Interruption to Supply - Bishops Stortford - CM23
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Affinity Water Limited
Tamblin Way Hatfield
Hertfordshire AL10 9EZ
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13 July 23
Affinity Water meet key targets for leakage reductions, water quality and environment programme.
Two extreme weather events in 2022/23 and inflationary pressures impacted the business in other performance areas.
The company is on track to meet most of its five-year performance commitments for the 2020 – 2025 period.
We have today published our Annual Report and Financial Statements for the year ended 31 March 2023, the third year of the 2020-25 price control period (Asset Management Plan 7; ‘AMP7’) on our website: www.affinitywater.co.uk/library
It has been a challenging year with extreme weather events and inflationary pressures having an impact financially and on some key performance commitments.
However, we invested over £127 million in our network over 2022/23 to improve our performance and made notable achievements in several key performance areas.
We are pleased to report that we have beaten our leakage target for the year and have reduced leakage by 15.8%. This means we are well on track to deliver our five-year 20% reduction target by 2025. Reducing leakage is incredibly important to us, our customers, and the environment.
Providing high quality water and taking care of our environment is the corner stone of Affinity Water’s purpose. We continue to maintain our upper quartile Compliance Risk Index ranking in the water industry, which is the metric we use to measure water quality.
Affinity Water is a provider of drinking water only, this means we do not manage the sewerage network. However, we are passionate about the role we play in helping to improve our rivers and the wider environment. We have met all our targets under the Water Industry National Environment Programme (WINEP) – completing various river restoration and habitat improvement schemes. We are also on track to meet our five-year target to reduce the amount of water we take from chalk groundwater by 36 million litres a day by 2025 and we have started construction on a new treatment facility, which will allow us to do this. This will mean that we would have reduced abstractions from chalk groundwater by 100 million litres a day since the 1990s, helping to leave more water in the environment to sensitive habitats, such as chalk streams.
The last couple of years have presented several ‘once in a generation’ external challenges that have had an impact on businesses across the world, and we have not been immune to this.
The Covid pandemic transformed consumption patterns for water. We continue to see increased water use versus pre-pandemic (impacting our costs and operational metrics) despite extensive activity focussed on demand reduction.
Energy prices have risen sharply over the last year. The treatment and distribution of water to our 3.8million customers makes energy one of our biggest costs. Our pro-active hedging strategy for energy has protected us from the worst impacts, locking in prices to 2025. Nevertheless, these hedges are at higher prices than anyone could have planned for putting pressure on costs.
With inflation rising at its fastest rate in 40 years our customers are being impacted by the ongoing cost of living crisis. We continue to offer support for customers who are struggling to pay their bills and now have over 97,000 customers receiving help through our social tariff schemes. Higher inflation also increases the costs we incur to keep our network running and continue to supply customers with a reliable, high-quality supply of water.
Our region experienced two extreme weather events in 2022/23 with record breaking summer temperatures of 40c and a freeze/thaw event in December 2022.
More frequent and intense heatwaves significantly increase the demand for water and put strain on the network. The dry ground conditions experienced in last summer’s drought, caused ground movement, which resulted in many more bursts than usual. Our network was put under further strain in December 2022 due to a sudden thaw following weeks of sub-zero temperatures. These conditions cause pipes to expand and contract, leading to an increase in bursts.
Ultimately this has impacted on our Interruptions to Supply performance commitment and we did not meet the target for this year, following our industry leading performance in the prior year. However, underlying performance was strong and if it were not for the extreme weather events, we would have surpassed last year’s performance.
The significant demand for water in the summer period, coupled with post covid norms on water use has also impacted our Per Capita Consumption (PCC) target.
PCC is the term we use to measure how much water each of our customers use every day. Reducing customer demand for water now and for the future is important. It plays a key part to ensuring a long-term sustainable supply of water for our communities, whilst leaving more water in the environment. This is alongside significant reductions in leakage and building new infrastructure for new sources of water, such as reservoirs and water transfers.
During the pandemic, water use changed dramatically after the first lock down was introduced. In 2020/21, PCC in our area rose to an average 171 litres from a pre covid average of 155 litres per person. In 2022/23, PCC was 160 litres per person per day (based on a 3-year average) and we have not met our target in this area, which was set before the pandemic occurred.
We will continue to work in collaboration with customers in this area to bring demand down. We now have over 240,000 customers signed up to our industry leading water saving campaign, Save Our Streams. Our teams also carried out over 20,000 free home water efficiency checks and installed over 50,000 meters. In 2023, we also announced plans to trial a new structure of charges for a group of pre-selected customers to make water bills more affordable and encourage water saving. Our ‘WaterSave’ trial will assess whether the new charging system is fairer and more affordable, including a provision for free water allocation.
In 2022/23, we published our 50-year action plan for water, known as our draft water resources management plan. Our plan aligns to the first ever regional plans for water resources and details the activities we will carry out to provide a sustainable supply of water for a growing population, adapt to the challenges of climate change, and take care of our environment. Our teams also produced our draft Business Plan for the 2024 price review, which details the commitments and the investment we will make between 2025 – 2030. We also updated our Net Zero plans to ensure we meet our target for Net Zero from operational emissions by 2030. We have solar farms at two of our operational sites, which generated 1,641,000 kWh and saved 317 t CO2e in 2022/23. We are continuing our renewables programme and this year we have been looking at how we can integrate solar installations with some of our below ground reservoirs and deliver further solar sites in 2023/24.
Affinity Water CEO, Keith Haslett commented: “Despite the difficulties posed by inflation and extreme weather, we made significant progress in reducing leakage to the lowest ever levels we’ve had as a company, maintaining one of the best water quality scores in the industry and delivering on our environmental commitments. We are confident in our ability to meet most of our five-year performance commitments by 2025. Furthermore, we are well-prepared to enter the next asset management period (2025-2030) in a strong position, to continue delivering high quality, reliable supply of water to our customers, whilst taking care of our environment.”
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