Potable Water and Sewerage - UK - April 2015
“The estimated cost of implementing the Water Framework Directive (WFD) is around £30 billion over 43 years, of which around 40% will be accounted for by water companies’ direct infrastructure and management spending. The WFD will continue to be a key driver for capital investment in the water and sewerage industry, with companies also beginning to look at technologies that offer the best solution to implementing the directive.”
– Claudia Preedy, Industrial Analyst
This report will explore the following key questions facing the UK water and sewerage industry:
- What are the key drivers for capital investment in the water and sewerage industry?
- What have been the capital expenditure patterns by individual water and sewerage companies during the last five years?
- Is there a shift from capital project investment towards asset maintenance?
- How do the changes in the regulatory environment for the Asset Management Period 2015-20 (AMP6) affect the industry's approach to capital investment?
- What are water and sewerage companies' spending proposals for AMP6?
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Table of contents
Executive Summary
- The market
- Capital expenditure tends to be cyclical and determined by the five-year spending periods
- Few major capital projects undertaken during AMP5 (2010-15)
- Figure 1: UK capital expenditure on water and sewerage services, 2009/10-2013/14
- Non-infrastructure maintenance spending dominates sewerage capital expenditure
- Non-infrastructure maintenance spending accounts for nearly 40% of water-related capital expenditure in 2013/14
- Figure 2: Analysis of sewerage capital expenditure in England and Wales by water and sewerage companies, by type, 2013/14
- Figure 3: Analysis of water capital expenditure in England and Wales by water and sewerage companies, by type, 2013/14
- Move towards total expenditure in AMP6 2015-20 to reduce bias towards capital programmes
- Shift in industry focus towards asset management and maintenance
- Total capital expenditure projected to reach £23.4 billion during AMP6
- £4.2 billion Thames Tideway Tunnel to represent largest capital project over next decade
- Figure 4: Capital expenditure in the water and sewerage industry during AMP6 in England & Wales, 2015/16-2019/20
- Market factors
- Water Framework Directive (WFD)
- Urban Waste Water Treatment Directive (UWWTD)
- Figure 5: Sewerage treatment enhancement expenditure driven by UWWTD in England & Wales, 1990-2015
- Water retail market to open up to all business customers in England & Wales in 2017
- Companies
- What we think
Key Insights
- What are the implications of the Water Framework Directive for the UK water & sewerage industry?
- What does the shift towards total expenditure (Totex) and long-term outcomes in AMP6 mean for the industry?
- Are companies forming more long-term relationships with their supply chain and delivery partners?
Introduction
- Definitions
- Methodology
- Abbreviations
- Market positioning
UK Economy
- Overview
- Inflation
- Interest rates
- Consumer spending
- Business investment
- Overview
Market Factors
- Key points
- Industry regulation
- Legislative environment
- European Water Framework Directive (WFD)
- Urban Waste Water Treatment Directive (UWWTD)
- Figure 6: Sewerage treatment enhancement expenditure driven by UWWTD in England & Wales, 1990-15
- Figure 7: Sewerage treatment enhancement expenditure driven by UWWTD in England & Wales graph, 1990-15
- The Drinking Water Directive
- Revised Bathing Water Directive
- Figure 8: UK coastal bathing water compliance with Bathing Water Directive for mandatory coliform standards, as of 2014
- Transfer of private sewers in England and Wales
- Figure 9: Capital expenditure on private sewers in England & Wales, by water and sewerage company, 2012-15
- The Flood and Water Management Act 2010
- Water Act 2014 to open up water and sewerage retail competition for all business customers in 2017
- Key points
Industry Structure
- Key points
- England & Wales
- Figure 10: Details of water and sewerage companies, as of March 2015
- Figure 11: Details of water-only companies, as of March 2015
- Sewerage services
- Figure 12: Details of companies that supply sewerage services to water-only companies, as of March 2015
- Figure 13: Sewerage customers of water and sewerage companies, household and non-household, 2012/13 and 2013/14
- Figure 14: Sewerage customers of water and sewerage companies, household and non-household graph, 2013/14
- Sewage treatment processes
- Water services
- Figure 15: Turnover from water services in England and Wales, by type, 2009/10-2013/14
- Regulators
- Performance
- Figure 16: Internal sewer flooding indicators in England and Wales, by company, 2011/12-2013/14
- Figure 17: Ofwat final determinations for sewer flooding expenditure, by water and sewerage company, 2010-15
- Figure 18: Expenditure to reduce flooding risk for properties in England & Wales, by water and sewerage company, 2010/11-2014/15
- Scotland
- Northern Ireland
- Key points
Capital Expenditure
- Key points
- Total capital expenditure
- Figure 19: Total capital expenditure by water and sewerage companies in England & Wales, 2005-10 and 2010-15
- Figure 20: Total capital expenditure by water-only companies in England & Wales, 2005-10 and 2010-15
- Figure 21: Actual UK capital expenditure on water and sewerage services, 2009/10-2014/15
- Figure 22: UK capital expenditure on water and sewerage services, 2009/10-2013/14
- Figure 23: UK capital expenditure on water and sewerage services graph, 2009/10-2013/14
- Sewerage-related capital expenditure
- Figure 24: Analysis of sewerage-related capital expenditure in England and Wales, by company, 2008/09-2013/14
- Figure 25: Analysis of sewerage-related capital expenditure, by water and sewerage companies in England and Wales, 2008/09-2013/14
- Figure 26: Analysis of sewerage capital expenditure in England and Wales by water and sewerage companies, by type, 2011/12-2013/14
- Figure 27: Sewers renovated and replaced in England and Wales, by company, 2009/10-2013/14
- Water-related capital expenditure
- Figure 28: Analysis of water related capital expenditure, by water and sewerage companies in England and Wales, 2008/09-2013/14
- Figure 29: Analysis of water related capital expenditure, by water and sewerage companies in England and Wales graph, 2008/09-2013/14
- Figure 30: Analysis of water capital expenditure in England & Wales, by water and sewerage companies, by purpose, 2013/14
- Figure 31: Analysis of water capital expenditure by water-only companies in England & Wales, by type, 2013/14
- Figure 32: Analysis of water capital expenditure in England and Wales, by water and sewerage companies, by type, 2011/12-2013/14
- Figure 33: Analysis of water capital expenditure in England and Wales graph, by water and sewerage companies, by type, 2013/14
- Figure 34: Analysis of water capital expenditure in England and Wales, by water-only companies, by type, 2011/12-2013/14
- Figure 35: Analysis of water capital expenditure in England and Wales graph, by water-only companies, by type, 2013/14
- Scottish Water capital expenditure
- Figure 36: Analysis of Scottish Water capital expenditure on water and sewerage service, 2009/10-2013/14
- Figure 37: Analysis of Scottish Water capital expenditure on water and sewerage services graph, 2008/09-2012/13
- Figure 38: Progress of Scottish Water to date in the Five Year Investment Programme 2010/15
- Northern Ireland capital expenditure
- Figure 39: Analysis of Northern Ireland Water capital expenditure on water and sewerage services, 2009/10-2013/14
- Key points
Company Analysis
- Key points
- Key points
Anglian Water Services
- Anglian Water’s reduces the number of framework agreements for AMP6
- Figure 40: Financial analysis of Anglian Water Services, 2010-14
- Figure 41: Number of properties billed by Anglian Water, 2012/13-2013/14
- Figure 42: Anglian Water, infrastructure details, 2009/10-2013/14
- Figure 43: Total capital expenditure of Anglian Water, 2009/10-2013/14
- Figure 44: Analysis of sewerage capital expenditure by Anglian Water Services, by type, 2012/13-2013/14
- Figure 45: Analysis of water capital expenditure by Anglian Water, by type, 2012/13-2013/14
United Utilities Water
- Five delivery partners selected for £3.4 billion AMP6 programme
- Figure 46: Financial analysis of United Utilities Water, 2010-14
- Figure 47: Number of properties billed by United Utilities, 2012/13-2013/14
- Figure 48: United Utilities, infrastructure details, 2009/10-2013/14
- Figure 49: Total capital expenditure of United Utilities, 2009/10-2013/14
- Figure 50: Analysis of sewerage capital expenditure by United Utilities, by type, 2012/13-2013/14
- Figure 51: Analysis of water capital expenditure by United Utilities, by type, 2012/13-2013/14
Northumbrian Water
- Figure 52: Financial analysis of Northumbrian Water, 2009-13
- Figure 53: Number of properties billed by Northumbrian Water, 2012/13-2013/14
- Figure 54: Northumbrian Water, infrastructure details, 2008/09-2012/13
- Figure 55: Total capital expenditure of Northumbrian Water, 2008/09-2012/13
- Figure 56: Analysis of sewerage capital expenditure by Northumbrian Water, by type, 2012/13-2013/14
- Figure 57: Analysis of water capital expenditure by Northumbrian Water, by type, 2011/12-2012/13
Severn Trent Water
- Severn Trent reappoints seven contractors for AMP6
- Figure 58: Financial analysis of Severn Trent Water, 2010-14
- Figure 59: Number of properties billed by Severn Trent Water, 2011/12-2012/13
- Figure 60: Severn Trent Water, Infrastructure Details, 2009/10-2013/14
- Figure 61: Total capital expenditure of Severn Trent Water, 2009/10-13/14
- Figure 62: Analysis of sewerage capital expenditure by Severn Trent Water, by type, 2012/13-2013/14
- Figure 63: Analysis of water capital expenditure by Severn Trent Water, by type, 2012/13-2013/14
South West Water
- South West Water accelerates AMP6 work
- Figure 64: Financial analysis of South West Water, 2010-14
- Figure 65: Number of properties billed by South West Water, 2012/13-2013/14
- Figure 66: South West Water, infrastructure details, 2009/10-2013/14
- Figure 67: Total capital expenditure of South West Water, 2009/10-2013/14
- Figure 68: Analysis of sewerage capital expenditure by South West Water, by type, 2012/13-2013/14
- Figure 69: Analysis of water capital expenditure by South West Water, by type, 2012/13-2013/14
Southern Water Services
- Southern Water brings project design back in-house for AMP6
- Figure 70: Financial analysis of Southern Water Services, 2010-14
- Figure 71: Number of properties billed by Southern Water, 2012/13-2013/14
- Figure 72: Southern Water, infrastructure details, 2009/10-2013/14
- Figure 73: Total capital expenditure of Southern Water Services, 2009/10-2013/14
- Figure 74: Analysis of sewerage capital expenditure by Southern Water Services, by type, 2012/13-2013/14
- Figure 75: Analysis of water capital expenditure by Southern Water Services, by type, 2012/13-2013/14
Thames Water Utilities
- Figure 76: Financial analysis of Thames Water Utilities, 2010-14
- Figure 77: Number of properties billed by Thames Water Utilities, 2012/13-2013/14
- Figure 78: Thames Water Utilities, infrastructure details, 2009/10-2013/14
- Figure 79: Total capital expenditure of Thames Water Utilities, 2009/10-2013/14
- Figure 80: Analysis of sewerage capital expenditure by Thames Water Utilities, by type, 2012/13-2013/14
- Figure 81: Analysis of water capital expenditure by Thames Water Utilities, by type, 2012/13-2013/14
Dŵr Cymru Cyfyngedig
- Figure 82: Financial analysis of Dŵr Cymru Cyfyngedig, 2010-14
- Figure 83: Number of properties billed by Dŵr Cymru Cyfyngedig, 2011/12-2012/13
- Figure 84: Dŵr Cymru Cyfyngedig, infrastructure details, 2009/10-2013/14
- Figure 85: Total capital expenditure of Dŵr Cymru Cyfyngedig, 2009/10-2013/14
- Figure 86: Analysis of sewerage capital expenditure by Dŵr Cymru Cyfyngedig, by type, 2012/13-2013/14
- Figure 87: Analysis of water capital expenditure by Dŵr Cymru Cyfyngedig, by type, 2012/13-2013/14
Wessex Water
- Figure 88: Financial analysis of Wessex Water, 2010-14
- Figure 89: Number of properties billed by Wessex Water, 2012/13-2013/14
- Figure 90: Wessex Water, infrastructure details, 2009/10-2013/14
- Figure 91: Total capital expenditure of Wessex Water, 2009/10-2013/14
- Figure 92: Analysis of sewerage capital expenditure by Wessex Water, by type, 2012/13-2013/14
- Figure 93: Analysis of water capital expenditure by Wessex Water, by type, 2012/13-2013/14
Yorkshire Water Services
- Figure 94: Financial analysis of Yorkshire Water Services, 2010-14
- Figure 95: Number of properties billed by Yorkshire Water, 2012/13-2013/14
- Figure 96: Yorkshire Water, infrastructure details, 2009/10-2013/14
- Figure 97: Total capital expenditure of Yorkshire Water Services, 2009/10-2013/14
- Figure 98: Analysis of sewerage capital expenditure by Yorkshire Water Services, by type, 2012/13-2013/14
- Figure 99: Analysis of water capital expenditure by Yorkshire Water Services, by type, 2012/13-2013/14
Statutory Water Companies
- Figure 100: Analysis of water capital expenditure in England and Wales, by water-only companies, by type, 2011/12-2013/14
Scottish Water
- Figure 101: Financial analysis of Scottish Water, 2010-14
Northern Ireland Water
- Figure 102: Financial analysis of Northern Ireland Water, 2010-14
Market Forecast
- Key points
- 25-year strategic direction statements
- Figure 103: UK population, by region, 2013-25
- Forecast capital expenditure
- England & Wales – AMP6 2015-20
- Figure 104: Average expected combined household bill, by water and sewerage companies, 2014/15 and 2019/20
- Figure 105: Average expected household water bill, by water-only companies, 2014/15 and 2019/20
- AMP6 Expenditure Allowances
- Move towards long-term alliances and frameworks across industry
- Figure 106: Total expenditure (Totex) allowance for AMP6 in England & Wales, by water & sewerage company, 2015/16-2019/20
- Figure 107: Total expenditure (Totex) allowance for AMP6 in England & Wales graph, by water & sewerage company, 2015/16-2019/20
- Figure 108: Forecast capital expenditure for AMP6 in England & Wales, by water & sewerage company, 2015/16-2019/20
- Figure 109: Forecast capital expenditure for AMP6 in England & Wales graph, by water & sewerage company, 2015/16-2019/20
- Figure 110: Forecast capital expenditure for AMP6 in England & Wales graph, by water only company, 2015/16-2019/20
- Thames Tideway Tunnel
- Figure 111: Estimated cost of Thames Tideway Tunnel, 2014/15-2021/22+
- Scotland Investment Programme 2015-2021
- Figure 112: Forecast capital expenditure for Scottish Water, 2015/16-2020/21
- Northern Ireland Investment Programme 2015/16-2020/21
- Key points
Further Sources and Contacts
- Trade associations and regulatory bodies
- Trade magazines
- Trade exhibitions
- Trade associations and regulatory bodies
Potable Water and Sewerage - UK - April 2015
US $1,343.55
(Excl.Tax)