Utility Week

20 | AUGUST 2021 | UTILITY WEEK Policy & Regulation RIIO-ED2: Interview Analysis Has Defra fumbled the ball on water efficiency? Many in the water sector view the government's long-awaited announcement on water efficiency measures as a missed opportunity to tackle a pressing problem. F ollowing a 2019 consultation on water efficiency, the Department for Environ- ment, Food and Rural Affairs (Defra) announced measures to support water effi- ciency in homes including the introduction of a mandatory water label on household and business products. However, for new- build homes the department chose to make new standards optional. When environment secretary George Eus- tice issued his long-awaited statement on water efficiency on 1 July, he endorsed just one of the three key recommendations that emerged from the consultation on water efficiency. "Announcements on water efficiency don't come around too oˆen," Daniel Johns, head of public affairs at Anglian Water, says. "The announcement was a missed opportu- nity to set out the full package of policies we need. It's clear from Defra's own summary of consultation responses and call for evi- dence that the case to do all three measures together was overwhelming." Delight at the government-backed water label is combined with disappointment that it was not accompanied by tighter building regulations and minimum product stand- ards, the other two elements that many regard as key if the government is to hit its target of reducing daily per capita water con- sumption to 110 litres per person by 2050. Local authorities will be "encouraged" to adopt optional minimum building stand- ards to increase the water efficiency of new builds in water-stressed areas. From 2022 a roadmap will be developed for greater water efficiency in new-builds, including exploring revising building regulations. Johns says the message is clear from the steering group for the UK Water Efficiency Strategy, which he chairs, that all three measures need to be working in combina- tion to have the biggest impact on water con- sumption between now and 2050. "The government has set a target to get to an average of 110 litres per person per day by 2050 but this announcement falls short of the policies we need to get there." He says that having a water label would make it easy to tighten building regulations and impose product standards. "You just have to change building regula- tions to state that developers can only fit A or B-rated appliances, taps and showers in new homes. That would simplify the system for housebuilders and create a level play- ing field, removing the ambiguity that exists at the moment. Product standards would be easy too, by preventing the most waste- ful products, like a G-rated dishwasher, being sold." A study by Artesia showed that a water label by itself would reduce household con- sumption by 13 litres per person per day, but including minimum product standards would double that to 27 litres. "The combined package we need is good for customers and good for the environ- ment," Johns says. "I hope the announce- decision-making and heads off questions about conflicts of interest. "Why was the DSO model put forward in the first place? It was because the regula- tor, the public, believed that all we want to do as a DNO is put copper in the ground, to reinforce the network and increase the asset base because it adds value to the network. "If we need to reinforce the network, and there's no incentive to do anything else, then that is what we would do. But an independ- ent DSO can go to the market and find alter- native solutions, such as a battery, to address the capacity needed which might also be useful to the wider system. "We agree that there should be separation of the decisions on flexibility and reinforcing the network. It should be independent, so let's do that from the start." Alli adds that there is a wider role for the DSO in terms of local planning functions, helping to bring together wider stakeholders and offer impartial advice. UKPN has com- mitted to publishing a DSO work programme each year to keep track of progress. But, if transparency is key to UKPN's approach, why did it decide to publish only an executive summary rather than the fully costed business plans made open by the other DNOs? Scarsella says: "We don't believe that placing a 200-page document on our website is meaningful customer engage- ment. We have done extensive customer research and stakeholder engagement and there is more coming. "Ultimately, this is a competitive process. We will publish our full plan in December, when Ofgem requires us to do that." Scarsella acknowledges that UKPN's approach differs from other DNOs and says he "copped some criticism" in ED1 for not going with the flow but insists "asking for more money doesn't show ambition". He is confident that UKPN is agile enough to respond if demand requires it to increase investment. However, he stresses that companies can only be fleet of foot if the regulator responds accordingly. "The critical test is over the next few months. We want the uncertainty mecha- nisms now to crystallise and Ofgem needs to be agile. All indications are that they will be but the onus is very much back on them." James Wallin, editor To read the full interview with Basil Scarsella, visit: https://utilityweek.co.uk/scarsella-on- ed2-asking-for-more-money-doesnt-show- ambition/ continued from previous page

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