welsh water amp7 business plan

Evolve UK – An Overview of AMP 7, the 2020-2025 Water Sector Investment Cycle in England and Wales

Ireland’s capabilities in the water sector.

Enterprise Ireland coordinates a well-established cluster of over 80 water and wastewater companies which provide products and service solutions to address global water challenges in areas such as water scarcity; climate change and resilience; rising energy costs; increased regulation; increased quality requirements and ageing infrastructure. The launch of the AMP 7 2020 – 2025 water sector investment cycle in the UK and Wales provides opportunities to these companies, which are well positioned to service the English, Welsh, Scottish and Northern Irish municipal and industrial water sectors and their respective capital and growth objectives.

UK Opportunities

This repor t is prepared for businesses which operate or are considering entry into the English and Welsh water sector over the course of a new five-year Asset Management Plan (AMP 7) 2020-2025 which has an estimated value of £51b, with an approximate 50:50 split between capital and operational investment.

From reading this report , you should gain a greater understanding of the structure of the English and Welsh water and wastewater sector including

• water utilities
• tier one contractors
• environmental agencies
• water alliances
• relevant industry events
• AMP 7 contract information

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AMP7: Getting the balance right

Every 5 years, Ofwat has the difficult job of resetting the price framework for the water industry in England and Wales. It’s about getting the right balance whilst improving customer service for a lower cost.

12 September 2019 | 1 min read

AMP7 striking the balance

The Water industry is soon to embark upon the new AMP7 period. (This is quinquennial investment cycle in which all UK water Companies set out the business plan objectives and budgets in line with Government and regulatory objectives). Historically (pre AMP6), there was a trend to CAPEX and OPEX solutions – however during AMP6 and running into AMP7, the focus is for Water Companies to adopt a TOTEX approach – this looks at the whole life cost of an asset.

In November 2017, Ofwat (the water industry regulator) laid out a set of detailed objectives for all water companies to achieve during the AMP7 cycle within its 2019 price review final methodology report. David Gordon, Technical Director , reviews this report for the Institute of Water magazine.

This article was first published in issue 197 of the Institute of Water Magazine.

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Since 2001, when we became part of Morgan Sindall Group plc we have grown organically, using our engineering expertise and long-term relationships to deliver safe, innovative and responsible infrastructure for public and private sector customers.

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Location: wales and herefordshire, value: £200m anticipated over five years, completion: 2025, sewer flooding protection projects, properties protected, constructing excellence values awards, nce techfest 2019 - innovation in water award.

We've been working with Welsh Water as a trusted partner for more than 25 years, helping to deliver their Asset Management Plans (AMPs), enhancing and maintaining the network and supporting their work towards the Welsh Water 2050 vision: to become a world class, resilient and sustainable water service.

As a Capital Alliance Delivery Partner, we're responsible for delivering a five year programme of work across the sewerage network and wastewater treatment works. Following our successful delivery as part of Welsh Water’s AMP6, our framework was extended for a further five years through to the end of AMP7 (2025).

Improvements delivered as part of these programmes range from the removal of individual properties from risk of sewer flooding, investigation and prevention of environmental pollution to the installation of innovative treatment technologies new to the UK. We have also delivered numerous enhancements driving innovation and leading in sustainable, low carbon solutions.

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We've been instrumental in introducing WWetco Flexfilter, a new side-stream wastewater treatment process, to the UK. An established solids removal method from the USA, it increases treatment during high flow (storm) conditions and reduces untreated stormwater discharge.

Wentwood Reservoir, Caldicot, South Wales

“Welsh Water is delighted to look forward to continuing to work with Morgan Sindall Infrastructure in AMP7. The team has continuously demonstrated its agility and flexibility to deliver protection, enhancement and bring value for our customers and the environment; from single property flooding schemes, pollution prevention and environmental improvement projects and Wastewater Treatment upgrades through to making our raw water reservoirs and associated assets resilient for another 100 years.” --> Martin Hennessey, Director of Capital Delivery, Dŵr Cymru Welsh Water

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How water companies will respond to AMP8 delivery challenges

25 Apr, 2024 By Rob Hakimian

The water sector’s next five year spending period begins in 2025 with unprecedented levels of investment presenting major challenges and opportunities.

In October 2023, Welsh water company Dwr Cymru and the English water companies submitted spending plans for the eighth asset management period (AMP8), to regulator Ofwat.

The combined intended spend of the 16 companies over the five year AMP8 period between 2025 and 2030 is £96bn – a significant increase on the AMP7’s £51bn outlay.

The reasons for the increase include upgrading ageing assets to preparing for increasing water demand and improving public perception of the privatised sector’s priorities.

There is no doubt that this kind of action is imperative, as official government figures say there will be a water supply shortfall of 4.8bn litres/day by 2050 without any action – an estimate that has risen by 800M litres/day in the last two years.

The investment plans

All of the water companies are keen to say that their investment plans will ultimately enable them to better serve their customers and communities while minimising water wastage.

One key way in which all companies plan to do this is by installing smart meters to help customers manage water use.

Portsmouth Water is one of the smaller water companies and one which does not deal with wastewaster. It will be spending between £60M and £70M to introduce universal smart metering over the course of the next seven years, according to its chief executive Bob Taylor.

“It’s to help customers understand more about their water consumption patterns and encourage them to use less water, leaving more for other reasons such as environmental,” he says. “Installing the meter is the start of a long and quite detailed conversation with customers about how they’re using water and can become more efficient.”

Portsmouth Water has started construction for its £325M Havant Thicket reservoir, which it expects to complete in 2029. It will then take roughly three years to fill, according to Taylor. The reservoir is being constructed by Future Water MJJV – a joint venture of Mackley and Jones Bros Civil Engineering UK.

Anglian Water also hopes to start work on its £2.2bn Fens reservoir. This is not expected to receive planning consent until 2028 and construction is expected to continue through AMP9, before it is finally connected to the water supply in 2036, at the start of AMP10.

Installing the meter is the start of a long and quite detailed conversation with customers about how they’re using water and can become more efficient

As well as major, longer term projects like reservoirs, water companies will carry out smaller projects during AMP8.

United Utilities technical director Richard Ratcliff says the company will be investing to reduce reservoir safety risks and cut leaks in its network in the North West. But its biggest investment will be in wastewater treatment capacity and treatment standards, on the networks and in wastewater treatment plants. “That’s being driven by the Environment Act,” he says. “We need to reduce phosphorous discharges by 80% across our treatment plants by 2038 and reduce storm overflows as part of our overflow reduction plan.”

He believes AMP8 offers an opportunity for United Utilities to transform its infrastructure and create a lasting legacy for the North West.

Wessex Water will be working on roughly 40% of its asset base during AMP8, according to chief operating officer for sustainable operations and engineering John Thompson. He adds that the company still relies on Victorian infrastructure that must be upgraded to make it more resilient.

Thompson says Wessex Water is spending about £400M on upgrading its combined storm overflows and reducing discharges from them.

Affinity Water, which serves parts of London, the South East and eastern England, is also investing in a variety of asset upgrades, according to director of asset strategy and capital delivery Steve Plumb.

This includes “over £70M invested in more advanced water treatment technologies to manage raw water quality risks and over £80M in new trunk mains to provide greater interconnectivity and resilience”.

It will also invest more than £100M in accessing new water sources. An example is the Grand Union Canal scheme, a project that will use existing canal infrastructure to transfer treated wastewater from Severn Trent’s Minworth sewage treatment works in the Midlands to Hertfordshire and North West London where it will be added to Affinity Water’s supply.

Meeting the challenge

With all water companies’ delivery plans for AMP8 having leapt in scale, they will be drawing on experience from previous five year periods while adapting to meet the additional demand.

“We recognise that as we move forward into a much larger and more diverse programme in AMP8 we will move away from a one size fits all approach to delivery through having different options,” says United Utilities head of commercial (capital delivery) Craig Jones. This will include using “more intelligent risk profile applications between United Utilities and supply chain partners dependent on project types”, he adds.

United Utilities will employ different “runways” to delivery depending on project size, he explains. For its biggest projects, which are worth a total of £2.5bn, there will still be design and build contracts under an enterprise model using Project 13 principles. The company was part of the Project 13 working group and after talking to other enterprises that have used this approach decided it was the best path for these projects.

For its smaller projects the water company will take design responsibility and work with smaller contractors. It has appointed Jacobs and Tetra Tech RPS as “strategic solutions partners” to help assess and select preferred options for each scheme.

The danger we’ve got is we’re all pulling on the same people

This decision to take more responsibility for design and delivery is emblematic of water companies’ response to the challenge of such a variety of projects. Some are also opting to use local supply chains for greater collaboration.

Wessex Water has drawn on previous experience to use in-house resources on about 60% of its programme, according to Thompson.

“That’s a mix of our direct[ly employed] people and very small local partners that we use,” he says.

“That allows us to take a lot of risk rather than passing it on to others in the supply chain and that then allows us to innovate.”

Portsmouth Water has developed partnerships with local contractors and supply chains as it strives to improve efficiency and help the local economy, according to Taylor.

“We have a contractor, for example, that does all of our repair and maintenance of the network and its staff sit in our offices alongside our staff,” he says. “It’s a seamless operation.”

Even with these tailored approaches, water companies will draw on their supply chains more heavily than ever, which is likely to present competition for resources.

“There’s also an awful lot of other infrastructure investment, particularly in the energy sector,” Thompson points out.

Stretching the supply chain

Thompson says that Wessex Water has estimated that it will need to employ around 800 more people while its supply chain will need another 2,000 for AMP8.

“The danger we’ve got is we’re all pulling on the same people,” Thompson says.

“What Wessex Water wants is to be a destination where people want to be – and if they’re not working for us, I want them working for our supply chain.”

Similarly, United Utilities wants to be the “client of choice for prospective partners”, according to Jones. “With that in mind, over the past 18 months we’ve conducted nine supplier engagement events and over 50 one-to-one workshops with some of those suppliers,” he adds.

Rising capital investment puts sharp focus on offsite manufacturing, standardisation and talent development

Water companies are also putting in place initiatives to bring new blood into the workforce. For example, Wessex Water has an academy with over 100 apprentices that it will continue to grow. United Utilities is ensuring its delivery partners have relationships with universities and colleges to bring graduates and apprentices on board.

Affinity Water is “expanding its early careers programme to provide exciting opportunities for aspiring project managers, ecologists, scientists and engineers”, according to Plumb.

Despite these initiatives, there is still concern about completing the amount of promised work in the five year AMP8 period.

“Every company is going through a huge step change and I think it’s inevitable they will struggle to hit the timescales,” says Thompson. He says that having every company working to the same mandated five year timeframe exacerbates the issue.

“I think phasing some of this delivery would be really helpful,” he suggests.

Economies of scale

With a very large amount of work to do, there are ways in which companies can “embrace the scale” according to Ratcliff. Key to this are standardisation and offsite manufacturing.

Jones notes: “[United Utilities is] already liaising with all the water companies to identify the opportunities for standardisation that will allow us to give the supply chain far better visibility on what our demand requirements are going to be across the industry through the whole AMP, which will be a step change in the way we work.”

For Wessex Water, standardisation is more about solutions than individual products.

“We’ve got standard solutions that deal with every aspect from the civils, the mechanical and electrical, the products we’re buying, where they’re positioned, how long they take to install, how they are operated,” says Thompson.

“So our designers basically take one of three options for different sizes and the whole [package is ready]. The only challenge is how it’s integrated into an existing site.”

There is also a belief that the scale of delivery will present opportunities for innovation. “Having such a large programme allows us to screen innovation and technology to where it’s most appropriately applied and how many times we can apply it,” Ratcliff says.

Technologies being trialled around the sector include smart networks, artificial intelligence, leak detection using satellites and machine learning and to improve asset management and operation – “digital solutions by which we can connect our networks and treatment plants to enable us to realise efficiencies”, Ratcliff says.

“I think embracing [digital solutions] gives you a much greater chance to deliver a step change,” Thompson adds. “And I think that will attract people who wouldn’t normally have worked in our sector.”

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Welsh water civils and m&e frameworks up for renewal.

Welsh Water has opened prequalification to renew the contractors it uses to deliver civil engineering, mechanical and electrical works.

Minor works will be divided across four regions with around three firms appointed to each region. Up to six firms could be appointed for the  three national major works categories.

The AMP7 framework will run for five years with options to extend for up to three extra years and covers Wales and parts of Herefordshire and Deeside.

Expressions of interest need to be returned by 4 September. Click for the procurement portal .

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Unprecedented investment in the water sector in 2025-30 throws up many challenges, but there are innovative ways through on skills, technology and capacity building, says Andrew Welsh, water utilities director at  Xylem  UK

The water sector in England and Wales is preparing for what is set to be the largest environmental investment programme in its history. Companies are proposing £96 billion of investment in their 2025-30 business plans – an unprecedented 88% increase on the previous five years.

Key elements will be improvements to combined storm overflows (CSOs) – proposals that will eliminate an average of 140,000 sewage spills each year, say Water UK – tighter phosphorous removal requirements and enhanced river quality monitoring, along with wastewater treatment efficiencies, in particular, ensuring full-flow-to-treatment.

On the water supply side, big commitments have been made to cut leakage by over a quarter. Smart water meter rollouts will support this goal by enabling real-time network monitoring, for faster detection of leaks. The rich and timely data provided by high performance smart meters will also reduce per capita consumption, by enabling customers to accurately monitor their usage.

Suppliers like Xylem are developing new technologies and service models to help utilities deliver their transformative plans. As a global solutions provider and manufacturer, Xylem is also increasing production capacity across its manufacturing sites, to ensure it is ready to meet the demand of its products.

Such a major capital programme will mean a rise in demand of technology and services – water company procurement managers now building AMP8 agreements and frameworks for delivery in 2025-30, should be reviewing their partners’ and suppliers’ readiness to support that requirement.

While manufacturing capacity can increase, one of the biggest challenges the sector faces is people – ensuring there are enough boots-on-the-ground to deliver projects. Water UK predicts that Asset Management Plan investment in the next five years will result in a 50% increase in the workforce, with more than 30,000 highly skilled jobs expected to be created.

Including the supply chain, UK membership organisation Energy & Utility Skills puts the total number of new recruits at 64,700 needed by 2029, but the sector is experiencing challenges to recruit new employees . Additionally, there is a significant retirement wave due in the water sector, which poses a risk of substantial loss of knowledge and expertise.

Filling these gaps will be a massive undertaking but the sector has an opportunity to attract new talent by pulling together to promote itself as an industry with purpose. Building a career in water puts you at the heart of the green revolution and offers the chance to make a difference to communities across the world.

To help build for the future, Xylem UK launched a graduate scheme in October 2023. It currently has two graduates working through a programme that takes them across the business. Our graduates were drawn to Xylem’s environmental and social values, as they align with their personal values.  They want to help solve the world’s water crisis – and the sector needs their skills and ideas.

We will be repeating the scheme each year, with plans to expand it to take on more graduates. We are also proud of our apprenticeship programme, which sees an intake of apprentices work across the business while completing course work and exams.

Water companies already have well-established graduate and apprenticeship schemes, as well as recruitment programmes that target a range of disadvantaged jobseekers and diverse groups. I believe there is scope in this area for collaboration between suppliers and utilities, so trainees and new recruits can see the sector from all perspectives, to accelerate learning and expand their knowledge and capabilities.

In recognising the skills gap and the need for efficiencies, services are now widely available that streamline and automate processes to save time and resource, and free up people to work in areas where they can add more value to their organisation.

Off-site build – where modularised plant is designed, built and tested off-site – was a favoured approach in AMP7, which I expect to see increase in AMP8 to limit onsite time.

Data-as-a-service (DaaS) models – where data collection and analysis is managed by a supplier – will also gain momentum. One example is Xylem’s recently launched HydroDaaS for river water quality monitoring. Xylem is exploring different models, such as pumping-as-a-service, where pumps are owned, operated and maintained by external partners.

These are just two of many examples of how suppliers can help build a more resilient, robust and sustainable sector. Like many suppliers, Xylem is looking forward to developing stronger partnerships with water companies over the next five years and would invite those who would like a conversation about new ways of working to get in touch.

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