Water UK

How the water industry is managing its contribution to climate change

Current position	Water quality legislation	Water conservation
Renewable energy	Other regulatory issues	Adaptation

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The current position

The water industry is energy-intensive and contributes around 1% of national GHG emissions. The industry recognises the effects of its activities and the need to quantify, manage and reduce this impact, and has proactively undertaken collaborative work to develop industry tools to measure and therefore manage both operational and embodied carbon.

Water is also one of the first sectors in the UK to explicitly include carbon in business planning. Carbon mitigation activities across the industry include:

 • Reducing energy use (electricity and other fuels) through efficiency measures
 • Water efficiency and leakage control
 • Research and development: research into alternative low-carbon technologies; studies into 'soft' engineering solutions to achieving water quality standards
 • Embedded renewable power generation
 • Purchase of green power and good quality Combined Heat and Power (CHP)
 • Investment plans that include whole-life carbon impacts and costs
 • Work with the supply chain to encourage low-carbon behaviour

Despite these efforts, the industry is on a rising emissions trajectory owing to the demands of growth and more stringent quality obligations that require increasingly energy-intensive treatment technologies. This could be exacerbated by the requirements of the Water Framework Directive (WFD).

Achieving substantive change in the industry over the next decade and beyond will require a new approach to the regulatory regime in which we operate.

This paper highlights the key issues and challenges in achieving absolute emissions reduction, and proposes solutions requiring collaborative action between the water industry, government, regulators and others.

Potential benefits of the proposals

Water quality
Further, more sustainable improvements in the water environment, achieved at lower cost and with lower GHG emissions

Water conservation
Reduced water wastage; saving energy and carbon across the industry and in homes and businesses

Renewable energy
Increased UK capacity; exploitation of least-cost solutions for waste disposal; insulation against energy price volatility and lower water charges

Other regulatory benefits
Increased effectiveness of the Shadow Price of Carbon, to drive low-carbon investment across all sectors; improved coordination of regulatory policies; enhanced sustainability of land management

Key issues and commitments

The water industry is committed to addressing each of the following issues which affect our ability to reduce carbon emissions. Each of these issues is discussed in more detail below; key stakeholders and actions relating to this work are identified in Table 1.

Water quality legislation

1) Water Framework Directive (WFD)
We will work with government and environmental regulators to integrate carbon costing into solution assessment and to include the 'polluter pays' and 'control of pollution at source' principles into WFD River Basin Management Plans (RBMPs).

2) Integrated Catchment Management
We will work with government and environmental regulators to agree a new abstraction and wastewater consenting regime which sets standards that take into account local environmental need and carbon impact.

Water conservation

3) Water efficiency
We will work with economic regulators to ensure water efficiency is adequately funded in order to reduce water wastage and hot water use in the home. We will work to raise awareness of the link between water use and carbon emissions. We will engage with energy companies, water efficiency device manufacturers and suppliers as appropriate to ensure the water-energy-carbon message is conveyed to consumers to encourage behavioural change.

4) Leakage
We will aim to manage leakage at a sustainable level and work with partners to improve our understanding of the impacts of leakage and establish low-cost identification and repair technologies.

Renewable energy

5) Embedded renewable energy generation
We will work with economic regulators to agree alternative criteria for the inclusion of wind and other renewable technologies within the regulated business.

6) Incentives for Anaerobic Digestion (AD)
We will work with the Department of Energy and Climate Change (DECC) to promote fairer allocation of Renewable Obligation Certificates (ROCs) for biogas from anaerobic digestion under the Renewables Obligation (RO), to ensure investment in this technology continues to be sufficiently incentivised.

7) Co-digestion of putrescent waste
We support the government’s view that our sewage treatment asset base constitutes an ideal foundation for the construction and operation of this type of technology. We will work with government and environmental regulators to address technical and regulatory barriers to large-scale co-digestion projects.

8) Carbon accounting for renewable energy
We will work with government to establish a fairer means of accounting for the carbon emissions from renewable energy generated or purchased, and consumed by industry assets where ROCs are claimed.

Other regulatory issues

9) Carbon Reduction Commitment (CRC)
We will work with government and regulators to understand the implications of the CRC. We will communicate to customers and stakeholders to ensure that they are aware of the cost pressures the mechanism will exert on the sector.

10) Shadow Price of Carbon (SPC)
We will support government to clarify constituent elements of the SPC to ensure consistency in business planning.

11) Carbon sequestration
We will undertake research to increase confidence in data to support the inclusion of carbon sequestration initiatives within company carbon accounting.

Climate Change adaptation

Whilst the focus of this paper is on mitigation (adaptation is covered by a separate position statement), it is worth noting that a number of water industry actions detailed here are beneficial to both mitigation and adaptation.

Examples include the promotion of water efficiency and leakage reduction, and the work the industry is doing to reduce surface water flows to sewers through effective catchment and surface water management, working in collaboration with local authorities, the Highways Agency and the Environment Agency. Sustainable Urban Drainage Systems (SUDS) represent a win-win solution, reducing flood risk as well as the energy required for pumping and treatment.

Mitigation: detail of key issues and suggested actions

Mitigation: the detailed position (pdf)
(includes Table 1)

Table 1 Mitigation: water industry key issues, identified stakeholders and suggested actions (pdf)

Conclusion

There is a clear need for a more joined-up approach by government and regulators on policy issues around incentives and mechanisms for carbon reduction, renewable generation and green electricity. In order to establish a regulatory framework which is supportive of climate change mitigation in the water industry, we are keen to work together with government and our regulators to resolve issues and move towards a more sustainable footing, making a full contribution to national efforts on carbon mitigation.

Contact: Bruce Horton