S9 D1 D2 D3 D4 Vulnerable surface water licences Vulnerable groundwater licences Time-limited licences Bulk imports Gradual pollution causing a reduction in abstraction Accuracy of supply-side data Uncertainty of impact of climate change on source yield Uncertain output from new resource developments Accuracy of sub-component data Demand forecast variation Uncertainty of impact of climate change on demand Uncertain outcome from demand management measures 35 Except for those relating to Outages, which are treated as part of Deployable Output, as set out in chapter 3 above. Page 53

58 Of the above categories, the uncertainty surrounding the effects of climate change on supply/demand forecasting is especially significant in the preparation of this Plan, and is analysed in detail in Chapter 7 below Risk Profile The Environment Agency Guideline recommends that an appropriate risk profile is applied to the assessment of Target Headroom, and we have carefully considered how we should approach this for the purposes of planning. On the one hand it would not be appropriate to allow for all possible uncertainties in Target Headroom, because this would be overly cautious (and very expensive). On the other hand, it could be argued that it would not be correct to look only at the probability-weighted expected value of the uncertainties, i.e the 50 percentile or central projection, because there is an asymmetry between the value of having too much water and too little water. We have therefore examined uncertainty from more than one perspective on risk. Further details are set out in chapter 7. After due consideration and analysis, we have chosen to adopt a fixed Risk Profile across the planning period at the 95% confidence level. Target Headroom has been calculated for all 24 WRZs at zonal level 36 for both the Annual Average and the Critical Period scenarios Baseline and Final Planning The calculation of Target Headroom is part of the process of iteration that characterises the planning process. Initially, Baseline Target Headroom Is calculated for each WRZ and applied to the derivation of the baseline supply demand balance. If a WRZ is identified as having a supply deficit options are selected to resolve the deficit. Since implementation of these solutions will also bring uncertainties Target Headroom is then re-calculated and the process repeated until supply demand balance is achieved. Thus, Final Planning Target Headroom is included as part of the Final Planning supply demand balance, in which the supply deficit is fully resolved Work carried out since the 2008 Draft Plan Following the 2008 Draft Plan, in preparation for the submission to Ofwat of Welsh Water s Final Business Plan for , we undertook a detailed review of our headroom assessments. The main areas of this work were: a full review of the headroom allowances used in the Tywyn Aberdyfi WRZ; a complete review of climate change uncertainty, including a full audit of our work and the results of our analysis, a comparison of different methodologies for taking climate change into account including an assessment of all of the approaches put forward by the Environment Agency (see chapter 7 below); a review of inflow uncertainty. This has resulted in a change in one zone, Tywyn Aberdyfi, where we had allowed for uncertainty of inflows on both the Afon Fathew and the Nant Braich 36 Headroom Analysis (Entec, 2010); 2010 Review of Consents Assessment in SEWCUS Water Resources Zone, Final Report (Entec, March 2011); 2010 Review of Consents Assessment in Pembrokeshire Water Resources Zone, Final Report (Entec, January 2011); Revised Target Headroom Modelling for NEYM (Entec, December 2010); Revised Target Headroom Modelling for Brecon Portis Water Resources Zone (Entec, March 2011), NEYM DO summary (Welsh Water, 2010). Page 54

59 y Rhiw, whereas in fact they operate under an aggregated licence which means that if inflows are lower in one, abstraction from the other can be increased.; a complete re-assessment of the headroom uncertainty on demand; and Final Planning Target Headroom was derived through a process of iteration for the three zones presented as being in deficit in the Final Business Plan Tywyn Aberdyfi, South Meirionnydd and Vowchurch. Full details of this work can be found in the associated report. 37 For this Plan, baseline Target Headroom has been updated for all WRZs to account for the updated demand forecast and the inclusion of the impacts of the UK climate change forecasts published in 2009 (UKCP09) and the outcomes of the Environment Agency s review of our licences. Full details are set out in the associated reports. 38 Table 5.1 shows the greatest sources of uncertainty for each of Welsh Water s water resource zones, in terms of a supply side or a demand side headroom component, as identified in the baseline headroom uncertainty assessments carried out to determine target headroom. Sensitivity charts illustrating the contribution of each individual headroom component to the overall headroom uncertainty assessment are shown in Annex Further Headroom Analysis Summary of Headroom Components post dwrmp : Entec Review of Consent Supply Assessments in SEWCUS Water Resources Zone, Final Report Entec, Jan Review of Consent Supply Assessments in Pembrokeshire Water Resources Zone, Final Report : Entec, Jan Headroom Analysis (Entec, 2010); 2010 Review of Consents Assessment in SEWCUS Water Resources Zone, Final Report (Entec, March 2011); 2010 Review of Consents Assessment in Pembrokeshire Water Resources Zone, Final Report (Entec, January 2011); Revised Target Headroom Modelling for NEYM (Entec, December 2010); Revised Target Headroom Modelling for Brecon Portis Water Resources Zone (Entec, March 2011), NEYM DO summary (Welsh Water, 2010). Page 55

60 Water Resource Zone Annual Average Critical Period Annual Average Critical Period Annual Average Critical Period Annual Average Critical Period Annual Average Critical Period NEYM D1 D1 D1 D1 D1 D1 D1 D1 D1 D1 Clwyd Coastal S6 S6 S6 S6 S6 S6 D2a D2a D2a D2a Alwen Dee S6 S6 S6 S6 S6 S6 D2a D2a D2a D2a Bala S6 S6 S6 S6 S6 S6 S6 S6 S6 S6 Tywyn Aberdyfi S6 S6 S6 S6 S6 S6 S6 S6 S6 S6 Blaenau S6 S6 S6 S6 S6 S6 S6 S6 S6 S6 Ffestiniog Barmouth S6 S6 S6 S6 S6 S6 D2a D2a D2a D2a Lleyn Harlech S6 S6 S6 S6 S6 S6 S6 S6 S6 D2a Dyffryn Conwy D3 S6 D3 S6 D3 S6 D3 S6 D3 S6 South Meirionydd S6 S6 S6 S6 S6 D2a D2a D2a D2a D2a Tywi CU D1 S6 D1 S6 D2a S6 D2a D2a D2a D2a Mid and South S6 S6 S6 S6 S6 S6 S6 S6 S6 S6 Ceredigion North Ceredigion S6 S6 S6 S6 D2a D2a D2a D2a D2a D2a Pembrokeshire S6 S6 S6 S6 S6 S6 S6 S6 S6 S6 (Baseline) Pembreokeshire S6 S6 S6 S6 S6 S6 S6 D2a D2a D2a (RoC) Ross S6 S6 S6 S6 S6 S6 S6 S6 S6 S6 Elan Builth S6 S6 S6 S6 S6 D2a S6 D2a D2a D2a Hereford S6 S6 S6 S6 S6 S6 S6 S6 S6 D2a Llyswen S6 S6 S6 S6 S6 S6 S6 S6 S6 S6 Brecon Portis S6 S6 S6 S6 S6 D2a D2a D2a D2a D2a (Baseline) Brecon Portis S6 S6 S6 S6 S6 S6 S6 S6 S6 & D2a D2a (RoC) Monmouth S6 S6 S6 S6 S6 S6 S6 S6 S6 S6 Pilleth S6 S6 S6 S6 S6 S6 S6 S6 S6 S6 Vowchurch S6 S6 S6 S6 S6 S6 S6 S6 S6 S6 Whitbourne S6 S6 S6 S6 S6 S6 S6 S6 S6 S6 SEWCUS D1 D1 S6 S6 D2a D2a D2a D2a D2a D2a (Baseline) SEWCUS (RoC) D1 D1 D1 D1 D2a D2a D2a D2a D2a D2a Table 5.1 The greatest sources of headroom uncertainty in each water resource zone across the planning period. Table Key: S6 - Accuracy of supply-side data D1 - Accuracy of sub-component data D2a - Demand forecast variation Page 56

61 6. The Habitats Directive and the Impact on Water Abstractions The European Habitats Directive will have a significant influence on our water resource management plans for the next 25 years. This chapter describes the Directive, how it operates through the Review of Consents process, and the practical implications that this has for our long term strategy for meeting our water supply obligations The Habitats Directive The Directive was brought into Welsh law through regulations 39 that provide for the designation of European sites (Natura 2000 sites); afford protection of European protected species ; provide for the adaptation of planning and other controls for the protection of such sites; and impose a statutory requirement to deliver improvement schemes. Under the Regulations, competent authorities i.e. any Minister, government department, statutory authority, public body, or person holding public office, have a general duty, in the exercise of any of their functions, to have regard to the EU Habitats Directive. As the designated competent authority for England and Wales the Environment Agency is required to ensure that its permissions i.e abstraction licences and discharge consents and its operations have no adverse effect on the integrity of the Special Areas of Conservation (SAC) and Special Protection Areas (SPA) that form part of the pan-european network of Natura 2000 sites. As a competent authority ourselves, we must have regard to the requirements of the Habitats Directive so far as they may be affected by the exercise of our functions Review of Consents (and Restoring Sustainable Abstraction programme) The Review of Consents process is the mechanism by which the Environment Agency reviews of all the existing and proposed permissions it has issued that could impact upon EU designated Natura 2000 sites. The process falls under the umbrella of the Environment Agency s Restoring Sustainable Abstraction programme. This programme was set up by the Environment Agency in 1999 to identify sites that may be adversely impacted by the effects of abstraction, and is ongoing. It has proved complex in Wales because of the nature of the environment in which we operate; there are, for example, over 90 European Special Areas of Conservation and more than 1,000 Sites of Special Scientific Interest (SSSI). Sustainability reductions is the term given to amendments made by the Environment Agency to existing permissions in order that it can be demonstrated that the permission does not have an adverse impact on a Habitats Directive site. 39 The EEC Directive 92/43/EEC (21st May 1992) on the conservation of natural habitats, wild fauna and flora was incorporated into the UK regulatory system under the Conservation (Natural Habitats, &c.) Regulations These regulations came into force on 30 October 1994 and were subsequently amended in 1997 and (in England only) They have since been amended by the Habitats Regulations Page 57

62 The abstractions affected are shown on Figures 6.1, 6.2 and 6.3: further detail is presented in Annex 3. Figure Welsh Water s abstractions in South East Wales subject to the review of consents process Page 58

63 Figure Welsh Water s abstractions in South West Wales subject to the review of consents process Figure Welsh Water s abstractions in North Wales subject to the review of consents process In general terms Habitats Regulations oblige the Environment Agency to review all of its environmental permissions, in this case abstraction licences, to ensure that they have no adverse impact on Special Areas of Conservation. The process is undertaken in four stages: Stage Assessment This stage identifies all relevant (Environment Agency) permissions that could impact upon the Special Area of Conservation Permissions are then subject to a generic assessment to determine if a likely significant impact exists upon the integrity of the designated site, either alone or in combination with other permissions. If deemed likely, or the Environment Agency are unsure, they move on to Stage 3. A more detailed assessment of each permission is carried forward from Stage 2 to determine whether it can be shown to have no adverse effect upon the integrity of the site in question, either on its own or in combination with other permissions. If at Stage 3 a permission has been assessed as having no adverse affect then it will be affirmed at Stage 4 and no modifications to it will be required. If, however, a conclusion of no adverse affect could not be reached, then the permission will be subject to options appraisal to determine the best way to resolve the issues. Page 59

64 The consents review process for water resources has been ongoing in Wales since During this period we have worked closely with the Environment Agency to try and understand the issues at each site and how they can best be resolved. Stages 3 and 4, as they relate to our abstractions, are described in greater detail below Stage 3 The assessment has been based upon the Resource Assessment Methodology used in the Environment Agency s Catchment Abstraction Management Strategy process. Under this methodology a generic environmental river flow objective is applied at key sites along the river that allows for small deviations from the estimated natural flow, taking into account the effects of all the permissions. For the rivers under investigation that have been designated as Special Areas of Conservation under the Habitats Directive, flows are generally only allowed to deviate below natural flows by a maximum of 10% from Q1 to Q95 40 and only 5% thereafter. This process is referred to in the methodology as the Habitats Directive Environmental River Flow objective. 41 This means, for example, that if the natural flow at Q95 is 10 Ml/d the permitted deviation is only 5% of 10 Ml/d i.e. 0.5 Ml/d and so the Environmental River Flow objective, i.e. the flow to be preserved at all times, would be 9.5 Ml/d. Where more localised information on the flow requirements of designated species has been available, for example on the River Usk Special Area of Conservation, the Habitats Directive Environmental River Flow has been adjusted accordingly. This process is illustrated in Figure 6.4, which shows that: the Environment Agencydetermine the Benchmark Flow i.e. the natural flow of the river this is the red line on the diagram; the Environment Agencyand the Countryside Council for Wales determine the Benchmark Habitats Directive Ecological River Flow objective as the protective flow requirement for Special Area of Conservation rivers this is typically 10% below the benchmark flow the yellow line; the Environment Agency then assesses the fully licensed scenario licences operating at 100% - and this is shown as the dark blue line labelled Max licensed scenario flows ; and the dark blue line lies below the yellow line from about the 65%ile of river flow onwards towards the lower flows. As a consequence, the abstractions from this point would have to be reduced to move the dark blue line above the yellow line. The Stage 3 appropriate assessments have focused on two licensing scenarios for each of the Special Areas of Conservation a recent actual scenario that reflects how we have actually been operating our abstractions over the past 35 years ( ) and a full licence utilisation 40 The term Q95 is often used to mean the 95 percentile flow statistic. This is the flow that is equalled or exceeded for 95% of the time, based on the length of the record used to calculate the statistic. It is typically calculated from daily mean flow values. In hydrology/ water resources it is a well understood and used low flow measure as, on average, only 5% of flows are lower in value. Conversely, Q1 represents a high flow value as 99% of flows are lower in value, or alternatively, only 1% of flows are higher in value. 41 Habitats Directive Ecological River Flow Duration Curve (HD ERF) is the flow regime suggested for Special Areas of Conservation rivers based on the findings of an Environment Agency Research and Development Report An Appraisal of the Value of the EW System for assessing impacts on HD Interest Features. Page 60

65 scenario which represents an extreme worst case scenario under which the maximum licensed volumes are abstracted all year round. Figure 6.4 Application of the Review of Consents process Lake Special Areas of Conservation As with the riverine Special Areas of Conservation, the Environment Agency has assessed our operations in relation to Lake Special Areas of Conservation under both maximum licensed and recent actual scenarios. The impact upon lake levels of our abstraction under these two scenarios has been calculated, but unlike in the case of the riverine Special Areas of Conservation, no Habitats Directive limit of deviation has been set. The assessment has instead focused on the extent to which there is an increase in the marginal area exposed as a consequence of abstraction drawing down the levels in the lake. Where it has been shown that the drawdown rates cause a significant increase in the area of marginal habitat exposed, which could negatively impact upon the designated species, the conclusion has been drawn that no adverse impact cannot be demonstrated and so the relevant abstraction licences have progressed to Stage 4. There are some specific features of the Review of Consents process that are worth noting: 1. The Habitats Directive does not require it to be demonstrated that abstractions are actually having a detrimental impact for a permission to be curtailed or modified. Rather, it requires a demonstration that there is no impact for the permission to be unchanged. Thus, if no Page 61

66 impact cannot be proven, the precautionary principle applies, 42 and the permission may be modified. 2. The process focuses upon a hypothetical scenario where all abstraction licences are being operated at their theoretical maximum, a position which has never been achieved in practice. 3. Review of Consents looks at risk of adverse impact, as well as actual impact. Table 6.1 presents the results for 20 sites of the Environment Agency s Stage 3 assessments as to whether there is either an actual (current) impact, or a perceived modelled (future) risk were we to abstract at the maximum licensed rates. As noted above, the simulation of the maximum abstraction scenario is entirely theoretical as we have never needed to abstract 100% of our daily licensed limit at all the sites along these rivers, and it is very unlikely that we would ever need to in the future. This is borne out by the results presented in the table, which shows that at all sites, the only impacts from our abstractions are in the modelled risk category. In other words, under the recent actual scenarios no perceived risk of adverse impact has been identified. 42 Under the precautionary principle, if there are reasonable grounds for suspecting that environmental harm may occur, protection measures should not be delayed pending scientific proof. Page 62

67 In Combination Alone In Combination Alone Site Name Adverse effect on site integrity can be shown No adverse effect on site integrity cannot be shown Impact (I) or a Risk (R) if cannot conclude there is no impact Impact type: Actual (A) Modelled (M) Or Suspected (S) Wye at Broomy Hill R M Wye at Monmouth (Mayhill) R M Wye at Monmouth (Wye Transfer) R M Lugg at Byton R M Pilleth boreholes R M Dunfield boreholes R M Midsummer Meadow well R M Usk at Llantrisant R M Usk at Rhadyr (Prioress Mill) R M Usk at Brecon/Brecon boreholes R M Tywi at Manorafan R M Tywi at Nantgaredig R M Llyn Brianne reservoir R M Teifi at Llechryd R M Eastern Cleddau at Pont Hywel Eastern Cleddau at Canaston R M R M Western Cleddau at Crowhill R M Llyn Eiddew Mawr R M Llyn Morwynion R M Llwyn Isaf borehole R M Table 6.1 Outcome of Stage 3 Assessments Stage 4 At Stage 4 of the consents review process the Environment Agency then specifies a series of Environmental Outcomes as illustrated in Table 6.2 below. Page 63

68 Environmental Outcome Env1 Env2 Env3 Objective To ensure adequate flow throughout the Special Area of Conservation To ensure flow variability (which can be achieved, for example, by removing diurnal pumping practices) To ensure frequency and magnitude of spate flows. The Environment Agency has assumed that if Env1 is achieved then by default so will Env3 Env4 To prevent entrainment and impingement Table 6.2 Specified Environmental Outcomes at Stage 4 There is also an assessment of other potential impacts, such as those that relate to entrainment, temperature, fish passage, water level and variability of flow, some of which are described later in this section, which go together to produce an overall picture of the potential impacts of our activities upon the Special Areas of Conservation. The outcomes are shown in Table 6.3. In general terms, the major impact upon existing abstraction licences is a reduction in volumes that can be abstracted during periods of low flow so as to retain a (theoretical) naturalised flow within the river (Environmental Outcome 1). The impact of Environmental Outcome 2 - The removal of diurnal pumping (taking water at night to save on pumping costs) - has a small impact upon the volume of water we can take, but mostly impacts on operating costs. The prevention of entrainment and impingement has no direct impact on water resources, but does impact upon the utility of our abstraction assets. This is described further below. Page 64

69 Licence Flow, Env 1 Variability, Env 2 Spate, Env 3 Entrainment, Env 4 Temperature Level Barrier River Wye at Broomy Hill River Wye at Monmouth (Wye Transfer) River Wye at Monmouth (Mayhill) River Wye at Builth Wells River Wye at Llyswen Vowchurch boreholes Alton Court boreholes Buckholt spring Rogerstone Grange borehole River Lugg at Byton Pilleth Boreholes Dunfield Boreholes Midsummer Meadow River Usk at Llantrisant River Usk at Brecon Brecon Boreholes River Usk at Rhadyr (Prioress Mill) River Lugg at Byton Pilleth Boreholes Eastern Cleddau at Pont Hywel Western Cleddau at Crowhill Eastern Cleddau at Canaston Afon Teifi at Llechryd Afon Tywi at Nantgaredig Afon Tywi at Manorafon Llyn Brianne Llyn Cwellyn Afon Gwyrfai at Nant Mills Llyn Eiddew Mawr Llyn Morwynion Llwyn Isaf borehole Table 6.3 Environmental Outcomes Page 65

70 6.3. The impact of Review of Consents upon Resources Following the completion of Stage 4 of the consents review process, we have modelled the Environment Agency s proposed licence amendments to assess the impacts upon Deployable Output. Overall, the reductions amount to an approximate Deployable Output loss of 116 Ml/d across South Wales. However, by changing the way we operate our licences in the Pembrokeshire WRZ this impact is reduced to 92 Ml/d. Across North Wales we are not forecasting any loss of Deployable Output in the affected WRZs as a result of the Environment Agency s proposed licence changes The South East Wales Conjunctive Use System (SEWCUS) WRZ Since 2007, we have worked with the Environment Agency to develop a series of licence amendment options for the Rivers Wye and Usk to achieve the desired environmental outcomes. This Plan is based on the latest options set out in the technical notes issued by the Environment Agency in September 2010 Wye Option W and Usk Option U We have prepared a report 45 that provides full details of the modelling work we have carried out to assess the impacts upon Deployable Output of the final outcomes of the Agency s review of our related consents. Within the SEWCUS WRZ, the baseline Dry Year Deployable Output is 476 Ml/d. Implementation of the licence amendments reduces our Dry Year Deployable Output to 401 Ml/d, a loss of 75 Ml/d. This drop in supply capacity is driven by the significant reductions in our Wye and Usk licences, as well as the increase in releases we have to make from the Elan Valley reservoirs to augment flows in the Wye so as to enable abstraction at Monmouth to be maintained. As a consequence of these changes, our overall supply/demand position in SEWCUS is projected to move from a healthy excess of supply capacity over demand to a much smaller surplus. Further, it should be noted that we have assumed, for the purposes of this Plan, that the licence amendments are not formally put in place until 2020, although in fact the sustainability reductions would not put the zone into deficit straight away, but leave a small planning surplus for the time being according to current modelling. The size of the reductions is so dramatic that we consider that it would be prudent to carry out further detailed work on the way that the zone is operated in order to ensure that it is fully robust to such radical changes. Our over-riding priority is to safeguard the security of public water supplies, and the complexity of the zone is such that more extensive analysis is required before we can be fully confident that the major changes envisaged can be accommodated in all circumstances. In particular, whilst SEWCUS is regarded as one zone for planning purposes, it is not fully integrated in the sense that not every customer can theoretically be served by each source. As such, the presence of effective bottlenecks raise the question of whether it should be modelled as two (or more) inter-connected zones, rather than one. We intend to explore this issue carefully, and if there is a valid alternative way of analysing the zone we will wish to ensure that what appears to be a small planning surplus overall does not conceal the fact that there would be local areas that would be in deficit Brecon-Portis WRZ The impact of the consent review process on Deployable Output in our Brecon-Portis WRZ has been calculated as a reduction of approximately 2.5 Ml/d. 43 Technical Note: Wye Option W382, EAW, September Technical Note: Usk Option U588 & U591b, EAW, November Review of Consent Supply Assessments in SEWCUS Water Resources Zone, Final Report Entec, Jan Page 66

71 6.3.3 Pembrokeshire WRZ Since 2008 we have undertaken modelling of our Pembrokeshire WRZ to understand fully the impacts of the Environment Agency modifications to our abstraction licences on the Eastern and Western Cleddau Rivers. The Environment Agency has not modelled the impacts themselves but have fully audited our model and have indicated that they are satisfied with the results. The current baseline Dry Year Deployable Output for Pembrokeshire is Ml/d and Ml/d for the Critical Period. We have prepared a report 46 that details our modelling work and the impact of the consent review process on Deployable Output in Pembrokeshire. The impact of the Environment Agency s proposed changes to licences in Pembrokeshire is a net reduction in annual average Deployable Output from 79.1 Ml/d to 64.8 Ml/d and in critical period Deployable Output from Ml/d to 81.9 Ml/d. Note that these results are after we have mitigated the effect of the impacts of the consent review by changing the way we operate the zone: these changes, which are described in the supporting report, have not hitherto been implemented because, but for the effects of the consent review process, it would not have made economic sense to do so. The consequence of the proposed licence amendments at our Pont Hywel intake on the Eastern Cleddau is that our abstraction would be restricted to less than 1 Ml/d, on average, during the summer months, compared with the present situation in which we can abstract an average of 10 Ml/d. This means that Preseli reservoir storage could not be sustained through the summer, which in turn means that Preseli Water Treatment Works could not be operated at normal levels throughout the summer, and so the Deployable Output of the Pembrokeshire WRZ would be greatly reduced, albeit that this would then be partially mitigated by greater use of the Llysyfran to Preseli Water Treatment Works transfer. Note that, as for the South East Wales Conjunctive Use System zone, we have assumed that the proposed abstraction licence reductions are not implemented before This is because of the considerable lead time necessary to implement the solutions (see chapter 9 below) Review of Consent Supply Assessments in Pembrokeshire Water Resources Zone, Final Report : Entec, Jan Page 67

72 7. Uncertainty Regarding the Effects of Climate Change Climate change is expected to have a significant impact on both water supply and demand in the future. Our plan incorporates the latest climate scenarios, UK Climate Projections 2009 (UKCP09), 47 and looks at the potential impact of these scenarios on supply and demand. Overall we are projecting a reduction in Deployable Output in a number of WRZs as a consequence of climate change, increasing the likelihood of water supply deficits. We also show the dramatic effect that the incorporation of the full range of UKCP09 projections into Target Headroom has in certain zones How we approach climate change In June 2009 the United Kingdom Climate Impacts Programme ( UKCIP ) published new climate change scenarios, known as UKCP09, which replaced the UKCIP s 2002 projections that we had used in our 2008 plan. It is generally accepted that there are major uncertainties in the modelling of climate change, particularly as regards: the severity of the changes we might see; the timescale for changes; and the probability of any particular scenario occurring. For the purposes of preparing this Plan, we have used the medium climate change scenarios rather than either the upper or lower scenarios. Compared with the UKCIP 2002 projections, the main differences that these new scenarios bring to the planning process are: 1. the variability in seasonal changes in rainfall is much greater than previously projected; and 2. this is particularly pronounced for summer rainfall, which can vary from +20% to -40%. Most importantly, the probability of both drier winters and wetter winters is considered to be greater, which may significantly affect water resources. When we analyse the effects of climate change we make an assessment of the effects on the availability of water. We have not considered any potential changes to our licences that could be made in response to climate change. The treatment of uncertainty involves rigorous analysis and careful judgement. Figure 7.1 shows how the probability distribution around the effects of Target Headroom on water availability fans out as we move progressively into the future. (The overwhelming bulk of this uncertainty is related to the effects of climate change, the so-called S8 component of Target Headroom, with only some 10% being driven by other components.) This means that the implications for supply demand deficits and the range of investment and other options that might have to be considered varies enormously depending on how much risk the company is willing to bear. For example, in the case depicted in Figure 7.1, which relates to our largest zone, the South East Wales Conjunctive Use System zone (SEWCUS), if the company is willing to accept a 50% risk that the allowance in Target Headroom will be inadequate by 2034 (e.g. on the basis that it considers that there is adequate lead time to deal with shortfalls as at that date as better and less uncertain information becomes available) it would build 44 Ml/d into Target Headroom in this zone. If, on the other hand, it took a more cautious approach and 47 UK Climate Change Impacts Programme (UKCIP) : Murphy et al Page 68

73 wanted to be 95% sure that sufficient margin had been built into Target Headroom to allow for the effects of climate change by 2034, it would allow 130 Ml/d, a very dramatic difference. Figure 7.1 Target Headroom for SEWCUS at different levels of risk As described below, having analysed the implications of the UKCP09 climate scenarios in detail, we have treated the uncertainty around them as follows: we have reflected the UKCP09 50 percentile impacts in our projections of Deployable Output, as appropriate. This is in line with Environment Agency Guidelines; and we have quantified the additional effect of the full range of UKCP09 climatic impacts in our evaluation of Target Headroom, but have not used these sensitivities for the purposes of the main supply demand assessment and option appraisal in chapters 8 and 9. We have, however, presented what the outcomes would be if we had used the full range of UKCP09 impact (see below for further discussion). It is worth noting, in this context, that the choices we have considered revolve around the central or neutral projections (50 percentile) and the cautious or pessimistic scenarios (95 percentile). We are not concerned with the 5 or 10 percentile projections, which could be termed optimistic and indeed which, as figure 7.1 illustrates, actually imply negative target headroom The impact on supply Following the publication of UKCP09 climate change scenarios we analysed its impact upon Deployable Output in 17 of our 24 WRZs. 48 The impacts on the North Eyri Ynys Mon, SEWCUS and Pembrokeshire WRZs were assessed further as part of the work we carried out on these zones following changes to the baseline models in The impacts are summarised in Table 7.1 below. 48 N177i4 Assessment of the Impact of Climate Change on Deployable Output using UKCP09 Scenarios : Entec March Page 69

74 The impact of climate change in the remaining 7 WRZs under the UKCP09 scenarios remains the same as under the UKWIR06 approach. 49 This assumes that water availability is essentially unaffected because the relevant constraints on Deployable Output are the abstraction licence conditions. Currently, therefore, the effect of climate change is considered to be zero. Zone Median (50%ile) impact on DO from UKCP09 in 2035 Zone Median (50%ile) impact on DO from UKCP09 in 2035 North Eyri Ynys Mon -18% Hereford 0% Clwyd Coastal -1% Llyswen 0% Alwen Dee 0% Monmouth 0% Bala 0% Pilleth 0% Tywyn Aberdyfi -1% Brecon Portis 0% Blaenau Ffestiniog -3% Vowchurch -3% Barmouth -1% Whitbourne -2% Lleyn Harlech -1% SEWCUS 0% Dyffryn Conwy 0% Tywi Gower 0% South Meirionydd 0% Mid & South Ceredigion 50 +3% Ross On Wye 0% North Ceredigion -6% Elan Builth 0% Pembrokeshire -16% Table 7.1 Summary of median impact of UKCP09 climate change scenarios on baseline Deployable Output The zone where UKCP09 has the biggest negative impact on Deployable Output is North Eyri Ynys Mon with an 18% reduction in Annual Average Deployable Output, followed by Pembrokeshire with 16%. The impact on the other zones is less than 10%, including 4 zones where climate change is expected to have no effect, either because Deployable Output is already constrained by licence conditions or because it is bounded by the availability of storage. The impact of the scenarios is generally greatest in west Wales, particularly in those zones that rely on river abstractions where licence conditions may limit what we can abstract at times of low river flows. This explains, for example, the magnitude of the impacts in Pembrokeshire and Tywyn Aberdyfi The Impact on Target Headroom - Supply Although the Environment Agency s Water Resources Planning Guideline requires companies to build the effects of UKCP09 climate change projections into their water resources planning, there is currently no guidance as to precisely how this should be done. Further, in its latest (April 2011) update of the Guideline the Environment Agency acknowledges the uncertainty around the question of how UKCP09 scenarios should be applied to produce robust figures for the S8 component of 49 As presented in Effects of Climate Change on River Flows and Groundwater Recharge: Guidelines for Resource Assessment and UKWIR06 scenarios (UKWIR 2007). 50 For this zone, the median UKCP09 scenario has a slight positive impact on DO. Page 70

75 Target Headroom. 51 We have therefore used our judgement in deciding how our forecasts and assumptions should be modified to reflect the UKCP09 scenarios, drawing extensively on the principles contained in relevant UK Water Industry Research, where appropriate. We have examined how the incorporation of the full UKCP09 range of climatic scenarios into Target Headroom would affect the supply demand position in each zone. The following presents the net position in 2035 for each of our 24 zones: on a preliminary view, before the effects of the Environment Agency s consent review process and climate change are taken into account; after allowance is made for the impact of the Environment Agency s consent review process, as described in chapter 6; incorporating both the effects of the Environment Agency s consent review and the 50 percentile (median) UKCP09 scenarios in Deployable Output; and after allowing both the Environment Agency s consent review and the more cautious full range of UKCP09 scenarios (5 percentile to 95 percentile) projections on Deployable Output and Target Headroom. 51 In section 8.4 the Guideline states: We are currently working with the water industry to research suitable methodologies to enable these new scenarios to be used for water resources management plan assessments. Once these methodologies have been developed we will issue updated guidelines on climate change assessment for water resource planning. Page 71

76 Supply Demand Position in 2035 (Ml/d) Baseline (wholly excluding the effects of the Environment Agency s consent review and UKCP09) Including the Environment Agency s consent review Including the Environment Agency s consent review and the effects of the median UKCP09 scenario on Deployable Output Including the Environment Agency s consent review and the full range of UKCP09 in Target Headroom 8001, North Eyri Ynys Mon , Clwyd Coastal , Alwen Dee , Bala , Tywyn Aberdyfi , Blaenau Ffestiniog , Barmouth , Lleyn Harlech , Dyffryn Conwy , South Meirionnydd , Ross on Wye , Elan Builth , Hereford Conjunctive Use System , Llyswen , Monmouth , Pilleth , Brecon Portis , Vowchurch , Whitbourne , SEWCUS , Tywi Conjunctive Use System , Mid & South Ceredigion , North Ceredigion , Pembrokeshire Table 7.2 Effect of the Environment Agency s Review of Consents (RoC) and Climate Change on Supply Demand Deficits in 2035 Page 72

77 Ml/d The following chart illustrates how the position changes for each of the four sets of projections for the the South East Wales Conjunctive Use System (SEWCUS) zone, where the full range of UKCP09 scenarios has the greatest impact. 150 Supply Demand Balance SEWCUS Baseline (wholly excluding impacts of climate change) RoC (wholly excluding impacts of climate change) RoC (only UKCP09 50%ile directly on Deployable Output) RoC (full range of UKCP09 accounted for within Target Headroom also) Figure 7.2 Illustration of the effect of UKCP09 climate predictions on the supply demand balance - SEWCUS As the chart shows, before the effects of the Agency s Review of Consents and UKCP09 are taken into account, SEWCUS is projected to remain in healthy surplus throughout the Plan period. The effect of Review of Consents, by itself, is to wipe out the 75 Ml/d surplus shown in the top line for 2034, and to produce a small overall deficit of -3 Ml/d. The incorporation of the median UKCP09 scenario into Deployable Output moves the zone further into deficit, with the 2034 position deteriorating to a shortfall of 12 Ml/d. When the full UKCP09 scenarios relating to the impacts of climate change are incorporated in Target Headroom, however, a massive 104 Ml/d deficit is reached by the end of the Plan period. To put this further into context, the following table shows how this deficit is made up. Page 73

78 SEWCUS in 2034 (Ml/d) Water available for use 378 Demand 363 Target Headroom 119 Supply demand balance -104 Table 7.3 Primary components of supply demand balance in SEWCUS For the purposes of this Plan we gave careful consideration to whether we should base our strategy for planning investment and other options for achieving supply demand balance on the basis of projections that included or excluded the S8 component of Target Headroom. On the one hand, we acknowledge that climate change is a major source of uncertainty, especially in relation to its interaction with the effects of the Agency s consents review. On the other hand, we note that this is a developing area, and that best practice is not yet established: as noted above, the Environment Agency has acknowledged that there is some uncertainty as to how UKCP09 should be reflected in methodologies for determining Target Headroom, and plans to issue guidance in time for the 2013 draft WRMPs. There is also a question mark over how relevant an exercise it would be at this stage to prepare options for meeting a projected 104 Ml/d deficit in SEWCUS, an addition to capacity that is greater than the total water supplied by some other water undertakers. On balance, we have taken the pragmatic decision to opt for the latter approach. We consider that the uncertainty around how the full UKCP09 climatic scenarios should best be incorporated in water resource management planning, and Target Headroom in particular, is too wide to be relied upon at the present time for reliable projections of future water resource needs. We are confident that there is adequate lead time between now and the point at which we would have to commit to a programme of investment to address a deficit of the magnitude presented in Table 7.3, and will be in a position to take a more positive and less speculative view when we prepare the next draft Water Resources Management Plan, due for publication in In effect, therefore, for the purposes of the supply demand balances shown in the following section and the options for addressing supply demand deficits presented in chapter 9, we have incorporated the median UKCP09 scenarios in our projections of Deployable Output, but have not included an allowance for the uncertainty around the projections in our calculations of Target Headroom. It should be noted, however, that we have presented for information the options that we would select if we had included that allowance, i.e. addressed the full deficits shown in the final column in Table 7.2 above (see section 9.7 for details) The Impact on Target Headroom Demand We have, though, included the effect of climate change on demand in Target Headroom. Many of the components of the demand for water are influenced by weather conditions. For example, garden watering increases significantly in hot and dry weather. Research by Oxford University for the Department for Environment, Food and Rural Affairs 52 provides the best available estimates of the impact of climate change on future demands for water, as reflected in the UKCIP02 scenarios. The study presented indicative predictions, for a variety of scenarios, of the potential impact of climate change on key components of household and non-household water demands, based upon historical 52 CCDeW: Climate Change and the Demand for Water : Defra, Page 74

79 analysis of trends. Although we would welcome an industry update to this study to account for the changes in climate change projections, we consider that it provides a reasonable basis for the estimation of the effects of climate change on demand for the purposes of this Plan, and have reflected it in our forecasts of the supply demand balance for each zone, as presented in the following Chapter. Page 75

80 8. The Supply Demand balance This purpose of this chapter is to present the supply demand position for Wales over the Plan period. We do so on the basis of the ( central ) approach we have taken to climate change uncertainty, as described in chapter 7, and also present equivalent results on the basis of the incorporation of the (more cautious or pessimistic ) full range of UKCP09 scenarios in the S8 component of Target Headroom. We have not prepared projections on the basis of an optimistic view of the effect of climate change on Target Headroom Calculating the Supply Demand Balance The basic question in water resources planning is whether or not the supply of water, or Water Available for Use, is expected to be sufficient to meet the demand for water (defined as Demand plus Target Headroom), and therefore whether a zone is expected to be in surplus or in deficit (see figure 8.1). Figure 8.1 Calculating Supply Demand balance The supply demand balance is evaluated from two perspectives: the Annual Average and Critical Period (periods of peak demand) The projected Supply Demand balance Once the effects of climate change and the Habitats Review of Consents are taken into account in the way described in chapter 7, deficits at some point in the next 25 years are forecast for three WRZs, as depicted in the following map. Page 76

81 Figure 8.1 Surplus and deficit zones The three zones 53 that are forecast to fall into deficit at some point over the next 25 years are Brecon Portis, Pembrokeshire, and SEWCUS. When the full range of UKCP09 climate change scenarios are incorporated in the S8 component of Target Headroom, a fourth zone is projected to be in deficit over the same period, namely North Eryri Ynys Mon. 53 South Meirionnydd zone (Dry Year scenario) is shown to be marginally in deficit from onwards, to a maximum deficit value in of 0.08 Ml/d (80 m 3 /d). Given the marginal nature of this deficit late in the planning period and that significant revisions to the water resources planning process are to be undertaken over the next 12 months by Welsh Water (e.g. demand forecast update, review and update of inflows) it is not considered necessary or appropriate to subject South Meirionnydd to a full options appraisal at this time to mitigate against this deficit. Naturally, following the WRMP updates over the next 12 months, should South Meirionnydd be in deficit, then a full options appraisal will be completed for the March 2013 Draft Plan. Page 77

82 Table 8.1 below summarises the position for these three zones: Zone Reduction in DO (Ml/d) Enters Deficit Deficit by 2035 (Ml/d) Primary reason Brecon-Portis Habitats Directive Pembrokeshire SEWCUS Table 8.1 Supply Demand Deficits Climate Change and Habitats Directive Climate Change and Habitats Directive Table 8.2 summarises the position for the four zones that are projected to go into deficit when the full range of UKCP09 climate change scenarios is incorporated into the S8 component of Target Headroom. Zone Reduction in DO (Ml/d) Enters Deficit Deficit by 2035 (Ml/d) Primary reason Brecon-Portis Habitats Directive Pembrokeshire SEWCUS North Eryri Ynys Mon Climate Change and Habitats Directive Climate Change and Habitats Directive Climate Change Table 8.2 Supply Demand Deficits with the full range of UKCP09 climate change scenarios incorporated into the S8 component of Target Headroom The supply demand position of the remaining surplus zones over the plan period is presented in Appendix A (Zonal Summaries) Brecon Portis The projected deficit in this zone is driven wholly by the incorporation into our forecasts of the abstraction licence reductions required by the Environment Agency in the light of the Habitats Directive. As a result of these changes the volume of water we can abstract from the Brecon boreholes is reduced under low flow conditions in the River Usk. This means that during dry periods, when generally we see higher demands, our abstractions would be curtailed and we would be unable to meet demand. The zone is forecast to be in deficit under both the Annual Average and Critical Period planning scenarios. Under the Annual Average scenario the zone falls into deficit in 2020/21 reaching a maximum deficit of 0.55Ml/d by 2034/35. Under the Critical Period scenario the zone drops into deficit in 2020/21 to a maximum of 0.96Ml/d by 2034/35. Page 78

83 Ml/d Critical Period WAFU Demand + Target Headroom Figure 8.2 Brecon / Portis Supply Demand As noted in chapter 7 above, the supply demand deficit in this zone is unaffected if the full effects of UKCP09 climate change projections on Target Headroom are taken into account Pembrokeshire The calculated deficit in this zone is also driven primarily by the incorporation into our forecasts of the abstraction licence reductions required by the Environment Agency in the light of the Habitats Directive. As a result of these measures the volume of water we can abstract from our intakes on the Eastern and Western Cleddau rivers is severely reduced, particularly at Pont Hywel which would be rendered virtually unusable as a result of the licence changes proposed by the Environment Agency Wales during periods characterised by low flows and high demand. As a result, we would be unable to maintain storage levels in Preseli reservoir and could not, therefore, meet the demands placed on Preseli Water Treatment Works. The zone is forecast to be in deficit under both the Annual Average and Critical Period planning scenarios. Under the Annual Average scenario the zone falls into deficit in 2017/18 reaching a maximum deficit of 12.7 Ml/d by 2034/35. Under the Critical Period scenario the zone drops into deficit in 2020/21 to a maximum of 11.8 Ml/d by 2034/35. Page 79

84 Ml/d We have also modelled the impacts of the UKCP09 climate change projections. As with the Usk and the Wye, lower rainfall leads to lower river flows which means that the thresholds at which we have to reduce our abstractions from the Eastern and Western Cleddau rivers are reached sooner and more frequently thus exacerbating further the reductions in the availability of water. Inflows to our reservoirs are also reduced and so storage levels are lower Critical Period WAFU (-Exports) Demand + Target Headroom Figure 8.3 Pembrokeshire Supply Demand As noted in chapter 7 above, if the full range of UKCP09 climate change scenarios is taken into account in Target Headroom, the calculated deficit in this zone increases from 12.7 Ml/d to 18.2 Ml/d by This is illustrated in Figure 8.4 below. Section 9.7 below presents broad details of how this would affect our strategy for achieving supply demand balance in this zone. Page 80

85 Figure 8.4 Pembrokeshire Supply Demand incorporating the full effects of UKCP09 climate change scenarios 8.5. South East Wales Conjunctive Use System (SEWCUS) The deficit in this zone is primarily calculated on the basis of the Environment Agency s review of our relevant licences, but the effect of UKCP09 climate change scenarios on Deployable Output further exacerbates the position, and by 2035 there is a projected deficit of some 12 Ml/d. Figure 8.5 SEWCUS Supply Demand As noted in chapter 7 above, if the full range of UKCP09 climate scenarios is taken into account in Target Headroom, the deficit in this zone increases from 12.4 Ml/d to Ml/d by This is illustrated in Figure 8.6 below. Section 9.7 below presents broad details of how this would affect our strategy for achieving supply demand balance in this zone. Page 81

86 Figure 8.6 SEWCUS Supply Demand incorporating the full effects of UKCP09 scenarios 8.6. North Eyri Ynys Mon Under our preferred approach to the treatment of climate change uncertainty, this zone remains in surplus throughout the Plan period. However, if the full range of UKCP09 climate scenarios is taken into account in Target Headroom, the projected surplus of 2.9 Ml/d in 2035 becomes a deficit. Under the Annual Average scenario the resource zone falls into deficit in 2020/21, reaching a maximum deficit of 4.3 Ml/d by 2034/35. Under the Critical Period scenario the resource zone falls into deficit in 2019/20, reaching a maximum deficit of 5.4Ml/d by 2034/35. This is illustrated in Figure 8.7 below. Section 9.7 below presents broad details of how we would expect to address this. Page 82

87 Ml/d Critical Period WAFU Demand + Target Headroom Figure 8.7 North Eryri Ynys Mon Supply Demand incorporating the full effects of UKCP09 climate change scenarios Page 83

88 9. Option Appraisal In Chapter 8 we presented details of the three zones where we are projecting that at some point during the next 25 years demand will exceed the available water supply and the zone will enter deficit. This chapter explains how we evaluate the options available to address those deficits. We also provide in section 9.7 an overview of how we would address the bigger deficits in Pembrokeshire and South East Wales Conjunctive Use System zones on the basis of more pessimistic projections that take into account the full range of UKCP09 climate scenarios, together with details of the options for address the deficit that would emerge on this basis in North Eyri Ynys Mon. We have not appraised the options for meeting supply demand deficits on the basis of an optimistic view of the effect of climate change on Target Headroom. To maintain our relevant Level of Service, both at a company level and in each of the two WRZs, we either need to increase supply or reduce demand (or a combination of the two). Without such intervention these zones may experience a frequency of water restrictions such as hosepipe bans in excess of what we have established as the minimum level of service Our approach to appraising the options Overall methodology Our option appraisal approach follows national best practice and is consistent with the requirements of the Environment Agency s Guideline. The most important reference document on option appraisal is The Economics of Balancing Supply and Demand (EBSD) (UKWIR/EA 2002). The EBSD report sets out how water companies should identify, assess and compare alternative options for addressing supply demand deficits. In accordance with the Environment Agency s Guideline we have also used: Assessment of Benefits for Water Quality and Water Resources Schemes in the PR04 Environment Programme (EA, 2002), commonly referred to as the Benefits Assessment Guidance (BAG). This methodology provides non-prescriptive guidance on how to assess the environmental and social costs of options; and Providing Best Practice Guidance on the Inclusion of Externalities in the Economic Level of Leakage Calculation (Ofwat, 2007). This report provides guidance on how to assess the environmental and social costs of leakage reduction schemes Environmental Appraisal Following the adoption of the Environmental Assessment Directive 54 in 2004, it is now a statutory requirement to undertake a Strategic Environmental Assessment of the measures contained within the Plan. The purpose of such an Assessment is to identify the environmental, economic and social effects of each option. Our Strategic Environmental Assessment is presented in Chapter 10. In addition, to ensure that the options we propose have no adverse effect upon European designated Natura 2000 sites, we have also completed a Habitats Regulations Assessment. 55 We 54 Directive 2001/42/EC. 55 Schedule 1 of the Conservation (Natural Habitats, &c) Regulations 1994 (as amended) (the Habitats Regulations ) requires that competent authorities assess the potential impacts of land use plans on the Natura 2000 network of European protected sites. Page 84

89 have elected to undertake this assessment in order to demonstrate that, when implemented, the Final Plan will not have adverse effects on any designated sites. Full details of the Habitats Regulations Assessment can be found in Chapter The unconstrained list of options For each WRZ where a deficit has been predicted we have prepared an Unconstrained list of options. This represents an exhaustive list of all technically feasible options that could potentially redress the supply demand balance deficit. The Economics of Balancing Supply and Demand report sets out the range of options that should be considered and summarises them into four main categories: Distribution Management - options which reduce consumption from the point of input into the network to the customer property (leakage options and mains replacement); Customer-side Management - options which reduce customers consumption (water efficiency and tariffs); Production Management - options which reduce/modify usage from where it is abstracted to where it enters the network; and Resource Management - options that vary yield. We have undertaken a full up-to-date appraisal of options across these four categories. This ensures that every type of option has been duly considered. The range of sub-options within the above four categories is described in the report on the Economics of Balancing Supply and Demand and described fully in Appendix 3 of our supporting Engineering Report, Water Resource Option Assessment Report Identifying the feasible options A Multi-Criteria Analysis 57 was applied using 10 criteria grouped into the broad categories of Technical, Potential and Achievability, to refine the unconstrained list into a shorter Feasible list of options. The Multi-Criteria Analysis was undertaken on every Customer-side, Resource, and Production Management option to review how each compared against a number of key environmental, engineering and technical criteria, as specified under the Economics of Balancing Supply and Demand report approach. Additional environmental categories for the Resource and Production Management options were added to this analysis to improve our understanding of how each option could impact the environment. One of these categories is the inclusion of the results of the assessments the Environment Agency undertook for their Catchment Abstraction Management Strategy into what water, if any, is available for abstraction across the surface and groundwater catchments of Wales. Full details of this work are set out in our supporting Engineering Report. 56 Water Resource Options Assessment, Revised Draft : Welsh Water, April Multi Criteria Analysis is a common and accepted technique for making a comparative assessment of options, taking account of several criteria simultaneously. It is mainly used to assess impacts that cannot be readily quantified in monetary terms. Page 85

90 9.3. Feasible List Resource and Production Management From the Multi-Criteria Analysis process described above a total of 19 Resource and Production Management options across the three zones were assessed as Feasible and carried forward for more detailed analysis. For each we have determined: Capital expenditure (CAPEX); Design, planning and construction time (the lead time); Operational expenditure (OPEX); Gain in zonal Deployable Output or the savings in demand; Environmental and social costs and benefits (including carbon impact); and Average Incremental Social Costs Customer-side and Distribution Management From the Multi-Criteria Analysis process a total of 18 Customer-side Management options across the three zones were assessed as Feasible and carried forward. These consisted of five water efficiency options and one tariff option. Water savings and costs were calculated for each measure, the effect of which was then quantified for each zone using relevant figures for the number of properties and population. For the water efficiency measures, we have assumed that implementation takes place over a ten year programme, and that water savings are effective for 10 years, in line with manufacturers recommendations of an average 10 year lifespan for water efficiency products. Therefore, the measures were designed so that maximum penetration of each measure would be achieved at the end of the 10-year programme. In addition we have also included, for the Pembrokeshire and South East Wales Conjunctive Use System (SEWCUS) WRZs, three Distribution Management (leakage) options. These successively more intensive leakage control strategies essentially reduce leakage levels below the short run Economic Level of Leakage, and can be characterised as follows: 1. Reductions in detected leak run times this option essentially increases the amount of leakage detection resource available; 2. Location, operation and sounding of all fittings - this option targets previously undetected leakage from all fittings, not just those that are visible without excavation; and 3. Installation of permanent correlator noise loggers this option helps leakage teams to detect leaks quicker and to identify those leaks not usually detected through conventional means. These leakage options would ideally, but not necessarily, be implemented in sequence i.e. option 1 followed by 2 then 3, as each option involves progressively intensive actions and manpower. The 58 Average Incremental Social Cost is a measure of the overall financial, environmental and social cost of an option. It is usually expressed in terms of pence per cubic metre of water (p/ m 3 ). Page 86

91 costs and savings for each option have been estimated based on the manpower and capital requirements. Full details are provided in Annex VI of the supporting Leakage Report. 59 Tables , 9.2 and 9.3 present the feasible options and their respective total environmental, social and financial costs, for the three zones. They also show the potential water volume benefit for each option, enabling Average Incremental Social Costs to be calculated and the cost-effectiveness of each option to be compared. For example, the raising of the Llys Y Fran dam option for the Pembrokeshire WRZ has a comparatively high Average Incremental Social Costs value of 606p/m 3 and is the most expensive Resource and Production Management option for this zone. The primary feasible option shown for the Brecon Portis WRZ is River regulation from Usk reservoir. We have considered water efficiency options, but as a result of the small size of this zone these would not yield sufficient volumes to meet the deficit. The River regulation from Usk reservoir option has been discussed with and has the approval of the Environment Agency. The Average Incremental Social Costs values indicate the relative unit costs of each option but the overall least cost solution depends on the optimal schedule of interventions over time that best addresses the profile of the supply-demand deficits. Consequently, the most economic plan may not directly reflect the Average Incremental Social Costs (AISC) ranking. Option reference and name , Re-instate Milton source for industrial DO benefit (Ml/d) AIC (p/m3) Env and social cost (p/m3) AISC (p/m3) , Dam raising of Llys y Fran , Increased groundwater abstraction at Pendine , Upgrade Middle Mill Water Treatment Works , Re-instate Parc springs , Desalination Pembrokeshire WRZ , Abstraction from the Afon Taf , Transfer water from Bolton Hill Water Treatment Works to Preseli Water Treatment Works Ef, Tariff Option Metering ,013-78, Ef, Household - Home Visit Package ,177 31, , Ef, Household - Water Butts , Ef, Non Household Visit Package , Determining the Short Run Economic Level of Leakage for AMP5, Main Report : Welsh Water, December Options to also require the employment of option to realise the full potential increase in deployable output. Therefore, for these options, the Deployable Output Benefit, capital expenditure, operating expenditure (and hence Average Incremental Costs and Average Incremental Social Costs values) contain option , although not specifically stated in Table 9.1. The aggregation of options to with option is detailed in Appendix D (Water Resources Options Assessment Report). Page 87

92 Option reference and name DO benefit (Ml/d) AIC (p/m3) Env and social cost (p/m3) AISC (p/m3) Ef, Non Households Audits , , Lk, Leakage Option , , Lk, Leakage Option , Lk, Leakage Option , ,916 Table Feasible options, Pembrokeshire WRZ Option reference and name DO benefit (Ml/d) AIC (p/m 3 ) Env and social cost (p/m 3 ) AISC (p/m 3 ) , River regulation from Usk reservoir Table Feasible options, Brecon - Portis WRZ Page 88

93 Option reference and name , Increase zonal transfer from Tywi Gower in combination with Schwyll option b, New abstraction, S.E.Wales groundwater resource, new Water Treatment Works DO benefit (Ml/d) AIC (p/m 3 ) Env and social cost (p/m 3 ) AISC (p/m 3 ) , , Dam raising at Craig Goch , Re-instate Grwyne reservoir with new Water Treatment Works , Utilisation of Grwynne as Usk compensating reservoir , Re-instate Wentwood reservoir with new Water Treatment Works , Reinstate treatment for Ynys y Fro and Pant yr Eos reservoirs , Reinstate the Bwllfa Graig Water Treatment Works , , , Desalination SEWCUS WRZ , Reinstate Clydach reservoir and Perthcelyn Water Treatment Works ,205 2, Ef, Tariff Option - Metering ,935-34, Ef, Household - Home Visit Package Ef, Household - Water Butts Ef, Non Household Visit Package Ef, Non Households Audits Lk, Leakage Option , , Lk, Leakage Option Lk, Leakage Option , ,687 Table Feasible options, South East Wales Conjunctive Use System (SEWCUS) WRZ Page 89

94 9.4. Environmental and Social costing As noted above, the environmental and social costs of each option are taken into account in deriving the optimal strategy for addressing supply demand deficits, in accordance with the Environment Agency s guidance. 61 We divide environmental and social impacts into those that are water-related (primarily changes in river flows) and those that are non-water related, such as the effects of construction works and use of energy. Full details of the Environmental and Social costing can be found in our supporting Engineering Report. 62 We have also made a separate assessment of carbon emissions. This is a new element of Water Resources Management Plans. 63 In carrying out this analysis we have distinguished between embedded carbon emissions resulting from construction activities such as the processing of raw materials, transport, waste removal etc, and operational carbon emissions that arise both directly and indirectly from our own activities. The graph below shows an example of the output of this analysis. accounting process can be found in the technical supporting document. 64 Full details of the carbon Figure 9.1 Carbon Costing in Pembrokeshire We have also assessed the operational carbon impact of the preferred options on the estimated Company operational carbon footprint for water services. This is shown in Figure 9.2. Actual (outturn) data is shown in blue along with forecasted data (in red), based on our year on year reduction 61 Benefits Assessment Guidance: EA, Water Resource Options Assessment, Revised Draft : Welsh Water, April The requirement to undertake carbon accounting is set out in the joint Defra / Welsh Government Water Resources Management Plan Direction Carbon accounting of the Water Resources Management Plan (Halcrow 2009). Page 90

95 target of 3% per year. The actual and the forecast data has been uplifted to represent Dry Year scenario outputs as the original forecast was based on a normal year. This was undertaken to allow direct comparison with, and inclusion of, the preferred options which emerge under the Dry Year scenario. The forecast data also takes into account that from onwards our operations will be significantly influenced by the changes to our existing licences under the Habitats related consents review. The forecast data has been adjusted accordingly. The implementation of the preferred options are shown cumulatively on top of the forecast data. Figure 9.2 Operational carbon impact of the Preferred options over and above the Company total footprint Page 91

96 9.5. Selecting the preferred option To select the preferred option(s) for each zone we added the financial costs to the environmental and social costs to arrive at an overall Average Incremental Social Costs estimate. Using a bespoke mathematical least cost planning model 65 we then derived the least cost combination of options that would meet the deficits under both the Annual Average and Critical Period planning scenarios. This is explained further in section 9.6 below. Annex 4 provides details of the ranking of options for the three deficit zones Optimisation model The optimisation model calculates the supply demand balances, from the individual components, for each WRZ then evaluates the least cost combination of options, from the range of options and cost data, which could be implemented to meet the forecast deficits. The model: determines the Average Incremental Cost & Average Incremental Social Cost for each option; identifies the least-cost combination/ mix of options that best meets the supply demand deficit for each WRZ; and derives the Preferred set of options that meets the supply demand balance deficit, for each WRZ, at the least long-run marginal cost. The model has been developed to allow changes in the various components of the supply demand balance to be rapidly incorporated to take account of, for example, potential climate change scenarios and sustainability reductions. The model allows for the identification of options links and dependencies. For example, the model will only select one option, if programmed to do so, where multiple source options have been identified to supply one Water Treatment Works, or, where there are transfers from one source to multiple WRZ s. The model also includes a Geographic Information System ( GIS ) interface that allows the options to be visualised and their relationship, for example, with existing Welsh Water infrastructure and their proximity to environmentally sensitive areas. As the Preferred option set will likely form the basis of the Plan submission, the model also produces the optimisation run results in the required format for Tables WRP2 and WRP3, as required by the Agency s Guideline. To reiterate, the Average Incremental Social Cost values indicate the relative unit costs of the options but the least-cost solution depends on the optimal schedule of options over time that best satisfies the supply-demand deficit profile. Consequently, the most economic plan may not necessarily directly reflect the Average Incremental Social Costs ranking, as shown in Tables 9.1, 9.2, 9.3 and 9.13, which show the Average Incremental Social Costs based on the maximum capacity of the options and not the Utilised capacity of the option (to meet the specific zonal deficit). 65 Lot 5 Least Cost Water Resources Planning Model Functional Description (Jacobs 2008a), and Lot 5 Least Cost Water Resources Planning Model User Guide (Jacobs 2008b). Page 92

97 9.7. Preferred Options for Addressing Supply Demand Deficits (Without Incorporating the Full Range of UKCP09 Climate Scenarios in Target Headroom) Pembrokeshire The options that have been selected on a least cost basis for this zone, which meet the deficits under both the Annual Average and Critical Period scenarios, are presented in Table 9.4. Further detail of what these options entail is contained in Table 9.5. Option No. and Name Implementation date /Deployable Output benefit Capital Expenditure ( M) Annual Operating Expenditure ( M) Net Present Value of Capital Expenditure and Operating Expenditure ( M) Net Present Value of Env and Social costs ( M) Total Net Present Value ( M) , Reinstate Milton source for industrial use & , Transfer water from Bolton Hill Water Treatment Works to Preseli Water Treatment Works (implement ed as an aggregated solution) Ml/d Table 9.4 Preferred solution (on least cost basis) for Pembrokeshire WRZ Page 93

98 Milton Borehole, located 3km from Carew, is an emergency source that is only made operational to supplement the potable supply from Bolton Hill Water Treatment Works during periods of high demand , Reinstate Milton source for industrial use , Transfer water from Bolton Hill Water Treatment Works to Preseli Water Treatment Works Water would be abstracted and softened in a new 8Ml/d Water Treatment Works and blended with existing supplies. The water would be used to deliver water to the industrial supplies in the area thereby releasing water currently abstracted from the Eastern Cleddau for distribution in the wider WRZ. Bolton Hill Water Treatment Works near Haverfordwest is currently supplied with water from the Eastern and Western Cleddau; Preseli Water Treatment Works is mainly supplied from Preseli Reservoir supplemented from an abstraction at Llysyfran. This option involves upsizing and re-commissioning 10km of mains in and around Haverfordwest to enable water to be transferred between the two Water Treatment Works, and building a new water pumping station to allow water to be moved from the south west of the WRZ to the north east. Table 9.5 Pembrokeshire Options Figure 9.3 shows how these options address the deficit over time. Figure Preferred solution (least cost) for Pembrokeshire WRZ, Utilised Water Available for Use (Annual Average Dry Year) Brecon Portis WRZ The option that has been selected for this zone is Option No River regulation from Usk reservoir, details of which are presented in Table 9.6. Page 94

99 Option No. and Name Implementation date/ Deployable Output benefit Capital Expenditur e ( M) Annual Operating Expenditure ( M) Net Present Value of Capital Expenditure and Operating Expenditure ( M) Net Present Value of Env and Social costs ( M) Total Net Present Value ( M) , River regulation from Usk reservoir Ml/d Table Preferred solution (on least cost basis) for Brecon - Portis WRZ This option involves making additional releases from Usk Reservoir in order to augment river flows and thereby enable abstraction at Brecon to be maintained at required levels SEWCUS WRZ The options that have been selected on a least cost basis for this zone are presented in Table 9.7. Further detail of what these options entail is contained in Table 9.8. Page 95

100 Option No. and Name Implementation date/do benefit Capital Expenditure ( M) Annual Operating Expenditure ( M) Net Present Value of Capital Expenditure and Opex ( M) Net Present Value of Env and Social costs ( M) Total Net Present Value ( M) , Reinstate Grwyne reservoir with new Water Treatment Works , Reinstate Wentwood reservoir with new Water Treatment Works Ml/d Ml/d Table 9.7 Preferred solution (on least cost basis) for SEWCUS WRZ , Reinstate Grwyne reservoir with new Water Treatment Works , Reinstate Wentwood reservoir with new Water Treatment Works Grwyne Reservoir previously supplied water to the Abertillery area, over 40 km to the south. The reservoir is now mothballed. This option would construct a wholly new Water Treatment Works to treat the raw water from the reservoir. Potable water mains have recently been re-laid so no new mains would be required. This option would provide up to 6 Ml/d. Wentwood Reservoir, that previously supplied the south east Gwent distribution zone, has some algal problems. It is now used for recreation and fishing. This option would reinstate Wentwood Reservoir and provide improved treatment facilities. This option would provide up to 8 Ml/d. Table 9.8 SEWCUS Options Figure 9.4 shows how these options address the deficit over time Demand Management and Leakage options As stated in section 9.6, the options are selected on a least cost basis, in parallel with the environmental appraisal conducted through the Strategic Environmental Assessment and Habitats Regulations Assessment (section 10.2 and section 10.3). Although many of the demand management and leakage options have been appraised as potentially contributing positively to the environment, in conjunction with the least cost modelling process they have not been selected as the Preferred options as the demand savings of the options are either not sufficient to meet the deficits either because the option demand savings are wholly too low to meet the deficits, or, in the case of Page 96

101 the water efficiency options, the ramping up (10 year period) and ramping down (10 year period) of the demand savings cannot meet the deficits across the full planning period (see section 9.3). Where demand management and leakage options do have sufficient yields to meet the deficits, then their implementation is not cost effective. Figure Preferred solution (least cost) for SEWCUS WRZ, Utilised WAFU (Annual Average Dry Year) Page 97

102 9.8. Preferred Options for Addressing Supply Demand Deficits, Incorporating the Full Range of UKCP09 Scenarios in Target Headroom Our preferred options for addressing the deficits that arise when the full effects of UKCP09 scenarios in Target Headroom are taken into account (see Table 8.2 above) are presented below. The options for Pembrokeshire and North Eyri Ynys Mon meet the deficits under both the Annual Average and Critical Period scenarios Pembrokeshire For Pembrokeshire the supply demand deficit that we would have had to address on this basis would have been somewhat greater, rising to 18.2 Ml/d by 2035 instead of 12.7 Ml/d. Our indicative preferred options for meeting this shortfall are set out in table 9.9, and further details of the schemes are set out in table Option No. and Name Implementation date/do benefit Capital Expenditure ( M) Annual Operating Expenditure ( M) Net Present Value of Capital Expenditure and Opex ( M) Net Present Value of Env and Social costs ( M) Total Net Present Value ( M) Ef, Non Household - Non Household Visit Package , Abstraction from the Afon Taf & , Transfer water from Bolton Hill Water Treatment Works to Preseli Water Treatment Works (implemented as an aggregated solution) Ml/d Ml/d Table 9.9 Preferred solution (on least cost basis) for Pembrokeshire WRZ Page 98

103 Ef, Non Household - Non Household Visit Package , Abstraction from the Afon Taf , Transfer water from Bolton Hill Water Treatment Works to Preseli Water Treatment Works This water efficiency option targets small businesses, advising on the efficient use of water and providing water efficient devices, such as, low water use taps. This option would save up to 17 Ml/d. The Afon Taf originates on the western fringe of the Preseli Hills and flows southwards, before flowing into Carmarthen Bay, south west of Carmarthen. This option would abstract water from the lower reaches of the Afon Taf. A new Water Treatment Works and associated pipeline/ network changes would be required. The option yield is 10 Ml/d. Bolton Hill Water Treatment Works near Haverfordwest is currently supplied with water from the Eastern and Western Cleddau; Preseli Water Treatment Works is mainly supplied from Preseli Reservoir supplemented from an abstraction at Llysyfran. This option involves upsizing and re-commissioning 10km of mains in and around Haverfordwest to enable water to be transferred between the two Water Treatment Works, and building a new water pumping station to allow water to be moved from the south west of the WRZ to the north east. Table 9.10 Pembrokeshire Options Brecon Portis WRZ As explained in section 8.3 above, DO in this zone is considered to be constrained by licence conditions, so the use of the full range of UKCP09 scenarios in Target Headroom has no incremental impact. The preferred option is therefore the same as shown in Table 9.6 above SEWCUS WRZ For SEWCUS the supply demand deficit that we would have to address would have been considerably greater as a result of the use of the full range of UKCP09 scenarios in Target Headroom, rising to Ml/d by 2035 instead of just 12.4 Ml/d. Our indicative preferred options for meeting this shortfall are set out in table 9.11, and further details of the schemes are set out in table Page 99

104 Option No. and Name Implementation date/do benefit Capital Expenditure ( M) Annual Operating Expenditure ( M) Net Present Value of Capital Expenditure and Opex ( M) Net Present Value of Env and Social costs ( M) Total Net Present Value ( M) Options implemented as a group: , Reinstate Grwyne reservoir with new Water Treatment Works , Reinstate Wentwood reservoir with new Water Treatment Works , New abstraction, S.E. Wales including new Water Treatment Works , Reinstate the Bwllfa Graig Water Treatment Works , Reinstate treatment for Ynys y Fro and Pant yr Eos reservoirs Ml/d Page 100

105 Locate, Operate and Sound All Fittings (leakage option) Ef, Non Household - Non Household Visit Package , Desalination plant SEWCUS WRZ Ef, Non Household - Non Households Audits Ml/d Ml/d Ml/d Ml/d Table 9.11 Preferred solution (on least cost basis) for SEWCUS WRZ Page 101

106 Options implemented as a group: , Reinstate Grwyne reservoir with new Water Treatment Works , Reinstate Wentwood reservoir with new Water Treatment Works , New abstraction, S.E. Wales gw resource, new Water Treatment Works , Reinstate the Bwllfa Graig Water Treatment Works , Reinstate treatment for Ynys y Fro and Pant yr Eos reservoirs Lk, Locate, Operate and Sound All Fittings (leakage option) Ef, Non Household - Non Household Visit Package , Desalination SEWCUS WRZ Ef, Non Household - Non Households Audits Grwyne Reservoir previously supplied water to the Abertillery area, over 40 km to the south. The reservoir is now mothballed. This option would construct a wholly new Water Treatment Works to treat the raw water from the reservoir. Potable water mains have recently been re-laid so no new mains would be required. This option would provide up to 6 Ml/d. Wentwood Reservoir, that previously supplied the south east Gwent distribution zone, has some algal problems. It is now used for recreation and fishing. This option would reinstate Wentwood Reservoir and provide improved treatment facilities. This option would provide up to 8 Ml/d. Investigations have shown that there is a significant amount of groundwater available from the carboniferous limestone block of south east Wales and so we plan to utilise this by building a new Water Treatment Works to treat the abstracted water and deliver the water into the Cardiff/ Newport area. This option would provide up to 33 Ml/d. The reservoir at Bwllfa Graig has been out of operation for a number of years and the associated Water Treatment Works has been decommissioned. This option would reinstate the Water Treatment Works and deliver the water into the supply network. This option would provide up to 5 Ml/d. The reservoirs at Ynys y Fro and Pant yr Eos have been out of operation for a number of years and their associated Water Treatment Works have been de-commissioned. This option would reinstate the Water Treatment Works and deliver the water into the supply network. This option would provide up to 10 Ml/d. This leakage option targets previously undetected leakage from all fittings, not just those that are visible, by increasing the available resources. This option would save up to 13 Ml/d. This water efficiency option targets small businesses, advising on the efficient use of water and providing water efficient devices, such as, low water use taps. This option would save up to 11 Ml/d. This option would construct a seawater desalination plant. Treated water would be transferred to an existing Water Treatment Works or service reservoir for blending with alternative supplies. This option would save up to 10 Ml/d. This water efficiency option targets large businesses advising on the efficient use of water, specifically related to their processes, and recommending alternative water efficient engineering solutions. This option would save up to 22 Ml/d. Table 9.12 SEWCUS Options Page 102

107 9.8.4 North Eyri Ynys Mon WRZ For North Eyri Ynys Mon, the surplus that we had been forecasting turns to a deficit of 4.3 Ml/d by Table 9.13 presents the Feasible options and their respective total environmental, social and financial costs for this zone. Option reference and name DO benefit (Ml/d) AIC (p/m 3 ) Env and social cost (p/m 3 ) AISC (p/m 3 ) , Connect Afon Rhythallt to Cwellyn Water Treatment Works , New Crug Water Treatment Works and utilisation of existing Afon Rhythallt source , New abstraction at Llyn Cowlyd and upgrade Mynydd Llandygai Water Treatment Works , New abstraction at Llyn Cowlyd - new Water Treatment Works , Licence Variation at Llyn Cwellyn and Cwellyn Water Treatment Works upgrade , Utilisation of abstraction from Afon Seiont - upgrade Mynydd Llandygai Water Treatment Works , Dam Raising Ffynnon Llugwy , Desalination North Eryri/Ynys Mon WRZ Ef, Tariff Option - Metering , , Ef, Household - Home Visit Package Ef, Household - Water Butts Ef, Non Household Visit Package Ef, Non Households Audits Lk, Leakage Option , Lk, Leakage Option , Table 9.13 Feasible options, North Eyri Ynys Mon Our indicative preferred options for meeting this shortfall are set out in table 9.14, and further details of the schemes are set out in table Page 103

108 Option No. and Name Implementation date/do benefit Capital Expenditure ( M) Annual Operating Expenditure ( M) Net Present Value of Capital Expenditure and Opex ( M) Net Present Value of Env and Social costs ( M) Total Net Present Value ( M) , Connect Afon Rhythallt to Llyn Cwellyn Ml/d Table 9.14 Preferred solution (on least cost basis) for North Eyri Ynys Mon WRZ , Connect Afon Rhythallt to Llyn Cwellyn Afon Rhythallt drains the Padarn and Peris lakes at Llanberis. An existing intake at Crawia weir near Llanrug previously abstracted water to Crug Water Treatment Works, near Caernarfon. Crug Water Treatment Works is now abandoned. This option would abstract water from Afon Rhythallt and transfer the water to Cwellyn Water Treatment Works, which has been upgraded as part of Welsh Water s AMP 5 Quality Programme and would enable the increased flows to be managed. This option has a yield of 3.4 Ml/d. Table 9.15 North Eyri Ynys Mon Options The above Preferred option for North Eyri Ynys Mon has been selected by our least cost model in line with the comments in section In summary, the options we have identified to address the deficits in these four zones on this basis would cost some 200m in Net Present Value terms, and would add approximately 20 per annum to the average household bill for water supply in our area Sensitivity Our Plan is based on detailed studies, calculations and expert opinion about future outcomes. It is critical to consider the sensitivity of the Plan to any changes to demonstrate the robustness and flexibility of the Plan. We have examined: sensitivity of the supply-demand balances to changes in data; and sensitivity of the strategy to changes in the options Changes in data Target Headroom (see 5) enables the quantification of a wide range of potential uncertainties and includes some allowance for them in the supply-demand balance calculations. This is generally particularly critical for the potential impact of climate change on source yields and uncertainty in future demand (although we have detailed our approach regarding climate change earlier in the Plan). Page 104

109 Actual demand for water is likely to vary from forecast levels due to uncertainties about future conditions outside of Welsh Water s control, such as population changes and economic trends. To some degree the water resources management plan process is able to accommodate these risks, as the Plan is updated every five years. For example, within that five year period, demand forecasts, climate change impacts, changes in source yields, are all revised and updated. This ensures in theory, that the Plan at any given point in time is robust, flexible and up to date. Page 105

110 9.9.2 Changes in Levels of Service For the three deficit zones of SEWCUS, North Eyri Ynys Mon and Pembrokeshire we have also undertaken an analysis of varying the Level of Service of the baseline models to ascertain the impact of Deployable Output. The results are shown in Table WRZ Deployable Output (Ml/d) LoS (years) Hosepipe Bans (no.) Demand shortfalls Other comments SEWCUS in in in in Llandegfedd reservoir at 20% Llandegfedd reservoir at 15% Llandegfedd reservoir at 7% Llandegfedd reservoir at 1% in NEYM in in in Pembrokeshire in in Table 9.16 Deployable output sensitivity to LoS (SEWCUS, NEYM and Pembrokeshire WRZ) The baseline Deployable Output value for SEWCUS is Ml/d, under which no Hosepipe Bans occur and Landegfedd reservoir storage continues to comply with Emergency Storage requirements. The Deployable Output in the zone can be increased, still with no Hosepipe Bans, to Ml/d (5% increase), but storage levels in Landegfedd reservoir fall to 7% which does not comply with Emergency Storage requirements. The Deployable Output in the zone can be increased further still to 429 Ml/d (7% increase) on the basis that 4 Hosepipe Bans will occur in a 33 year period (resulting in a LoS for the zone of 1 in 8 years) but with Landegfedd reservoir storage falling to 1% in the critical year. For the North Eyri Ynys Mon Water Resource Zone, the Deployable Output can only be increased to Ml/d (increase of 4%) by lowering the Level of Service to 1 in 15 years and incurring a number of demand failures. For the Pembrokeshire Water Resource Zone the Deployable Output can only be increased to Ml/d (increase of <1%) by lowering the LoS to 1 in 12 years. In summary, for the small gains in Deployable Output in each zone and the considerable risk to security of supply, we do not consider that varying the zonal Level of Service and potentially imposing restrictions on our customers on a more frequent basis is justified Changes in the options This Plan has identified preferred solutions which are likely to form part of the overall strategy. For each option we have allowed sufficient investigation time and costs. Therefore, we are not anticipating that the list of resource options will change. Page 106

111 However, during the investigation phase should, for example, an environmental issue arise that would rule out that option, then we assessed what other options would be selected as part of the Preferred solution. In preparing the Plan, this was a major concern for the Countryside Council for Wales and Natural England who, rightly, required us to demonstrate that should an option at detailed project stage prove to have a likely adverse impact on protected environmental sites or species, that we could implement alternative options to maintain the supply demand balance. This is detailed in the Strategic Environmental Assessment and the Habitats Regulations Assessment reports. For the deficit zones of SEWCUS and Pembrokeshire, should at least one of the options need to be excluded, then we have itemised, in Table 9.17 the next alternative preferred solutions. Preferred option excluded Alternative options selected SEWCUS , Reinstate Grwyne reservoir with new Water Treatment Works , Reinstate Wentwood reservoir with new Water Treatment Works , Reinstate the Bwllfa Graig Water Treatment Works Pembrokeshire , Reinstate Milton source for industrial use , Abstraction from the Afon Taf Table 9.17 Alternative Preferred options Due to the geography of Wales, some of the preferred options naturally have high Operating Expenditure due to increased pumping requirements. We have undertaken sensitivity on the choice of preferred solutions for each deficit zone, should the Operating Expenditure estimates of the feasible list of options prove to be different from that currently estimated. If we increase the Operating Expenditure costs of all the feasible options by 20%, then the same preferred options are still selected.. Page 107

112 10. Environmental Appraisal Introduction This chapter presents the work we have undertaken to identify and assess the potential effects of our Plan on the environment. It describes how we have undertaken this assessment, the results of that assessment, and any further work that we need to carry out. Overall, the environmental appraisal shows that our Plan, and specifically the Preferred Options, are not expected, at this stage, to have any significant environmental impacts. However, in the event that any of our preferred options are found to have significant environmental impacts once we reach the stage of detailed investigations and scheme design, we have identified a number of alternative options that could be implemented instead Strategic Environmental Appraisal Under the Plan we have identified the most economic (least cost) combinations of options to meet the predicted supply shortfalls over the next 25 years. In doing so we included, within the costing process, the potential environmental and social costs of each option. In addition to this, we have prepared a Strategic Environmental Assessment. This Assessment is a statutory process 66 that identifies and assesses potentially significant environmental effects of the Plan, and, where appropriate, how negative impacts might be mitigated and positive impacts enhanced Habitats Regulations Assessment In addition to carrying out a Strategic Environmental Assessment, we have also assessed the potential impacts of this Plan against the conservation objectives for designated European sites. 67 This is known as a Habitats Regulations Assessment 68 and is driven by the Habitats Directive. 69 The Habitats Regulations Assessment determines whether there will be any likely significant effects on any European site as a result of the implementation of the Plan (either on its own or in combination with other plans or projects) and, if so, whether these will adversely affect the integrity of the site. The Habitats Regulations Assessment, like the Strategic Environmental Assessment, has been an integral part of the development of the options from the outset and hence this Final Plan. In essence, the Strategic Environmental Assessment and Habitats Regulations Assessment process proceed alongside one another (and alongside the WRMP process) with the outcomes of the Habitats Regulations Assessment being incorporated into the Strategic Environmental Assessment 66 The Water Industry, through UK Water Industry Research Ltd (UKWIR) recognises that WRMPs may be subject to a SEA under the requirements of the European Directive 2001/42/EC (the SEA Directive). The SEA Directive has been transposed into UK legislation as Regulations. 67 HRA is required by law for all European Sites (Regulation 48). A European Site is any classified SPA and any Special Area of Conservation from the point where the Commission and the Government agree the site as a Site of Community Importance. HRA is also required, as a matter of Government policy, for potential SPAs, candidate Special Areas of Conservation and listed Ramsar Sites for the purpose of considering development proposals affecting them (PPG9 paras. 13 and C7). As such, pspas, cspecial Areas of Conservation and Ramsar Sites must also be considered by any HRA. Within this report European site is used as a generic term for all of the above designated sites 68 Appropriate Assessment has been historically used as an umbrella term to describe the process of assessment as a whole. The whole process is now more accurately termed Habitats Regulations Assessment (HRA), and Appropriate Assessment is used to indicate a specific stage of a HRA. 69 Council Directive 92/43/EEC on the conservation of natural habitats and of wild fauna and flora. Page 108

113 Environmental Report. The approach we took to carrying out the Habitats Regulations Assessment is described in Section Consultation We have worked closely with the Countryside Council for Wales and Natural England in preparing both the Strategic Environmental Assessment and the Habitats Regulations Assessment, and have discussed with them our approach to undertaking the environmental appraisal, the evaluation of the preferred options, and the format of the Strategic Environmental Assessment and Habitats Regulations Assessment reports. We believe that through this process we have achieved a robust and appropriate appraisal of the potential environmental impacts of the Plan Strategic Environmental Assessment Environmental Baseline Defining the environmental baseline, relevant issues and the context is important in setting the framework for the Strategic Environmental Assessment. It involves the following elements: characterising the current state of the environment (including social and economic aspects); and identifying existing problems and opportunities to be considered in the Plan. Based on an analysis of up-to-date relevant information, we have identified the key sustainability issues (or Themes) in the Welsh Water region, for example, Water and Air and Climate. Within these broad Themes we have then assessed all the Feasible Options against key Objectives (eleven in total) to determine the potential impact that each option, individually and in combination, may have on the environment. Examples of the Objective questions are: ensuring sustainable use of water resources, and promoting the wise use of resources. Each of the feasible options was assessed against the Objectives to identify its potential impacts. These were assessed on the basis of the nature of the effect, its timing and geographic scale, the sensitivity of the people or environmental receptors that could be affected, and how long it might last. The Strategic Environmental Assessment Environmental Report fully details the Themes, Objectives and assessments for each of the deficit WRZs Summary of impacts In general, the assessment found that the options involving larger programmes of work or yielding more water tended to have the biggest impacts (both positive and negative) across the range of Objectives. This reflected, for example, the greater use of resources during construction and the more significant effect on security of supply. 70 Strategic Environmental Assessment of Revised Draft WRMP, Revised Environmental Report : Entec UK Limited, March Page 109

114 Using the findings of the assessment The assessment helped to highlight the range of potential environmental and social impacts, including those that had been quantified and those that could only be identified qualitatively. The assessment did not highlight any major effects that we had not already considered in developing the most economic combinations of options, although it helped to identify where there are more minor effects and how some of the potential negative impacts can be mitigated Habitats Regulations Assessment The Process As stated, we have undertaken a Habitats Regulations Assessment of this Plan, which is reported separately. 71 The Habitats Regulations Assessment was undertaken as an iterative process alongside the development of the Plan, to help to ensure that the Final Plan will not have adverse effects on any European Sites when implemented. The Habitats Regulations Assessment is appropriate to the Plan, which means that it recognises that there are inherent uncertainties both within strategic plans and within the Feasible options: that is, at this high level of planning it is only possible to identify effects that may occur; it is not possible meaningfully to quantify or otherwise assess the effects at this stage. The Habitats Regulations Assessment has identified whether any feasible options would have unacceptable effects on a European Site. This process informed the selection of the preferred options. Further assessment was then undertaken on the preferred options to ensure that any likely significant effect or adverse effects were identified and appropriate measures developed to ensure that these effects would be avoided or reliably mitigated when the Final Plan is implemented. The Habitats Regulations Assessment must also consider the potential impact on any European Site, whether within our geographical boundary or not, and whether impacted individually by our Plan or in combination with other Plans. In the case of our Plan, which operates at a strategic level, the main in combination effects will be associated with other strategic plans and programmes, particularly those involving water resources (for example, our Drought Plan) Review of Feasible options The Feasible options were reviewed for their possible effects on European Sites using a preliminary screening method. This identified those European Sites that could potentially be affected by the implementation or operation of each feasible option, given the characteristics of the Site, the means by which it might be affected by the option, and the distance from the option to the Site. This stage was primarily used to identify those options that would clearly have unacceptable effects on a European site, which then informed the selection of the preferred options Assessment of Preferred options Following from the screening of feasible options through both the Habitats Regulations Assessment and Strategic Environmental Assessment process, the initial preferred options were re-screened and assessed in greater detail for their likely impacts on European Sites. 71 Habitats Regulations Assessment of Revised Draft WRMP : Entec UK Limited, March Page 110

115 Where potential effects were identified as uncertain (as is often the case when the examination is at a comparatively strategic level) an assessment of likely significant effect was made and avoidance measures or mitigation proposed to help to ensure that there would be no adverse effects. For some options, any such effects are likely to be localised and can therefore be more appropriately assessed at the more detailed planning stages. In this case, the assessment identified the risk of effects but assumed that Habitats Regulations Assessment of lower level strategies or the individual options themselves will be sufficiently rigorous to avoid significant or adverse effects. Since the precise manner and timescale in which the various options could be implemented is unknown, not all the possible effects can be assessed at the strategic level and some can only be determined at a project level. This means that the Habitats Regulations Assessment must assume that all normal controls will be applied (i.e. at a project-level Habitats Regulations Assessment) and that likely significant effect can only be concluded where the level of development required is unlikely to be accommodated, regardless of project-level mitigation. For example, an option requiring construction work within a Special Area of Conservation may initially appear certain to have likely significant effect; however, that option may involve simply refitting existing operational structures, which can almost certainly be easily accommodated without likely significant effect or adverse effects. The opposite is also true. This means that the strategic Habitats Regulations Assessment must consider whether the likely level of development required for the option can be accommodated and (if this is uncertain) whether there are other practicable options available that will not have a likely significant effect Summary of Assessment The Habitats Regulations Assessment concluded that most of the feasible and preferred options had the potential for likely significant effect on at least one European Site; however, for most options it was very clear that the potential effects were of a scale and type that could certainly be avoided at the scheme level with standard and accepted measures. There are two options where the available data strongly suggests that there will be no adverse effects, but this cannot be concluded with certainty at the strategic level. These schemes are: Brecon-Portis: additional releases from Usk Reservoir; and Pembrokeshire: re-instate Milton source for industrial use. We believe that it is acceptable to include these schemes in the Plan for now on the basis that Habitats Regulations Assessments and assessments at the scheme level can be expected to resolve the uncertainties (since scheme-specific Habitats Regulations Assessment will be a legal requirement before these schemes can be implemented), provided that potential alternatives with no adverse effects are identified within the Plan. The Plan has therefore included these schemes as preferred options, with the proviso that alternative options have been identified that could be employed should the options in question prove to have adverse effects that are unavoidable. This process and the alternative options are detailed fully in the Habitats Regulations Assessment report Conclusion Overall the Habitats Regulations Assessment has concluded that the Final Plan will not have any significant adverse effects on any European Site (alone or in combination with other plans and programmes) as a result of its implementation, since the preferred options: either will have no significant or adverse effect as they stand; or Page 111

116 can be implemented using established and reliable best-practice mitigation/ avoidance measures to ensure no significant or adverse effects; or can be replaced by options that have no likely significant effect or adverse effects from the feasible options list, should scheme-specific investigations demonstrate that adverse effects are certain and cannot be avoided or mitigated. All options will, in any case, be subject to project-level Habitats Regulations Assessment, as a matter of legal requirement, which will provide an additional safeguard. Page 112

117 11. Further Work to support the 2013 Draft WRMP Welsh Water is keen to continue to progress and update its assessments. It is also important to us that we follow any new industry methodologies and ensure that our assumptions are based on the most up to date data available. The details of the areas we are committed to addressing in our 2013 draft Water Resources Management Plan are outlined below: Climate change and Target Headroom: We will follow the methods set out in the Environment Agency s Water Resources Planning Guideline (2012) for both the climate change assessment and the development of target headroom. We acknowledge the requirement in the Guideline to accept a higher level of risk in future years when setting the risk profile in target headroom, but also recognise that it is Welsh Water s decision regarding the level of risk to take. This level of risk will be decided by our Board of Directors, and will take account of the best interests of our customers and the environment. Habitats Directive: We will show the impact of making Habitats Directive licence changes on the Wye, Usk and Cleddau in our baseline supply demand balance as advised by the Environment Agency. Leakage control: In principle we support Welsh Government s view that leakage should not be allowed to rise at a company level, and it should not be allowed to rise at a resource zone level to a point at which it drives new supply schemes or demand management options. We are however, in the process of developing our new draft WRMP, and until we assess all the options available to meet any supply demand deficits that may be identified within a water resource zone, we are not in a position to confirm leakage reduction as the most suitable option to maintain the security of supply for our customers within a specific resource zone. We are committed to continued discussions with the Environment Agency, Ofwat and Welsh Government regarding the use of leakage options and how these can best be implemented to benefit both our customers and the environment. Sustainable Economic Level of Leakage (SELL): We will evaluate alternative active leakage control policies against our current leakage policy to ensure effective management of our network. We would also welcome the opportunity to discuss with Welsh Government and the Environment Agency how they see the Economic Level of Leakage (ELL) being developed to better include the social and environmental aspects of the assessment. Water efficiency and leakage control options: We will explore innovative and cost effective water efficiency measures and look to working in partnership with other organisations on a wider range of leakage control options as part of the process for developing our draft WRMP. We will also assess these options as being flexible and incremental to be able to meet actual levels of deficit within our draft WRMP. As part of developing a robust Water Resources Management Plan we will also be required to appropriately account for the level of risk associated with such options in terms of any uncertainties around the yield they may Page 113

118 deliver and the costs of these options. We are committed to continued discussions with the Environment Agency and Ofwat regarding how best to use these options to benefit both our customers and the environment. Monetary benefits of leakage control and demand management options: We will follow the Environment Agency Guidance available on including the monetary benefits of leakage control and demand management options within the environmental and social costings. We will work with the Environment Agency to clearly understand the requirements for this work and include it within our assessments to support our draft Water Resources Management Plan when appropriate and quantifiable. Options appraisal: We will follow the methods set out in the Environment Agency Water Resources Planning Guidelines (2012) for options appraisal. We recognise that both the Environment Agency and Ofwat have said that water companies should not necessarily follow a least cost approach to option selection, and that alternative options that provide non-monetised benefits to both our customers and the environment may be appropriate to meet a supply demand deficit. We will work with the Environment Agency and Ofwat to ensure that where necessary, we develop the most appropriate options for our long term interests of our business and customers. Sustaining a living Wales: We are committed to exploring further with the Environment Agency and the Countryside Council for Wales, how we can best make greater links with the developing Sustaining Living Wales approach and Natural Resource Management Planning through our draft WRMP. Page 114

119 Annex 1 Resource Developments in AMP 4 This Annex outlines the changes we have made to how resources are provided during the AMP4 period North Eryri - Ynys Mon In AMP4 a 8M scheme was identified for North Eryri Ynys Mon (NEYM). This substantial engineering scheme enables improved utilisation of resources on Anglesey and retains resources on the mainland for increased use during a drought. The scheme was modelled in detail using WRAPSim and increased DO by 10 Ml/d. It was completed in March Barmouth We completed a scheme to link Lleyn - Harlech WRZ to Barmouth WRZ, during AMP4. This scheme was in two parts: we resolved the restrictions in capacity on the raw water main between Llyn Eiddew Mawr and Rhiwgoch Water Treatment Works; and we provided additional network distribution mains from Rhiwgoch into the Barmouth WRZ, currently fed from Eithinfynydd Water Treatment Works. A statutory undertaking we gave to the Drinking Water Inspectorate at Rhiwgoch Water Treatment Works reduced its design capacity from the licenced volume of 2 Ml/d to the current maximum capacity of 1 Ml/d. Towards the end of our business plan period we embarked upon our water quality investment programme. Rhiwgoch Water Treatment Works was confirmed as a works that would be upgraded as part of this programme, and this was completed by March As such, an export from Lleyn - Harlech WRZ to Barmouth WRZ has now been incorporated within the supply demand balance to resolve forecast future deficits within the Barmouth supply area. Within our water quality investment programme, these two zones will be merged and reported as a single zone. South Meirionydd and Blaenau Ffestiniog We identified that benefits could be achieved in South Meirionydd (Afon Wnion to Llyn Cynwch) and Blaenau Ffestiniog (Afon Gam to Llyn Morwynion) WRZs by carrying out changes that would allow us to re-fill the reservoirs more effectively during the winter. These capital schemes were delivered during Ross-on-Wye During we completed mains refurbishment on the Hereford/Ross-on-Wye boundary. The Ross-on-Wye WRZ is currently expanded during the summer period to supply part of the Hereford WRZ due to water capacity constraints between Ridgehill and Aconbury Service Reservoirs (within the Hereford WRZ). Vowchurch The 2008 Draft Plan identified a peak week supply deficit within the Vowchurch WRZ. To remove this a new 4.5km, 180mm diameter main from Vowchurch was connected to the Aconbury Service Reservoir in the Hereford WRZ in Page 115

120 Whitbourne We duplicated 3.3km of main between Hope under Dinmore and Bodenham, south of Leominster, during We also undertook mains cleansing in the Leysters Service Reservoir zone, which the Risbury pumping station can supply, to complete the work to allow transfers of water from the Hereford area. The exceptional rainfall and flooding during the summer of 2007, which resulted in the temporary loss of Whitbourne Water Treatment Works, meant that this transfer could be used to restore customer supplies following the bad weather. The new system was therefore used effectively and the supply demand balance has been updated showing that the previous deficit in this zone has now been resolved. We can transfer a maximum of 0.48 Ml/d in this way. South East Wales Conjunctive Use System (SEWCUS) In place of the weir at Prioress Mill on the River Usk we have invested in additional infrastructure to enable full utilisation of the abstraction licence on the River Usk at Llantrisant by allowing the abstracted water to be transferred to Llandegfedd reservoir if required. This gave a significant increase in baseline Deployable Output of 48 Ml/d and secured supplies within SEWCUS. During 2010, due to the extreme dry weather conditions, we made a number of improvements to increase the resilience of the Pontsticill High Level area and the Rhondda and Cynon area. In the Pontsticill High Level area we have made some network improvements to allow water from Blaen-y- Cwm reservoir to be transferred to Nantybwch Water Treatment Works. In addition, transfer licences are currently being sought to enable the transfer of untreated water from Blaen-y-cwm to Lower Carno reservoir for subsequent re-abstraction and transfer to Shon Sheffrey reservoir. This will increase the resilience of the system by connecting available storage to greater treatment capacity. In the Rhondda and Cynon area, we laid a pipeline between Penderyn reservoir, which currently feeds Hirwaun Water Treatment Works and Llyn Fawr reservoir. The pipeline can be operated in both directions but requires pumps to be installed at Penderyn to transfer water to Llyn Fawr. Pembrokeshire The deficit in North Pembrokeshire was resolved during our investment programme by the extension of the network to aggregate two WRZs, North and South Pembrokeshire, thereby reducing the number of zones to 24. The scheme involved: the laying of a new 7.5km 500mm trunk main from Bolton Hill Service Reservoir to the North Bridge in Haverfordwest; and installing new pumps and refurbishing existing ones (at Corner Piece water pumping station), so that water from either Preseli Water Treatment Works or Bolton Hill Water Treatment Works can be pumped to Plumbstone Service Reservoir and onto St Davids. Page 116

121 Annex 2 Water Efficiency Activity Cistern displacement devices We offer free hippo bags to all our customers and promote this through the literature which accompanies customer bills, as well as leaflets, podcasts, website material and general customer engagement. The popularity of the Hippo Bag has continued to grow. In we provided 16,290 hippo bags to customers and in we provided 20,865, of which 3,403 were requested by household customers and 612 requested by schools. The remainder were distributed at events held by Welsh Water. In total we estimate that these displacement devices saved 0.29 Ml/d (assuming a 2.8 litre saving per device, per flush). Performance and attitudes towards these devices have been covered as part of the household water audits that have recently been completed. These identified valuable savings where the devices had been correctly installed. However, the installation rate at 59% was lower than the Ofwat quoted value of 65%. In addition, a significant proportion had been fitted in dual flush, low flush and ultra low flush cisterns and had either been subsequently removed or required repeat flushing. In an attempt to address this problem improved information has been placed on our website and is included with the material we send with the device. It remains to be seen if this helps customers correctly to identify cisterns where it is appropriate to install Hippos. Using information from 2008 water audits, the estimated total daily saving from the Hippos distributed in was around 0.32 Ml/d. For total household demand this is a negligible saving in the context of the baseline demand forecasts. However, as part of our options for water efficiency we have included a Home Visit Package option. This includes the installation of Hippo bags as one of a suite of devices/ measures. Household water audits We have historically provided water audit visits to domestic customers to advise them on water savings. These provided an excellent mechanism to educate customers on water efficiency issues and the good practice use of water throughout the home; we also provided customers with low cost devices to help them save water (including Hippo Bags). However, in we only completed 21 water audits in customers homes (at the request of customers). Therefore, due to the small water savings and the high staff cost rate involved, we no longer offer this service. Instead, we choose to promote household water efficiency via our comprehensive self-audit pack that is promoted in company literature and on our website, and which is available to customers on request. We consider that this is a much more cost effective and less intrusive method of promoting water efficiency in the home. In we distributed 7,197 water audit packs to homes with a total estimated water saving of 0.85 Ml/d. This represents a fourfold increase on the previous year. Household water audits continue to be included as intervention options as part of the Home Visit Package option for all deficit zones Commercial water audits As with the household water audits, we no longer believe that offering on-site water audits is the most effective method of promoting water efficiency in commercial premises. In we only completed 11 such audits. We continue to advertise on our website and through customer engagement the using water wisely, DIY water audits for homes, business and schools advice leaflets; overall, we consider this to be the best method to promote water efficiency. We are carrying out pilot audits in a number of commercial/ non-household properties to develop further our water audit experience and gain improved data on the realistic potential savings. This Page 117

122 approach has been concentrated initially in the North Eyri Ynys Mon WRZ and has since been expanded into the Vowchurch WRZ (identified as a deficit zone in AMP4). In June 2009 we commenced our water efficiency activities in Vowchurch sending letters and self audit packs to all non-domestic customers using over 2m 3 of water per day. We had replies from 6 farms in the area and undertook detailed on-site audits before making recommendations on improving their water efficiency. All of these farms also had flow loggers installed to monitor their levels of consumption. In , we distributed water efficiency self-audits to all schools (Primary and Secondary) in the Vowchurch WRZ followed up by a water audit at four of the schools. During we expect further savings when water efficiency devices are fitted as recommended following the audits. The audits are combined with a Capacity Buy Back option. 72 intervention option for all deficit zones Capacity Buy Back is included as an Customer education/awareness We have placed particular emphasis on our development of educational initiatives as these provide future populations with an understanding of the issues and challenges associated with water use. This is a core message in delivering the objectives of our Education Strategy Living and Learning with Water which promotes the understanding of the value of water and the vital role it plays in our everyday lives. Our educational initiatives are summarised below. We have 4 Education Centres. These are located in the Elan Valley, Cilfynydd (near Pontypridd, South Wales), Cog Moors (near Cardiff) and Alwen, where every one of the 14,000 visitors each year receives water conservation messages. To date over 124,000 visitors have visited one of our 4 centres. To enhance the messages delivered at the centres, a water efficiency lesson has been developed to inform pupils about the responsible use of water in both schools and in the home. This lesson was developed by teachers and is linked to the National Curriculum to support sustainability and Global Citizenship within schools. We have developed a water efficiency pack to help schools use water more efficiently. The bilingual pack called Water is Cool Respect it is distributed to schools achieving Silver-level accreditation through the Eco-Schools programme in Wales. To date almost 1,000 schools have received the pack. The pack illustrates how important water is to each of us and helps children to understand its value and the vital role it plays in our everyday lives. It contains interesting facts on how to use water wisely and schools can use the pack as part of the Eco-Schools programme, or as part of an independent water conservation project. As one of the main partners in the re-launch of the Welsh Eco-Schools project we have contributed to the water section of the Eco-schools Handbook. Schools have to complete and be assessed on 9 elements of the programme to become a Green Flag school. Water efficiency is one of these elements. There are over 1,300 schools registered with Eco-Schools in Wales. In March 2007 we launched our Be Waterwise campaign to encourage customers to use what they need, but not to waste it. The launch took place at Cilfynydd Education Centre with representatives from Keep Wales Tidy, the Consumer Council for Water and from schools staff and pupils. We have supported the development of a number of educational resources. These include Waterworld Explorers an interactive multimedia resource aimed at Key Stage II (7-11 year olds) 72 Capacity Buy Back provides an incentive through bill rebates. The scheme works by providing companies with a reimbursement on their water bill based upon the water savings made through the implementation of a water efficiency measure. The bill rebate incentive saving is 0.40 per litre per day ( 400,000 per Ml/d) up to a maximum of 50% of the cost of the water efficiency measure. Page 118

123 which has a module entitled How is water used? which demonstrates how water is used in the home and garden and explains the measures that can be taken to reduce water usage. Waterworld Explorers has been well-received by children and teachers alike and has been distributed to over 1,600 primary and secondary schools. We continue to work in partnership with Techniquest, the science discovery centre based in Cardiff, which receives over 200,000 visitors each year. We have developed an exciting display promoting water efficiency. This uses jets of recycled water, which children can direct and fire, to show the relationship between efficient and wasteful practices, for example, sprinkler and hosepipe use. In partnership with the UK Education forum, representatives from 13 UK water companies have contributed to the development of 2 water efficiency websites called The Water School and The Water Family. The sites were developed by Crystal presentations and are aimed at encouraging pupils and families to be more sustainable with water both in school and at home. Both sites were trialled by teachers and linked to the National Curriculum. During the last academic year the following statistics were recorded at each site: Water in the School Website 31,394 hits The Water Family Website 198,558 hits To coincide with World Water Day we will be launching a new resource to promote water efficiency in schools. The pack has been endorsed by Keep Wales Tidy and it will assist us in achieving high accreditation via the UK Water Industry Research guidelines from Ofwat. Schools will be encouraged to demonstrate water efficiency good practice in school and record their evidence. The evidence will be collated by us to show behaviour changes within the school and in the home. The pack has also been available on-line since April This will allow schools to register with Welsh Water and receive quarterly newsletters updating them with water efficiency tips or any other key business messages. This will again take our level of engagement from medium to high in the UK Water Industry Research guidelines as we will ensure ongoing contact with the customer. Our recently re-launched company website includes several Living and Learning webpages which include a large amount of child friendly material on the business as well as water efficiency tips and challenges for pupils, including an online water efficiency calculator and home audit. The site will enhance children s awareness on sustainable water usage and includes an area where children can complete a home audit and enter into a termly competition draw. The site enable adults and children to feed back any comments on visits to the Education centres or on resources provided by Welsh Water. In 2010 Ofwat confirmed that 30% of soft targets could be counted against our new 1.3 Ml/d target. To date approximately 90% of the target is being achieved through education. The focus on achieving maximum results is our main driver over the next 4 years. To trial our Outreach Programme on water efficiency we took part in a pilot at 30 schools in Blaenau Gwent. The pilot involved a whole school assembly focusing on water efficiency followed by workshops in the classroom and school audit. The pupils were then tasked with a toothbrush challenge where they recorded how many times they turned the tap off when brushing their teeth, thereby encouraging water savings and changing behaviours. The data was returned and recorded for the June Return. Due to the success of this pilot we have continued delivering water efficiency outreach in targeted areas working closely with Aqualogic, our preferred suppliers on water efficiency. To date 1,073 pupils have taken part in the challenge. Ofwat are currently considering raising the maximum proportion of the water efficiency target that can be met by soft measures from 30% to 40%. Page 119

124 It is very hard to quantify the benefits of our range of promotional and educational activities. However, the feedback received provides strong encouragement to continue our efforts in these areas. Successful implementation of many water efficiency measures relies on customers understanding the issues and responding in a socially responsible way. Because of this, the continuing development of our promotional and educational activities is considered to be an essential component of our water efficiency strategy. Finally, we also promote a Don t crack up, wrap up campaign which provides practical advice and information that would avoid the inconvenience and expense that a frost damaged pipe can cause. The advice was made available through publicised literature and a podcast published on our website. Other water efficiency initiatives Water efficiency has considerable prominence on our company website and is continually reviewed and updated in accordance with our water efficiency activities. We work closely with the National Trust to deliver water efficiency messages on organised theme days and have developed a water efficient demonstration garden within one of the National Trust sites that provides key awareness of water efficiency issues and solutions to visitors. Finally, we have launched a Four minute shower campaign which was endorsed by the then Environment and Sustainability Minister Jane Davidson AM and which encourages customers to limit the time spent using the shower. The campaign has its own website and has already proved popular. Metering Our policy is to: provide a free meter option scheme; meter new households and non-households compulsorily; and have a programme to meter existing unmeasured non-households, where practical. Water butts/ composters/ trigger hoses We offer subsidised water butts to all our customers and help promote the efficient use of water in the garden through customer engagement ( message areas of bills and leaflets provided to customers during events and press releases) and advice on our website. In we installed 658 water butts in households and distributed a total of 1,116. In we distributed 310 water butts, with an estimated total saving of Ml/d. Water butts and trigger hoses are included as intervention options (as part of the Home Visit Package option for trigger hoses) for all deficit zones. Retrofitting toilets, showerheads More complex retro-fitting of water saving devices such as taps, toilets and showers were not identified as the optimal solutions to resolve deficits during our programme and therefore no savings are attributed within the baseline demand forecast. However, retrofitting devices continues to be included as an option for all deficit zones as part of the Home Visit Package and the Non-Household Visit option. Collaborative Research and Development Page 120

125 The best opportunity to encourage more water efficient fittings is at the time, for example, when existing bathrooms are being refurbished or when new houses are being built. The additional cost of fittings providing improved water efficiency will normally be negligible in comparison to the cost of the installation. We are currently working with housing developers on proposals to compare the water use of standard houses adopting improved water efficiency standards, against similar phased non-water efficient houses. The aim is not to create expensive eco-houses, but rather to investigate what can be achieved at minimum additional cost to enhance the performance of standard homes. Assumptions regarding the increasing penetration of dual and low-flush cisterns and more water efficient washing machines and dishwashers are built into the forecasts of per capita consumption in line with the obligations now required of developers in the Code for Sustainable Homes. Additionally, assumptions are also included for the replacement of appliances as part of home improvements in older properties. Supply pipe repair/ replacement Our experience is that proactive action to tackle leakage on customers supply pipes is currently the most cost effective area of water efficiency for investment. We have applied a consistent and proactive policy on customer leakage since Under this policy we provide free leak detection and repair service for the first leak on a customer s supply pipe. In there were 438 supply pipes replaced free under this policy and 1,720 repaired. The estimated average savings from our free supply pipe repair and replacement activities in is 1.31 Ml/d. Our assessment of Supply Pipe Leakage follows the Bursts and Background Estimation (approach. Work is still progressing nationally to improve the estimation of SPL; we continue to improve the estimated volume of Supply Pipe Leakage, together with research into ways to identify leak run times. The initial (pre-maximum Likelihood Estimation) estimate of regional Supply Pipe Leakage for unmeasured properties in was 20.1 l/prop/d. The equivalent figure for measured properties was 16.4 l/prop/d. Also included in our demand forecasts is an estimated 1.18Ml/d of Supply Pipe Leakage from void properties. In the total operational expenditure on the customer Supply Pipe Leakage initiative was 760k. This results in a unit cost of 1.59 per m 3. Although this is similar to the national figure quoted by Ofwat of 1.21 per m 3 for water efficiency activities, we believe that this activity has a much higher level of confidence in the level of savings achieved than other water efficiency activities. Page 121

126 Annex 3 Sites impacted by Habitats Review of Consents Descriptions of the individual Special Areas of Conservation and our licences subject to the the Environment Agency s Review of Consents process within them are detailed below and shown in Figures A3.2, A3.3 and A3.4; an overview map showing the relationship between Welsh Water abstractions and the European protected sites is shown in Figure A3.1 Figure A3.1 Special Areas of Conservation and Sites of Special Scientific Interest in our supply area and the locations of Welsh Water s abstractions Page 122

127 South East Wales River Wye Special Area of Conservation The River Wye has been designated a Special Area of Conservation due to the presence of the following features 58 Atlantic Salmon, Allis Shad, Twaite Shad, Brook Lamprey, River Lamprey, Sea Lamprey, Bullhead, Otter, Atlantic Stream Crayfish, Ranunculus, Transition Mires and Quaking Bogs. Within the River Wye Special Area of Conservation we have thirteen abstraction licences that have been subject to the Agency s review of consents process: River Wye at Builth Wells abstracted water is treated locally at Builth Water Treatment Works and supplies the remainder of the Elan Builth WRZ. River Wye at Llyswen abstracted water is treated locally at Llyswen Water Treatment Works and supplies the entirety of the Llyswen WRZ. River Lugg at Byton - maintained as an emergency source for use locally within the Pilleth WRZ. Pilleth boreholes abstract from the gravels of the River Lugg. The water is treated at the nearby Pilleth Water Treatment Works and supplies the entirety of the Pilleth WRZ. Dunfield boreholes abstract water from the gravels of the River Arrow. The water is treated at the nearby Dunfield Water Treatment Works and supplies the immediate localised area of the Hereford WRZ. Midsummer Meadow well - maintained as an emergency source for use locally within the Hereford WRZ. River Wye at Hereford abstracted water is pumped a short distance to Broomy Hill Water Treatment Works and supplies the majority of the Hereford WRZ. Vowchurch boreholes - abstract water from the gravels of the River Dore. The water is treated at the nearby Vowchurch Water Treatment Works and supplies the entirety of the Vowchurch WRZ. River Wye at Mayhill located in Monmouth, water is pumped a short distance to Mayhill Water Treatment Works and supplies the majority of the Monmouth WRZ. Buckholt springs water is treated at the adjacent Buckholt Water Treatment Works and supplies the remainder of the Monmouth WRZ. Alton Court borehole - maintained as an emergency source for use within our Ross-on-Wye WRZ. Rogerstone Grange borehole - abstracted water is treated locally at Rogerstone Water Treatment Works and supplies locally within the south western area of the SEWCUS WRZ. River Wye at Monmouth ( Wye Transfer ) - located approximately 500m upstream of the Mayhill intake, water is transferred out of the catchment across to Court Farm Water Treatment Works and is used to supply parts of the SEWCUS WRZ. 58 Site Issue Briefing (Countryside Council for Wales, 2002) Page 123

128 The Elan valley reservoirs have also been subject to the consents review process as they are intrinsically linked to the operation of our Monmouth abstraction licence. Elan s two main functions are to supply water to Birmingham via the Frankley Reservoirs (to Severn Trent Water) and to regulate the River Wye to support abstraction in its lower reaches. There is a small direct supply to Elan Water Treatment Works which supplies the majority of the Elan Builth WRZ. Figure A3.2 - Welsh Water s abstractions in South East Wales subject to the Review of Consents process River Usk Special Area of Conservation The River Usk has been designated as an Special Area of Conservation due to the presence of the following features 58 : Atlantic Salmon, Allis Shad, Twaite Shad, Brook Lamprey, River Lamprey, Sea Lamprey, Bullhead, Otter, Ranunculus. Within the River Usk Special Area of Conservation we have four abstraction licences that have been subject to the consents review process: Brecon boreholes this licence abstracts water from the gravels of the River Usk. The water is treated at the nearby Brecon Water Treatment Works and supplies the majority of the Brecon-Portis WRZ demand. River Usk at Brecon this river intake is licensed for the same quantity as the boreholes (aggregated licence). Operationally this abstraction point is not frequently used. Page 124

129 River Usk at Rhadyr (Prioress Mill) - water is abstracted and pumped to Llandegfedd reservoir before being treated at Sluvad Water Treatment Works. This water is then supplied in the SEWCUS WRZ. River Usk at Llantrisant the abstracted water can either be pumped to Llandegfedd reservoir or direct to Court Farm Water Treatment Works; via both routes the water is treated and supplied in the SEWCUS WRZ. The operation of Usk reservoir has also been reviewed by the Environment Agency under the consents review process due to the reservoir s ability to be used to regulate the River Usk. Currently its two main functions are a small direct supply to Portis Water Treatment Works which supplies a localised area of the Brecon-Portis WRZ and a larger export of water to Bryngwyn Water Treatment Works, within the Tywi CUS WRZ, for localised supply within the area. South West Wales Cleddau Rivers Special Area of Conservation The Cleddau Rivers have been designated as an Special Area of Conservation due to the presence of the following features 58 Otter, Bullhead, River Lamprey, Brook Lamprey, Sea Lamprey, Ranunculus, Alluvial forests with Alnus glutinosa and Fraxinus excelsior, Active Raised Bogs. Within the Cleddau Rivers Special Area of Conservation we have four abstraction licences that have been reviewed by the Agency: Eastern Cleddau at Pont Hywel - abstracted water is transferred westwards to Preseli reservoir (which feeds Preseli Water Treatment Works) which supplies the north of the Pembrokeshire WRZ. Eastern Cleddau at Canaston abstracted water is transferred south-west to Bolton Hill Water Treatment Works for treatment and supply but is also delivered to the large industrial users in the Pembrokeshire WRZ. Western Cleddau at Crowhill - abstracted water is transferred to Bolton Hill Water Treatment Works for treatment and supply in the south of the Pembrokeshire WRZ. Afon Syfynwy a non-consumptive abstraction which is used to supply a fish farm this is currently not operational. River Tywi Special Area of Conservation The River Tywi has been designated as an Special Area of Conservation due to the presence of the following features 58 : Allis Shad, Twaite Shad, Brook Lamprey, River Lamprey, Sea Lamprey, Bullhead, Otter. Within the River Tywi Special Area of Conservation we have two abstraction licences plus the operation of Llyn Brianne reservoir that have been reviewed by the Agency: River Tywi at Manorafan - the intake is generally not used due to its high operational costs but when it is, the abstracted water is transferred to Bryngwyn Water Treatment Works for treatment and is supplied to the central section of the Tywi Gower WRZ. Page 125

130 River Tywi at Nantgaredig - abstracted water is transferred eastwards to the Lliw reservoirs which feed Felindre Water Treatment Works. The treated water supplies the conurbations of Swansea, Neath and Llanelli and further east into Bridgend, Vale of Glamorgan and Llynfi Valleys. Llyn Brianne reservoir its main function is to release water to support abstraction at Nantgaredig. River Teifi Special Area of Conservation The River Teifi has been designated as a Special Area of Conservation due to the presence of the following features: Atlantic Salmon, Brook Lamprey, River Lamprey, Sea Lamprey, Bullhead, Otter, Luronium, Litorella, Ranunculus. Within the River Teifi Special Area of Conservation we have one abstraction licence that has been subject to this consents review process: River Teifi at Llechryd - abstracted water is transferred a short distance to Llechryd Water Treatment Works from where it is delivered to the south and west of the Mid & South Ceredigion WRZ. Page 126

131 Figure A3.3 - Welsh Water s abstractions in South West Wales subject to the Review of Consents process Page 127

132 North Wales Afon Gwyrfai a Llyn Cwellyn Special Area of Conservation The Afon Gwyrfai and Llyn Cwellyn have been designated as a Special Area of Conservation due to the presence of the following features: Atlantic Salmon, Otter, Luronium, Litorella, Ranunculus. Within the Afon Gwyrfai and Llyn Cwellyn Special Area of Conservation we have two abstraction licences that have been reviewed by the Environment Agency as part of its review of consents process: River Gwyrfai at Nant Mills this is located approximately 1km downstream of the outlet from Llyn Cwellyn. This site is no longer operationally used. Direct abstraction from Llyn Cwellyn where the water is transferred 2km downstream to Cwellyn Water Treatment Works which supplies the local area in and around Caernarfon within the North Eyri Ynys Mon WRZ. Migneint-Arenig-Dduallt Special Area of Conservation The Migneint-Arenig-Dduallt has been designated as a Special Area of Conservation due to the presence of the following features: Blanket Bog, European Dry Heaths, Northern Atlantic Wet Heaths, Natural Dystrophic Lakes and Ponds, Lakes (Oligotrophic to mesotrophic) standing waters, Old sessile oak woods. Within the Migneint-Arenig-Dduallt Special Area of Conservation we have one abstraction licence that has been subject to the Review of Consents process: Direct abstraction from Llyn Morwynion where the water is transferred 1km north-west to Garreglwyd Water Treatment Works; the only source of water for the Blaenau Ffestiniog WRZ. Rhinog Special Area of Conservation Rhinog has been designated as a Special Area of Conservation due to the presence of the following features: Old sessile oak woods, Blanket Bog, European Dry Heaths, Alpine and subalpine heaths, Depressions on peat substrates, Northern Atlantic Wet Heaths, Lakes (Oligotrophic to mesotrophic) standing waters, Floating water-plantain (Luronium). Within the Rhinog Special Area of Conservation we have one abstraction licence that has been reviewed by the Environment Agency: Direct abstraction from Llyn Eiddew Mawr - abstracted water is transferred 6km south-west to Rhiwgoch Water Treatment Works which supplies the southern section of the Lleyn Harlech WRZ in and around Harlech. Page 128

133 Llwyn Special Area of Conservation Llwyn has been designated as a Special Area of Conservation due to the presence of the following features: Alluvial forests with Alnus glutinosa and Fraxinus excelsior. Within the Llwyn Special Area of Conservation we have one abstraction licence that has been subject to the consents review process: Llwyn Isaf boreholes water is abstracted from the Clwyd sandstone aquifer and is used to augment flows in the River Clwyd. During a drought, the abstracted water is treated locally and put into direct supply. Figure A3.4 - Welsh Water s abstractions in North Wales subject to the Review of Consents process Page 129

134 Annex 4 Option Ranking Figure A4.1 Ranking of Feasible Options, Pembrokeshire WRZ, by average incremental social cost (p/m 3 ) Page 130

135 Figure A4.2 - Ranking of Feasible options, Brecon - Portis WRZ, by average incremental social cost (p/m 3 ) Page 131

136 Figure A4.3 - Ranking of Feasible options, South East Wales Conjunctive Use System (SEWCUS) WRZ, by average incremental social cost (p/m 3 ) Page 132

137 Target Headroom % Target Headroom % Annex 5 Charts illustrating the contribution of each headroom uncertainty sub-component to the overall headroom uncertainty in each water resource zone. North Eryri Ynys Mon Annual average Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year North Eryri Ynys Mon Critical period Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year Page 133

138 Target Headroom % Target Headroom % Clwyd Coastal Annual average Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year Clwyd Coastal Critical period Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year Page 134

139 Target Headroom % Target Headroom % Alwen Dee Annual average Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year Alwen Dee Critical period Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year Page 135

140 Target Headroom % Target Headroom % Bala Annual Average Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year Bala Critical Period Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year Page 136

141 Target Headroom % Target Headroom % Tywyn Aberdyfi Annual average Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year Tywyn Aberdyfi Critical period Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year Page 137

142 Target Headroom % Target Headroom % Blaenau Ffestiniog Annual average Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year Blaenau Ffestiniog Critical period Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year Page 138

143 Target Headroom % Target Headroom % Barmouth Annual average Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year Barmouth Critical Period Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year Page 139

144 Target Headroom % Target Headroom % Lleyn Harlech Annual average Headroom Components 100% 80% 60% 40% D3 D2c D2a D1 S8 S6 20% 0% Forecast Year Lleyn Harlech Critical period Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year Page 140

145 Dyfryn Conwy Annual average Dyfryn Conwy Critical period Page 141

146 Target Headroom % South Meirionydd Annual average South Meirionydd Critical period Headroom Components 100% 90% 80% 70% 60% 50% 40% 30% D3 D2c D2a D1 S8 S6 20% 10% 0% Forecast Year Page 142