Ecosystem resilience approach › globalassets › z_corporate...Chapter 4: Supplementary Document - S4004 unitedutilities.com 1 Ecosystem Resilience Ecosystem resilience is the capacity

Ecosystem resilience: Ecosystem resilience through catchment management, partnership and markets Chapter 4: Supplementary document

Document Reference: S4004

This document includes our approach to the natural environment, recognising the long-term benefits of a resilient environment, taking a systematic approach and adopting Natural Capital thinking.

United Utilities Water Limited

unitedutilities.com Chapter 4: Supplementary Document - S4004

Contents 1 Ecosystem Resilience ........................................................................................................................................... 2

2 Understanding our baseline resilience and dependencies .................................................................................. 4

2.1 Water quality in rivers and lakes ................................................................................................................. 6

2.2 Water resources planning ........................................................................................................................... 6

2.3 Health of water supply catchments ............................................................................................................ 6

2.4 Flooding ....................................................................................................................................................... 7

3 Catchment Management ................................................................................................................................... 10

3.1 Integrated catchment strategy ................................................................................................................. 10

3.2 Case studies ............................................................................................................................................... 13

4 Demand Management ....................................................................................................................................... 22

4.1 Water Demand Management ................................................................................................................... 22

4.2 Wastewater Demand Management .......................................................................................................... 26

5 Environmental Markets ..................................................................................................................................... 30

5.1 The Natural Capital Platform ..................................................................................................................... 30

6 Embedding Partnerships .................................................................................................................................... 31

6.1 Catchment Based Approach (CaBa) .......................................................................................................... 31

6.2 Natural Course, a European Union funded LIFE Integrated Project .......................................................... 31

6.3 Defra Pioneers focus on the North West .................................................................................................. 32

6.4 Our long term partnership with the Royal Society for the Protection of Birds (RSPB) ............................. 32

6.5 Delivering bathing water resilience with Turning Tides ............................................................................ 33

6.6 Flood management partnerships .............................................................................................................. 33

7 Environmental Net Gain ..................................................................................................................................... 34

7.1 Natural Capital Accounting ....................................................................................................................... 34

7.2 Corporate Natural Capital Account ........................................................................................................... 35

7.3 Water Resource Management Plan .......................................................................................................... 35

7.4 Development of a Natural Capital tool for the River Petteril .................................................................... 35

7.5 Involvement in UKWIR Natural Capital accounting projects ..................................................................... 36

7.6 Emerging market mechanisms .................................................................................................................. 36

7.7 Developing a Natural Capital Performance Commitment ......................................................................... 36

8 Summary of the AMP7 plan to enhance ecosystems resilience capability ........................................................ 37

Copyright © United Utilities Water Limited 2018 1


1 Ecosystem Resilience Ecosystem resilience is the capacity of an ecosystem to respond to disturbance by resisting damage and recovering quickly. This is important for the livelihoods and welfare of people in the North West and beyond as ecosystems provide many services of value to people as shown in Figure 1. Ecosystems are under growing pressure from climate change and population growth which means they are at risk of declining health. As a water and wastewater services provider, with significant interactions with the environment, this is a concern. We therefore recognise that understanding the health of ecosystems and our interaction with them is of substantial importance to the resilience of our services. Additionally customers are keen for us to work in partnership with other organisations to make better use of the resources we have to enhance ecosystem resilience in the North West. Figure 1: Ecosystem service summary (Source: WWF1)

The importance of ecosystem resilience was highlighted during Storm Desmond on 5th December 2015 when both our water and wastewater services were impacted by unprecedented rainfall in Cumbria which led to a new UK 24 hour rainfall record of 341.4mm rainfall being recorded at Honister Pass. This led to widespread flooding in

1 World Wildlife Fund: www.wwf.eu/what_we_do/biodiversity Copyright © United Utilities Water Limited 2018 2

http://www.wwf.eu/what_we_do/biodiversity


Cumbria, which affected customers, wastewater pumping stations, wastewater treatment works and also water treatment works. Additionally, significant damage was done to the Thirlmere catchment, which resulted in a period when the raw water quality was too poor to treat for onward supply to the Manchester area. Only through utilising our water system resilience through rapid redistribution of supplies around our regional system did we avoid significant numbers of customers going without water. These types of incidents are likely to become more common with climate change. Additionally, other pressures on ecosystem resilience are also increasing due to population growth and the unsustainable exploitation of natural resources.

For some time now we have recognised the importance of managing drinking water catchments in a holistic way if we are to provide customers with a reliable and cost effective service. We were the first company to embark on sustainable catchment management when we formed our Sustainable Catchment Management Programme (SCaMP) in 2005 (see Figure 2). Since then, this programme has grown in scale in recognition of the benefits it has provided in protecting raw water quality. When Defra launched the Catchment Based Approach we actively engaged with it and formed Catchment Wise which started to take our involvement in the catchment based approach beyond just drinking water catchments. We wanted play our part in improving bathing waters and river water quality in the most sustainable and cost effective way possible.

Having seen the potential benefits of collaboration to deliver enhanced ecosystem resilience and thus natural capital benefits we worked with the Environment Agency, Natural England, Greater Manchester Combined Authority and the Rivers Trust to successfully win a bid to deliver an European Union LIFE integrated project - Natural Course2. This project aims to build collaborative capability in order to deliver the challenging requirements of the Water Framework Directive. As a result of this external funding from the European Union we formed our Integrated Catchment Team who have not only worked closely with the other four collaborators to deliver the Natural Course project but they have also developed our Integrated Catchment Strategy which sets out how we intend to build our capability to work at an ecosystem scale with other parties. This strategy culminates in a vision to be a Catchment System Operator within the next ten years provided we get legislative support and the buy in of partner organisations.

Figure 2: Evolution of catchment management, including our SCaMP programme to development of future catchment system operator

2 http://naturalcourse.co.uk/ Copyright © United Utilities Water Limited 2018 3


In strengthening our ecosystem resilience through developing our Integrated Catchment Strategy we recognise the capabilities highlighted in Figure 3 are key to success.

Figure 3: Key features of our Integrated Catchment Strategy

2 Understanding our baseline resilience and dependencies A cornerstone of ecosystems resilience is a sound understanding of the status of the ecosystems we interact with, our dependencies upon them and key risks. We supply water to 7.1 million people across Cumbria, Lancashire, Greater Manchester, Merseyside, most of Cheshire and a small area of Derbyshire. We own and operate over 100 water supply reservoirs, abstract from various river and stream sources, as well as lake abstractions and numerous groundwater sources. More than 90% of the water supplied by us comes from rivers and reservoirs, with the remainder from groundwater.



Figure 4: Protected areas in the North West

Additionally, we provide wastewater treatment for a population equivalent of 8.8 million people via 568 wastewater treatment works which vary in size significantly from serving a few properties to Davyhulme which serves a population equivalent of 1.1million. A significant part of the sewer system in the North West is combined due to the legacy of the development of the area. This means that we have 2,048 combined sewer overflows to relieve the system in times of high flows and discharge to the water environment.

Key dependencies include having healthy rivers to discharge to without environmental damage, sufficient water resources of a good enough quality and quantity for abstraction and river catchments that can manage rainfall without significant risk of flooding. The sensitivity of ecosystems of the North West is highlighted by the number of protected areas which exist. This is particularly so for Cumbria and the upland areas of Lancashire as well as much of the North West coast.



2.1 Water quality in rivers and lakes We have an extensive capability to understand the role our discharges play in environmental quality and the capacity of the water environment to accept our discharges. This is vital for our wastewater service in order to ensure that the right schemes are included in our Water Industry National Environment Programme (WINEP) so that we can play our part in improving the environment of the North West whilst maintaining customer bills as low as possible. Through collaborative working with the Environment Agency we have shared our expertise to come to a common view on where improvements to our discharges are needed. Not only does this give us confidence the right needs have been identified but it also gives us important insight into the role we play in the wider ecosystem and therefore the option for alternative solutions either on or off our asset base.

2.2 Water resources planning In development of our Water Resources Management Plan we followed best practice, this included consulting with regulators and customers as well as following the Environment Agency’s Water Resources Planning Guideline. We also adopted current national best practice in developing our plan, for example the UKWIR decision making framework (UKWIR, 2016), UKWIR risk based planning guidance (UKWIR, 2016) and WRMP19 Methods – Population, Household Property and Occupancy Forecasting (UKWIR, 2015). We have also used sophisticated ‘stochastic weather’ to test the response of our supply system to more severe and different patterns of drought than we have seen historically. This involved creating 17,400 years of stochastic flow data for 25 catchments. By carrying out this detailed planning we have a good understanding of our reliance on the health of ecosystems and the hydrological cycle.

2.3 Health of water supply catchments We own 56,000 hectares of catchment land in North West England, providing high quality raw water into our reservoirs and other sources and we work with third parties to ensure that the remaining 720,000 hectares of catchment land not in our ownership is managed to the same high standard. Together this land provides a resilient water supply and protection against downstream flooding as well as wider environmental and social benefits including biodiversity, carbon sequestration and recreational opportunities. Through the delivery of our innovative ‘Sustainable Catchment Management Programme’ (SCaMP) we are recognised as industry leaders in securing multiple benefits at a landscape scale.

Modelling capability underpins our understanding of baseline resilience and future risks

• Sewer network hydraulic models covering 99.7% of the population we serve

• Integrated catchment models to support identification of overflows contributing to failure of standards. These cover 56% of the population we serve in areas with high concentrations of overflows

• Coastal models covering 100% of the north west coast allowing analysis of the impact of overflows and wastewater treatment effluents on bacterial standards for bathing and shellfish waters

• SAGIS-SIMCAT models allowing analysis of the impact of wastewater treatment effluents and 12 other sectors inputs, allowing identification and scale of required improvements in accordance with the “polluter pays” principle

• In house capability to run multi-variate decision support tool developed under Chemical Investigations Programme 2 to optimise treatment solutions for multiple parameters at the catchment scale



Working with the Environment Agency we routinely design catchment safeguard zones to protect both surface and groundwater sources from pollution. Safeguard zones require voluntary action by third parties to prevent deterioration with a view to reducing the level of treatment required. We have in-house catchment teams that manage the catchment land in our ownership as well as working with third parties to encourage the adoption of best practices on the remaining non-owned catchment land. We continue to manage and enhance our land holdings as part of our approach to SCaMP. We will continue to work with partners to raise awareness of risks and opportunities and use their expertise to support measures to reduce risk and improve resilience within catchments.

We have four in-house catchment teams that are responsible for identifying and managing risks on a day to day basis. Roles include catchment controllers, woodland officers, catchment partnership officers and land agents. Primarily the catchment teams focus on managing the risks related to our owned assets, whilst working in partnership with catchment advisers from third parties (often funded by United Utilities) to manage the risk beyond our land ownership.

Since Defra launched the Catchment Based Approach (CaBA) in 2012 we have been engaged with the CaBA groups to facilitate and deliver improvements to water quality. For example we are working with the Ribble Rivers Trust in the Wayoh safeguard zone to raise awareness of the risk to safe clean drinking water caused by the use of pesticides in the catchment.

Moving on past 2020, we aim to continue to manage our own land for the benefit of water quality, promoting collaborative working through partnerships on other’s land, involving both customers and key stakeholders in the individual catchments. We will continue to influence land usage into the future by working with landowners and managers to support activities to benefit the quality of drinking water supplies and use incentive schemes where appropriate to deliver outcomes akin with our objectives.

We will continue to develop action plans for our at risk catchments, working with relevant regulatory bodies and stakeholders, and instigating mitigating measures to protect and enhance ecosystem resilience. This work will improve natural processes to support fully functioning ecosystems, which should reduce the risk of the impact of climate change, which will reduce the need for future capital investment for additional water treatment.

2.4 Flooding In the North West we experience high levels of run-off into a mostly combined network and evidence from the 21st Century Drainage Programme demonstrates that we have issues in the long term with capacity. Our aim is to achieve upper quartile performance for flooding over the next 10 years. There are a number of pressures on the ecosystem which could prevent us from achieving this. There are a large number of interactions with 3rd party drainage systems and water courses and as such it is important that we work together with other risk management authorities to manage the risk of flooding. We are committed to delivering improvements through partnership where possible and are recruiting a Flood Risk Partnership Manager to provide further focus in this area. Due to these complex interactions and the combined nature of the drainage system, the health of the surrounding ecosystem impacts on sewer flood risk with key factors including:

• Land use which can impact on run off rates to sewer

• River levels which can interact with our sewer network leading to hydraulic locking of our outfalls during high flows so that storm discharges are inhibited



• Loss of natural drainage pathways such as streams and rivers leading to surface water drainage and even rivers ending up in the combined sewer system

• Climate change leading to more extreme weather patterns with intense summer rain storms being a key risk

• Local development resulting in changes in surface water run-off volumes discharging to sewer

Understanding our sewer flooding risk and the challenges presented by current and future environmental conditions is key to managing this risk. We have verified 2D models for 99.7% of our network. 2D models simulate overland flow patterns so take into account the typography of the land around our assets.

We have used this model coverage to build on the solid foundation we have from Sewerage Management Plans to develop our Integrated Drainage Area Strategy (IDAS) approach, based on the drainage strategy framework. The process has been trialled and delivered over 18 catchments and benefits have already been realised throughout the process.

The Integrated Drainage Area Strategy studies carried out in AMP6 will be utilised to identify opportunities to reduce flood risk within affordable limits.

In AMP7 we will further evolve this through application of the Drainage and Wastewater Management Planning framework. This approach considers wider environmental issures as well as flooding to understand where there are long term risks. This will enable us to propose solutions which will ensure long term resilience against flooding.in particular, feedback from customers tells us they would like to see this done in a sustainable and green where possible. Therefore, in AMP7 we will always explore alternative solutions to reducing flood risk. This includes approaches such as natural flood management, surface water separation and sustainable drainage systems (SuDS) and where possible solutions developed in partnership which deliver reduction in multiple types of flood risk.

Surface water run-off to the combined network and increases in those flows from new development, particularly from greenfield sites or where land use changes, has the potential to increase flood risk. We recognise that we cannot “build our way out” of the situation and have to use a different approach.

Our strategies for “Surface Water Management” and “Sustainable Drainage Systems (SuDS) in New Development” allow us to identify clear and consistent messages and intent to other (flood) Risk Management Authorities. To compliment this we engage closely with local planning authorities and developers to influence them. We have started to adopt SuDS, both those constructed as part of new development and retrospectively, to encourage developers to use sustainable drainage methods.

To understand how river levels can impact on our flood risk, we are improving our operational approach. Enhancing and optimising the performance of the network is central to our plan and we are embedding the learning from our Wastewater Network Management (WwNM) pilot from AMP6 across the North West. The programme centres on a systems thinking approach underpinned by improved situational awareness of the performance of key assets and the production line as a whole. It has a number of aspects which will reduce our flood risk, for example we will enstall a network of rain gauges across the North West to give of greater detail of actual conditions in our most populated areas and address gaps in our situational awareness relating to assets that

Figure 5: Integrated Drainage Area Study (IDAS) coverage by mid AMP6



are without telemetry. We will achieve this through a programme of advanced “in-sewer” monitoring throughout AMP7.

The works will involve the provision of a variety of monitoring across the network ranging from first time telemetry installation to in sewer monitoring. The outputs from the monitors available will be utilised, where appropriate to develop weather cognisant typical flow signatures. Then when flow patterns are observed outside normal parameters, indicating there is a developing performance issue, we will respond on site before customers experience service interruptions. This approach will give us much better understanding of our true relationships with the wider ecosystem thereby allowing us to improve the resilience of our service.



3 Catchment Management

3.1 Integrated catchment strategy Through the evolution of SCaMP we have developed an integrated catchment approach. The principles behind this enable us to deliver effective and efficient water management outcomes at a catchment scale. It brings together our understanding of water quality, water resources, flood management and future direction of SCaMP by taking a holistic systems approach to planning and service delivery. An example of this integrated approach is the Petteril Project (see 3.2.2), where work in partnership with the Eden Rivers Trust and other stakeholders to address phosphate issues from diffuse and point sources as well as nitrate management in a groundwater safeguard zone and flooding issues in the catchment. Our long-term ambition is to act as the catchment system operator, where it is beneficial for customers and service delivery. We will dynamically balance in real time the operation of our assets and catchments with actions taken by third parties, such as the agricultural sector, local authorities and flood risk management authorities. This moves us away from a linear model of asset versus catchment, water versus wastewater divide, and more towards a systems thinking model, by integrating assets and catchment needs, thereby working towards a circular economy.

There are a number of socio-economic and environmental benefits by working in this way which deliver catchment resilience in the long-term:

• Improvements to water quality including in drinking water protected areas

• Flood risk reduction

• Environmental stewardship: more sustainable approaches such as nutrient recovery and increasing the amenity value of the natural environment (through development of blue and green infrastructure)

• Driving efficiency by investing effectively in the system as a whole (prioritising and targeting investment)



Figure 6: Our vision for the future

This approach will require a transformation to reach our eventual vision of Catchment System Operation by 2040. The steps to this goal are shown in Figure 6. In order to deliver this we have started to develop our proposed model for a Catchment System Operator platform (see Figure 7 below) which we consider to be vital to fully embed an integrated approach. Through this approach, we are exploring opportunities to use alternative market mechanisms and innovative business models to incentivise different ways to deliver catchment improvement such as:

• Piloting the EnTRADE reverse auction nutrient platform developed by Wessex Water, in our Cheshire and Eden catchments

• Exploring opportunities to create “environmental credits” in urban catchments, such as in the Irwell, by trading unaffordable end-of-pipe solutions for integrated, more cost-beneficial greener solutions

• Leading the co-development of a catchment market platform with other partners and piloting it in our Eden catchment, through our strategic Petteril project, to inform Defra’s Cumbria Pioneer (Figure 6). We are at the centre of this trial, leading on the proof of concept and drawing in other private sector potential investors, such as the insurance and supply chain sectors



Figure 7: Proposed model for a Catchment Systems Operator platform

Developing a a Catchment System Operator is a step change in how we currently operate, and as such, there are challenges towards achieving this vision, especially in terms of:

• Uncertainty around the effectiveness of catchment interventions (lack of long-term evidence and regulatory framework to allow for uncertain outcomes)

• Development of a structured framework of governance, planning and brokerage to support the catchment system operator platform

• Specialised workforce and resources to drive this new way of working • Individual catchments having different needs and priorities • Development of a commercial framework within our capital investment planning to support integrated

natural capital schemes • Buy-in from regulators, stakeholders and customers

There is therefore a need for significant pilot work to explore and address the challenges. We have already started to address this through some of our work in AMP6 in the Petteril catchment (see section 3.2.2) in Cumbria and the Weaver catchment (see section 3.2.3) in Cheshire. Through developing our PR19 Business Plan we have already defined the following:

• Catchment schemes to protected eight groundwater safeguard zones from nitrate pollution • A catchment scheme for the River Dee to provide Catchment Advisors to coordinate and deliver advice

regarding pesticide use and best practice in order to protect a key raw water source. Additionally an investigation into sources of turbidity in the catchment to identify potential future catchment interventions

• River Irwell catchment permit and treatment works improvements to achieve overall phosphorus load reduction upstream of Manchester Ship Canal with associated phosphorus recovery at Davyhulme Wastewater Treatment Works to manage the risk of phosphorus concentrations deteriorating in the Manchester Ship Canal

• Chipping Brook integrated catchment scheme to manage the impact of high flows in the river and treatment works impacting on phosphorus concentrations in the brook with associated benefits to fluvial flood risk



• River Petteril integrated catchment scheme including measures to reduce diffuse pollution from agriculture; increasing flood resilience through natural flood management; wetland creation; establishing a nutrient trading scheme; and developing a natural capital account

• Burscough Wastewater Treatment Works wetland scheme to improve effluent quality through use of wetland treatment as well as provision of conservation wetlands to deliver additional natural capital benefits in conjunction with the Wildfowl and Wetlands Trust who own the neighbouring Martin Mere reserve

• River Alt Catchment investigation building on data set developed under the CIP23 catchment study inconjunction with the CaBA host, the Healthy Rivers Trust to address priority substance issues such as Tributyltin (a biocide) as well as flooding and misconnection issues

• Leigh biodiversity scheme to convert disused operational land into wetland habitat that will connect together important sites in the Manchester Wetlands thereby creating corridor for wildlife. Safe access will also be provided for local residents to enjoy the enhanced natural environment. This will be delivered in conjunction with the Lancashire Wildlife Trust

• A feasibility study to determine if a large scale wetland/minewater treatment scheme is viable on disused operational land downstream of our 3rd largest wastewater treatment works at Bolton. This would be used to provide treatment for final effluent and storm discharges both of which require improvements to meet Water Framework Directive standards but have no cost beneficial solutions

In addition to this we have identified 13 catchments where we will continue to look for integrated catchment opportunities which will deliver additional natural capital benefits.

3.2 Case studies 3.2.1 Our Sustainable Catchment Management Programme (SCaMP) As a significant land owner we recognised the importance of sustainable catchment management early and we started our SCaMP programme in 2005 as an initiative to improve catchment land, working with partners such as the RSPB. It is an innovative and large scale project designed to:

• Improve catchment quality • Meet nature conservation objectives • Improve raw water quality • Ensure a sustainable future for agricultural tenants

Under SCaMP1 (2005-10) we delivered improvements across 27,000 ha of owned water catchment in the Peak District and Forest of Bowland areas which enhanced the resilience of these catchments by significantly reducing the erosion of peat leading to improvements in raw water quality and biodiversity. Following on from the early success of SCaMP1, SCaMP2 (2010-15) delivered improvements across 30,000 ha of owned water catchment and common land in Cumbria and South Lancashire areas. As we moved to SCaMP3 (2015-20) the focus moved to 31 drinking water ‘Safeguard zones’ across 207,800 ha of water catchment land, regardless of ownership. The programme targets colour, pesticides and algae in surface water and nitrates and solvents in groundwater. The range of interventions under the programme includes:

• Catchment advisors • Monitoring and modelling • Engagement and advice • Demonstration farm, sharing best practice • Partnership working • Integrated delivery with wastewater drivers – see Petteril catchment • Nutrient trading

3 Chemical Investigations Programme 2 Copyright © United Utilities Water Limited 2018 13


Figure 8: Moorland restoration through SCAMP

By 2025, we will have delivered five catchment improvement schemes related to improving the condition of habitat on our land holdings at Thirlmere, Haweswater, West Pennine Moors, Bowland and South Pennines, which will help to improve raw water quality by restoring natural processes. This work builds on the schemes delivered at these sites since 2005. We will have delivered twelve catchment schemes related to reducing nutrient loading (phosphates and nitrates), reducing colour and tackling solvent pollution from industry. We also will have undertaken eleven investigations related to raw water quality deterioration to gather the appropriate evidence and undertake an options appraisal with a view to implementing schemes between 2030 and 2040.

In parallel, we will continue our catchment activities on the ground, particularly in safeguard zones where we will continue to work with partners to raise awareness of water quality and support measures to reduce risk and improve resilience. We plan to complete a catchment investigation within 2020-2025 to assess the resilience of the non-owned River Dee catchment to gather appropriate evidence and undertake an options appraisal. If required in 2025-2030 we will initiate a project to improve the resilience of the Dee catchment to the effects of extreme weather events and turbidity. In parallel, we will continue our catchment activities on the ground, working with partners to raise awareness of water quality and support measures to reduce risk and improve resilience.

Our multi-AMP programme to reduce the risk of raw water deterioration is projected to continue until at least AMP10 as shown in Figure 9. Beyond 2040, we expect the investment in catchment management to start to pay-off, as the restored ecosystems become fully functioning and producing high quality raw water. In line with Defra’s 25 year Environment Plan, Natural Capital Accounting will be developed to fully realise the value of our assets for the benefit of customers and other stakeholders. We will continue to work with environmental regulators to develop the existing Water Industry National Environment Programme and include relevant aspects within our plan. We also expect that the natural capital approach and outcomes based approach to agri-environment funding will provide more opportunities for external funding to support those managing our catchments for water quality as the desired outcome.



Figure 9: Long term plan for water supply catchment management

3.2.2 An integrated catchment approach to resilience in the River Petteril catchment The River Petteril is a tributary of the much larger River Eden, located in Cumbria. United Utilities has 11 wastewater treatment works across the catchment, all of which are very small (serving fewer than 1,000 population each). However, four of these wastewater treatment works, were included in the National Environmental Programme (NEP5) as needing a permit for phosphorus removal, in order to meet our “fair share” reduction towards achieving good ecological status in water quality by 2027. The scale of capital investment required to deliver conventional end-of-pipe solutions for phosphorus removal at these works was disproportionate when the cost per customer served was considered. When ecosystems resilience is reviewed more broadly a number of other risks in the catchment are also identified including:

• risk to raw water quality at Bowscar borehole due to nitrate pollution from agriculture; • significant flood risk both locally and a downstream impact on Carlisle; • diffuse pollution from transport (both the M6 motorway and the West Coast mainline run through the

river valley); and • significant diffuse pollution from agriculture and domestic septic tanks contributing to the phosphorus

load in the rivers.



Figure 10: Integrated catchment approaches applied to the Petteril catchment

In 2016 we started to apply our Integrated catchment approach (set out in Figure 10) to this catchment to arrive at a revised plan which delivers enhanced ecosystem resilience. Key elements of the plan include:

• Leading the newly formed system operation steering group • Piloting a natural capital methodology to develop an account for the catchment • Building an enhanced evidence base to ensure the root cause of ecosystem resilience threats was

understood thereby leading to effective interventions • Development of more sustainable solutions for small treatment works • Trial of catchment permitting • Trial of nutrient trading • Delivery of agricultural interventions working in partnership with farmers and landowners • Education campaigns to target pollution from private septic tanks and misconnections • Identification of natural opportunities to reduce flood risk such as Melbourne Park in Carlisle

By 2021 we will have delivered the majority of interventions in the catchment. Without our integrated approach interventions in this catchment to address phosphorus would not have been cost beneficial. We will monitor the benefits on completion of the interventions and carry out a benefits realisation review to determine the overall effectiveness which can then feed into our future plans.

3.2.3 Developing the River Weaver demonstration integrated catchment Following on from our early findings in the Petteril catchment we decided to scale up our demonstration of integrated catchment approaches. The River Weaver catchment was chosen as it presented challenges in terms of ecosystem resilience which impacted both our wastewater and water service. Whilst conventional interventions to address the Water Framework Directive standards are cost beneficial in this catchment we identified the opportunity to deliver interventions in a way that provides greater ecosystems resilience. The key issues in this catchment are excessive nutrients in both the rivers and groundwater as well as flood risk. In this catchment we will test elements that were included in the Petteril, including trialling the role of Catchment Operator to help coordinate the interventions at a catchment scale in order to ensure the benefits are achieved at the lowest cost and sustained over time. We are also scaling up our demonstrations of sustainable treatment technologies to test their applicability for treatment works such as Wrenbury which serves 3,000 people. The full scope of the demonstration is shown in Figure 11.



Figure 11: Key features of our River Weaver resilient catchment demonstration

Workstream 1: Enhanced wetland research centre Development of a ‘live’ wetlands research centre in our Wrenbury Wastewater Treatment Works, in collaboration with Lancaster University, to test and scale up the applicability of sustainable treatment using wetlands to:

• Understand the limits of effluent quality that can be achieved with reactive media (using commercial and in-house developed options)

• Deliver a defined standardised solution for reactive media and reed beds as tertiary treatment to inform AMP7 schemes

• Understand how we can push the boundaries of reed bed design to include treatment in reduced and modular footprints whilst tackling various pollutants, for sanitary determinants, nutrients, microplastics, priority substances and others.

• Understand how we can pair up the use of natural processes with engineered technology, to offer more resilient and enhanced options to water quality treatment and flood management. In time, we are hoping to be able to answer key questions that can help us to build smarter and more resilient catchments, such as: Can we create an ‘intelligent’ passive natural treatment system to integrate within a smart network?

Workstream 2: Demonstration farms Wastewater treatment works effluent contributes to increased nutrient levels in rivers, however detailed modelling shows that a large contribution is associated with diffuse pollution. By diverting some funding from investment at the wastewater treatment works into catchment interventions we can support measures to reduce diffuse pollution across the catchment. We are therefore working with our catchment partners in Cheshire, to build relationships with the local farming community and to develop a demonstration farm within the catchment to trial innovative farming practices and reduce the impact of farming on water quality in Cheshire.

Figure 12: Keeping cows out of rivers, an example of a catchment approach



Workstream 3: Monitoring and sampling In order to exploit the opportunity of catchment interventions, we require the ability to monitor river water quality throughout the catchment in a timely and cost effective manner with remote, off-grid energy sources. A number of technologies are emerging onto the market in this area. We are therefore working with our catchment and innovation teams to:

• Develop a manual sampling regime across the catchment • Trial a number of innovative remote monitors and sensors (see Figure 13). • Map sources of pollutants within the catchment to understand the impact of wastewater effluent in

relation to diffuse pollution • Develop guidelines for a standardised suite of monitoring • Integrate monitoring into the Catchment Hub through IoT technology

Figure 13: Approaches to monitoring catchment water quality being trialled

Workstream 4: Catchment Controller As catchment interventions and monitoring is explored we foresee the need for a Catchment Operator role to support catchment interventions, ensure procedures are adhered to for all parties, monitor performance of the catchment and maintain analytical equipment as appropriate.

We are therefore working with our catchment team to:

• explore the role of a Catchment Operator through workshops with the Environment Agency and Natural England;

• engage with the farming community and build relationships to aid delivery of the demonstration farm; and

• explore co-ordination of catchment activities holistically.

Workstream 5: Nutrient management through the use of EnTrade Through our Cheshire water catchment team, we are piloting the reverse auction tool EnTrade, an innovative trading platform developed by Wessex Water to reduce agricultural inputs in the Poole Harbour catchment. Through Entrade the aim is to improve water quality in groundwater safeguard zones and it is based on a cover crop reverse auction. Farmers bid for how much they want to be paid to plant a cover crop, success is determined by: price, establishment date and crop type. This works alongside a programme of awareness raising, monitoring, farm advice and information to incentivise farmers to adopt alternative practices. We partnered with Wessex Water in 2017 to trial the system in the Cheshire groundwater safeguard zones and we were one of the first water companies to trial the platform outside of Wessex.

In our 2017 trial we:

• Agreed a legal agreement with Wessex Water to use EnTrade on a trial basis • Worked in partnership with Wessex Water to learn from their experience to ensure a successful trial • Created the domain www.uu.entrade.co.uk



• Sent leaflets to c. 150 farmers in the Cheshire groundwater safeguard zones • Auction ran between 12-30th June 2017 • Held drop-in sessions to offer information and assistance during the auction • Provided a contact telephone number and email address for information

Figure 14: Promotional material used to advertise EnTrade trial in Cheshire

The trial received wide and positive press coverage, however there was slow participation from farmers with 11 registrations of interest and, 9 farmers bidding 33 fields (215 ha). We accepted 31 of these bids which covered a total of 200 ha. Unfortunately the autumn of 2017 was very wet and farmers were unable to access land with heavy machinery to sow cover crops. The maize was also not harvested until November, resulting in in significant amount not being sown. Therefore the trial was unable to show significant results. The tool shows great potential in providing a structured approach to nutrient management at catchment scale and we are therefore re-running the trial in summer 2018 and will report on results in due course.

We are also discussing with EnTrade and Wessex Water the development of a pilot-scale trial up in the Petteril catchment in the Eden, whereby we can combine the natural capital platform that we are developing in the Eden with EnTrade’s electronic platform. This would allow for a more powerful marketplace approach, looking at reducing nutrients but also looking at flooding and other catchment risks that could potentially be traded through competitive markets.

3.2.4 Improving the resilience of the Thirlmere catchment During Storm Desmond in December 2015, the Thirlmere catchment experienced unprecedented rainfall which led to erosion of the land and several significant landslides which included very significant damage to the local infrastructure including the closure of one of the main arterial roads through the Lake District, the A591, for 6 months. The landslides also led to debris slides from the slopes surrounding Thirlmere Impounding Reservoir raising the turbidity of the water within the reservoir. As this water source supplies 12% of the region we serve, this led to the need to employ significant mitigation measures to ensure customers continued to receive safe, clean drinking water.

To improve resilience of the Thirlmere catchment from storm events, further protecting raw water quality and securing potable supplies to the Manchester area, we are proposing to reinforce our long term strategy for the catchment by improving its resilience to what appears to be an increasing trend in the frequency of very high, but short lived, intense rainfall events. The actions we will take on the catchment include:

• Restoration of natural processes (geomorphology and vegetation) to improve resilience • Catchment infrastructure enhancements to increase the capacity of engineered structures (such as

bridges) to protect the highways • Landscape-scale changes to land management to benefit water quality and resilience



3.2.5 Co-delivery of ecosystem resilience at Rhodes Farm, Bolton In order for the River Irwell to meet good status under the Water Framework Directive, significant investment would be required at Bolton wastewater treatment works, which serves just under 400,000 population equivalent. The requirements identified for this discharge include a tighter ammonia limit of 3mg/l, a phosphorus limit of 0.1mg/l (below the technically feasible limit) and 63,500m3 of additional storm tank volume. These interventions are not cost beneficial and some are technically infeasible. Without significant innovation it is very uncertain that the River Irwell at Bolton would receive any improvement to meet Water Framework Directive standards. This river is located in the Greater Manchester conurbation with significant resident population in the locality and importantly it is upstream of Manchester City Centre where the river is the centre piece of urban regeneration. By applying our integrated catchment approach to this issue we have identified a potential opportunity that makes use of our extensive land ownership at Rhodes Farm (see Figure 15) just downstream of the treatment works; this used to be required for sludge lagoons but these have been disused for many years. Despite fencing the area the site is often broken into leading to health and safety risks for the general public which require ongoing costs to minimise. We also have significant liabilities on the site due to the volume of water the former lagoons hold.

By 2021 we will complete a study to determine the feasibility of diverting final effluent from Bolton wastewater treatment works to Rhodes Farm for co-treatment with mine drainage water in a constructed wetland development which will facilitate removal of phosphorus from wastewater. This will also generate a number of natural capital benefits including enhanced biodiversity, renewable energy generation and improved health and wellbeing for local residents. If the scheme proves feasible and cost beneficial we would implement it in AMP8.

Figure 15: Plan of Rhodes Farm integrated catchment feasibility study



3.2.6 Generating new habitat at Martin Mere nature reserve Burscough Wastewater Treatment Works serves over 30,000 people and discharges upstream of Martin Mere which is a Wildfowl and Wetlands Trust (WWT) nature reserve. A conventional treatment solution to meet the phosphorus standards required by the Water Framework Directive is non cost beneficial so without innovation the phosphorus load upstream of this important habitat would not be improved. In AMP7 we plan to work in partnership with the WWT to develop and deliver a partnership solution which would include:

• Developing both treatment and conservation reed beds in agricultural land adjacent to the existing Martin Mere reserve, thereby expanding the area of habitat

• Diverting the final effluent from Burscough treatment works to the treatment reed bed for polishing

• Optimising the existing phosphorus removal at Burscough treatment works to reduce the load discharged to the reed bed

• Enhancing the amenity value and public access to deliver further natural capital benefits.

Figure 16: Site plan of proposed reed bed treatment process near to Martin Mere nature reserve



4 Demand Management Population growth, economic growth and climate change all have the potential to put even greater pressures on the resilience of ecosystems however as a water and wastewater service provider we are well placed to mitigate many of these impacts through good practice in managing supply and demand for our services.

4.1 Water Demand Management In development of our Water Resources Management Plan we placed significant focus on demand management as a way of ensuring there is no future water supply deficit and the risk to ecosystems as a result of drought was minimised. Since the mid-1990s, the population in the North West has increased by 300,000 and economic output has increased by £75 billion4. Despite this, the demand for water in our region has fallen and is significantly lower than in the recent past, as shown in Figure 17. This is largely due to significant leakage reductions, as well as metering and water efficiency activity reducing customer consumption.

By adhering to the guiding principles, as set out in the Environment Agency’s Water Resources Planning Guideline, and following industry best practice, we aim for a robust forecast of demand for water over the next 25 years. We account for several key factors in assessing customer consumption:

• Population (as well as property and occupancy) change • Changes in water use behaviour and design standards • Metering • Increasing water efficiency and sustainable water use practices • Economic conditions; and • Climate change and weather patterns

Despite rising populations, economic growth and climate change we are forecasting a reduction in overall demand can be achieved as a result of influencing customer water consumption behaviour, improved water efficiency design of appliances and reductions in leakage. This will enable us to support growth in the North West whilst ensuring the resilience of ecosystems is not adversely impacted.

4 In terms of regional gross value added (income approach) at current basic prices (Office of National Statistics, December 2016). Copyright © United Utilities Water Limited 2018 22


Figure 17: Regional demand for water, with central forecast for dry year demand for water as well as upper (accounting for Northern Powerhouse scenario) and lower forecast for dry year demand for water

4.1.1 Leakage Whilst our leakage is already below the sustainable economic level, we plan to reduce leakage further by 15% by 2025. By 2045 we plan to have reduced leakage by 40% against current levels. This level of reduction is supported by both customers and stakeholders. We are planning to achieve this initially by increasing our leakage detection and repair resources. However, over the course of the planning horizon we will seek to apply innovations and involve specialist third parties to achieve our long-term leakage reduction aspirations. For example, we are currently exploring using satellite imagery to detect leaks, permanent noise sensors deployment, in-pipe assessment techniques and approaches to better monitor customer supply pipe leakage. By reducing leakage we are able to enhance ecosystem resilience by reducing the frequency of drought permits/orders to no more than once every 40 years (2.5% annual average risk).

4.1.2 Customer demand In AMP7 we are seeking to embark on a culture change around how people value water and their understanding of the potential impact of their usage habits on the resilience of ecosystems. We want to see a shift in awareness around sustainability and actions to reduce consumption which are passed down the generations. This is a very ambitious plan as we know that customer behaviour is hard to change. This was demonstrated in the findings of customer research in 2016 which showed that attitudes to water are deeply ingrained and there is a low interest for most people unless supply is threatened: Some of the key findings were:

• 49% of customers don’t think about saving water, it’s habit • 28% of customers pay a flat rate no matter what they use so have no incentive to save water • 13% of customers believe that there is no need to save water as it is everywhere

We are constantly looking for ways to enhance our offering to customers through research and partnership working, and we have undertaken customer research to understand the benefits, barriers and motivations to desired behaviours and willingness to act to achieve greater water efficiency. The results of the research will be used to better inform our approach and we will continue to drive behavioural change through our customer messaging via community engagement; social media and digital presence; and more traditional printed messaging on customer correspondence. Examples of the ways in which we are driving water efficiency are highlighted in Figure 18.



In order to demonstrate our commitment to this aim we have included an innovative performance commitment in our plan which measures customer awareness of actions they can take to improve both water efficiency and drinking water quality in the home. Our target is to increase awareness by 10% over AMP7. We have also set one of the most ambitious targets in the industry to reduce per capita consumption to 113 lires per person per day by 2045.

Customers with a meter typically use less water than those without one and thus moving more customers onto meters is an opportunity. Metered customers are able to review the impact of their behaviour on their bills, and metering also gives us the opportunity to use tariffs based on consumption. ‘Paying for what you use’ is a well-supported principle. Approximately 40% of household customers are now on a water meter whilst others are entitled to ask to have a meter installed if they wish. We forecast that meter penetration will reach 76% in 2045. This forecast is lower than our 2015 plan, as in the intervening period the number of optants has dropped. We have continued a series of promotional events to increase meter uptake but despite this the overall uptake is still lower than the previous five years.

In response to this drop in demand for meters we have undertaken some customer research to help understand barriers to meter uptake which indicated that some customers worry that by switching to a meter they may end up paying more for their water. We are currently trialling a new metering proposition from summer 2017 for two years – the Price Promise which has been developed to overcome this barrier.

The Price Promise - means that if a customer doesn’t save money once the meter is fitted, we will cap the charge to their previous fixed annual bill. It runs for two years from the meter installation, and during this time customer can still choose to switch back to a fixed annual bill if they think they won’t benefit from a metered charge. We’re also trialling the installation of water efficiency devices along with the Price Promise when a meter is installed to further enhance customer experience, promote water efficiency behaviour and the potential financial savings for customers.



Figure 18: Water efficiency customer engagement activity



Production planning

Another key aspect of resilient use of water supplies is being able to optimise their use across the North West in order to minimise the risks of needing to apply drought measures which may impact ecosystem resilience. We have significant integration of water resources across the North West which enables us to minimise the risks of supply deficits by varying the extent to which sources of water are used to maintain our supply demand balance. We coordinate day to day production planning from our Integrated Control Centre where we dynamically balance water supplies to meet daily demand. To do this effectively we use MISER, a production planning tool, primarily targeting the distribution of regional resources for short term week to week forecasts.

In order to factor the sensitivity of some catchments into our decision making we were one of the first companies to put in place an Abstraction Incentive Mechanism. This provides financial incentives to minimise the likelihood of abstraction at four key sites leading to adverse impacts on the local ecosystems. By using our production planning capability and taking account of the financial impacts of using these sources we can contribute to improving the health of these ecosystems.

4.2 Wastewater Demand Management Growing demands placed on the wastewater drainage and treatment systems have the potential to impact on ecosystem resilience through increased risk of pollution and flooding. This is particularly so for drainage systems where we have a legacy of a combined sewer system in many areas leaving our systems and therefore the environment exposed to the impacts of demand growth from climate change.

In order to avoid these consequences occurring we take account of demand forecasts in planning the management of both wastewater drainage and treatment systems. We also seek to influence the behaviour of customers, developers and local authorities to maximise the use of source control to minimise the risk of increasing demand on our systems from both surface water and inappropriate use of the sewer system for disposal of non flushable wastes.

4.2.1 Long term drainage planning We have 568 wastewater treatment works with a wide range of flow and load capacities. In many locations this capacity is gradually being eroded by growth and new development and this is often in popular locations where further housing growth is demanded. Additional population above the design capacity presents a risk to permit compliance and therefore there is a knock on impact on ecosystem resilience. We use the UKWIR5 industry best practice when planning for growth in demand for wastewater treatment to identify areas for investment. At each stage we consider the full range of potential responses we can use in response to a risk such as demand management.

Where intervention is required we have a programme of defined schemes and a performance commitment that holds us to account for delivering the additional capacity required. This could be through upgrading the wastewater treatment works itself or through interventions in the drainage area to remove demand from the system, for example surface water. The performance commitment is flexible so that if the priority for intervention changes we can flex the treatment works in the programme to maximise protection for the environment.

As an industry it is recognised that the long term planning for drainage needs to be enhanced due to the challenges faced by climate change and population growth. The approach is currently under development under the national 21st Century Drainage project. We have been an active member of the project team that has developed the new Drainage and Wastewater Management Plans (DWMP) methodology. We will embed the methodology within our existing processes and will feed into industry forums in respect of further improvements and refinement. As part of business as usual processes we will use the methodology to develop a holistic understanding of the integrated drainage systems, including non water company drains, culverts and watercourses, in order to set out our long term plans to extend and maintain a robust and resilient wastewater system.

5 UKWIR report No. 07/RG/08/2, Long term/least cost planning for wastewater supply-demand Copyright © United Utilities Water Limited 2018 26


The DWMP’s we produce will improve our planning approaches to address unprecedented future challenges and build on best practice. The DWMP outputs will provide greater transparency and line of sight to customers and other stakeholders by defining a standardised approach and deriving management plans aligned across organisations with drainage responsibilities. The plans will build on the systems thinking approach developed in the current Business Plan period and will ensure that plans include interdependencies with other non-owned drainage systems. As a consequence the Business plan we develop for the period 2025 to 2030 should comprise of co-created collaborative flood solutions and associated interventions that truly reduce flood risk and enhance the resilience of our wastewater networks.

Through participating in the various workstreams under the 21st Century Drainage Programme we have contributed to the development of tools such as the Capacity Assessment Framework (CAF), Storm Overflow Assessment Framework, and the Flooding resilience methodology. We have used the CAF and resilience methodology outputs to formulate our Business Plan for the period 2020 to 2025. All of these tools will be used to inform our future management of the network and long term planning activity in the next Business Planning period to ensure we are able to fully appreciate and address future challenges. 4.2.2 Influencing customer behaviour The actions of customers can have a profound effect on the resilience of the drainage system which presents significant risks in terms of flooding and pollution of the environment. We currently remove approximately 21,500 sewer blockages a year and around 27% of sewer flooding incidents are caused by wet wipes and other unflushable items. Wet wipes in particular are a major challenge with approximately 40 billion individual wipes sold in the UK in 2016. The effects of this on customers and the environment can be profound: blockages can lead to sewer flooding which impact approximately 1,000 properties and 7,000 gardens each year in the North West. Our research has found that some customers are having to pay up to £600 to have blockages on their own pipework cleared. Whilst we are very aware of this issue our research has shown that only 21% of customers know what they should and shouldn’t flush down the toilet. We have undertaken extensive customer research to understand how we can influence customer behaviour around sewer misuse as we know this is a particularly challenging behaviour to shift due to the convenience it offers customers. Through trials of material with different images and messages we have shown that a 33% reduction in flushing being used for disposal can be achieved through effective communication of the environmental impacts.

The outcomes from behaviour trials are being used to influence our customer communications. We are currently working with the Rivers Trust to deliver a flushing behaviour campaign on our behalf in areas where there are sometimes problems with sewage litter in rivers. We recognise that as a non governmental organisation they are likely to be better placed to convey these messages to customers than ourselves. This is particularly so as they will be delivered by local people with a passion for protecting their local environment.



Figure 19: Draft flushing behaviour campaign materials

We also raise customer awareness that the rain which falls on their homes, driveways, gardens is a valuable recyclable resource and that the surface water run-off generated needs to be better utilised. Through demonstrations such as our award winning sustainable drainage garden at the RHS Tatton Flower Show 2017, we are leading the way in demonstrating how customers can make changes to play their part in improving resilience. The garden has now been relocated to Moss Bank Park in Bolton, Greater Manchester. This location is central to our population served so it will be used to raise awareness to a wider demographic about the benefits of sustainable surface water management and how to achieve this at a household level.

Fats, oils and grease (FOG) can cause significant blockages to the sewer network and there have been many recent examples of this featured in both the written and visual media nationally. FOG discharged by household and food service establisments can cause blockages which result in sewer flooding, pollution of our waterways and coastal areas as well as a rise in vermin populations. Working both within our region and nationally we undertake targeted customer awareness campaigns that alert customers to the effect discharging FOG can have. We intend to focus such campaigns around environmental and cost impacts of FOG blockages and underpin those messages by advising on kitchen best practice for disposing of these materials.

In the current business plan period we are evolving the operating model within our wastewater network team to develop resource and capability to engage with food service establishments. These takeaways can be major sources of FOG into the sewerage system so we are implementing processes, tools and operating principles for the team to raise awareness and assess waste management practices that will then improve the performance of sewer

Figure 20: Our award winning Tatton show garden 2017



systems. The team will focus on FOG hotspots and engage with other regulators to ensure all parties are managing their regulatory activities effectively. FOG can also be a source of income for the takeaway and the used FOG can enter into part of the circular economy as it is a good material for biofuel.

4.2.3 Surface water removal strategy We recognise that the number of properties affected by flooding within the region is high and that, in the case of internal flooding we have a lot more to do than other Water and Sewerage Companies. We are also aware that the cost of solutions and customer willingness to pay indicate that we cannot build our way out of the high number of flooding incidents that customers unfortunately experience. Therefore we need to think differently and broaden our range of interventions and influencing approach. In addition to customer behavioural change (see section 4.2.2 above), we have to look at how we can better manage the surface water flows discharged to our predominately combined networks.

In parallel with customer surface water recycling awareness activity we will look at our existing networks and exploit surface water separation opportunities that exist. In combination such activity will start to reduce flow volumes and free up capacity within our networks.

We will take a leading role in promoting the value, need and benefit of partnership working to reduce surface water discharged to our sewers and look to harness the funding opportunities that Flood Defence Grant in Aid presents. In addition where we are designing solutions we will look to utilise sustainable discharge routes or storage solutions wherever possible. We are already making progress in this area with examples such as:

Surface water separation was a key part of a scheme to improve Blackpool’s bathing waters. In 2018 we completed a scheme which involved the construction of open basin SUDs and a new surface water outfall pumping station. This enabled us to take pressure off the drainage system in the area to reduce the risk of combined sewer overflows needing to operate on the Fylde coast

SUDS for schools is a project led by Business in the Community that seeks to demonstrate good practice in improving sustainability, in this case through sustainable drainage systems at a primary school in Sale. We partnered with them to deliver the project which will save the school money on their surface water drainage charges, reduce flood risk, demonstrate best practice to other schools and enhance environmental education of pupils

City of Trees share our ambitions to reduce flood risk and improve wellbeing in Great Manchester through planting street trees. A pilot in Howard Street, Salford showed 81% average storm peak reduction and 78% average water volume retention by the tree pit system. Significant reduction in nitrate pollution was also found. A recent partnership has delivered a bigger scheme on Prestwich High Street, Bury as part of regeneration of the street scene.

Slow the Flow’ Award Winning Show Garden - The plot demonstrated a front garden with sustainable drainage solutions instead of traditional hardstanding areas. Staff were available throughout the show to explain the benefits, affordability and practicality of recreating elements of the garden. This project contributed to educating and influencing customers on surface water management at a household level as well as providing us with information on the cost and feasibility of this type of solution.

The garden received excellent feedback, with the Turfstone driveway in particular being an element that visitors felt they could easily implement in their own gardens.



5 Environmental Markets Through our Integrated catchment approach we recognise that environmental markets have a role to play in ensuring we deliver maximum value for customers. We are exploring opportunities to use alternative market mechanisms and innovative business models to incentivise different ways to deliver catchment improvements by:

• Partnering with the National Trust and Green Alliance to explore how a ‘natural infrastructure scheme’ might work, paying upstream landowners for downstream benefits such as “slow clean water”. We are looking at how this might result in catchment management outcomes being delivered in a more efficient manner securing natural capital and its benefits through alternative market mechanisms.

• Piloting the EnTRADE reverse auction nutrient platform developed by Wessex Water, in our Cheshire catchments, see section 3.2.3.

• Exploring opportunities to create “environmental credits” in urban catchments, such as in the Irwell, by trading unaffordable end-of-pipe solutions for integrated, more cost-beneficial greener solutions

• Co-developing a natural capital market platform with other partners

5.1 The Natural Capital Platform Although in its very initial stage of development, we are engaging with different potential partners and private and public organisations, looking at developing a natural capital trading platform. This consists of a brokerage-like financial vehicle, whereby we are exploring opportunities to create:

• an investment portfolio, looking to match potential investors with projects and opportunities to improve the environment and to deliver multiple benefits; and

• future market competition, where catchment service providers, such as NGOs, can engage in a competitive process to offer environmental improvement services, which can deliver sustainable, innovative and cost-effective solutions.

We propose to follow a stepped approach, whereby we move from the current linear commercial model of investment, consisting mainly of delivering environmental improvements as required by our regulatory framework, to a more combined natural capital investment approach. Through this combined approach, we will explore the concept of “blended finance”, offering both financial and non-financial returns, in which environmental schemes can deliver beyond statutory requirements, looking at added natural capital value.

In the long-term, the ambition is to build a market platform in which environmental and societal benefits are delivered mainly through natural capital investment with non-financial returns, primarily focusing on net gain and enhancement of ecosystem services.

Overseeing the market platform, we are developing a “system operation” function, with governance, planning, technical and monitoring duties, coordination of activities, and setting the long-term strategy for the catchment. We are currently collaborating with DEFRA and the Environment Agency through the Cumbria Pioneer project, where the Environment Agency are piloting the concept of catchment system operator in the Windermere catchment, in parallel with a United Utilities led pilot in the Petteril catchment, looking at the wider combination of a system operator governance with a natural capital trading platform.



6 Embedding Partnerships Partnerships have a fundamental role in sustaining and improving ecosystem resilience as the environment does not respect boundaries. We recognise this and have significantly increased our capacity to work with key partners to identify and deliver greater resilience benefits for customers than we could achieve if we worked in isolation. We are involved in a very diverse range of partnerships which support protecting and enhancing ecosystems resilience, a few of which are highlighted here.

6.1 Catchment Based Approach (CaBa) Since the inception of the Catchment Based Approach we have engaged with catchment hosts to deliver environmental improvements which are valued by customers. As a first step we provided additional funding to the 16 North West catchment partnerships set up by Defra to enable them to build capacity. Working with local stakeholders, the partnerships have been setting out a long-term programme of actions and interventions to improve the status of water bodies in their catchment. Under our Catchment Wise initiative, which was aimed as supporting the catchment based approach, we set up an intervention fund that bidders could access with interventions aimed at moving to good status under the Water Framework Directive or sufficient status for bathing waters. The winning bids were chosen by a panel including the Environment Agency and United Utilities. One example of an intiative developed as a result of this funding is the ‘Call of Nature’ campaign6 aimed at raising awareness of septic tank owners of how they need to maintain their septic tanks in order to protect their local environment. This campaign is now being used by a number of Rivers Trust to address this key issue.

Since then we have moved forward with more significant projects such as the River Petteril pilot (see section 3.2.2). We have worked with the catchment hosts Eden Rivers Trust to understand the issues in a catchment and deliver sustainable solutions. Without building relationships with the catchment hosts, this would not have been possible. As we move forward we will increasingly work with catchment hosts where this offers the best value option to address an ecosystem resilience issue.

6.2 Natural Course, a European Union funded LIFE Integrated Project We are a participant in the innovative LIFE Integrated Project7 ‘Natural Course’ project funded by the European Union which aims to assist in the delivery of Water Framework Directive (WFD) obligations by encouraging collaborative working between organisations to ensure that investment is delivered in the most efficient way and multiple benefits are realised. This will improve the ability to deliver interventions by making them more affordable and also push innovation to improve the availability of solutions, making resolving problems more feasible. Meeting the WFD commitments by 2027 poses a major challenge to the UK and this will not be achievable without coordinating the efforts of all stakeholders. The project has a formal agreement between the five beneficiaries (Environment Agency, United Utilities, Association of Greater Manchester Authorities, Rivers Trust, Natural England) to work together to achieve defined actions. These actions are designed to help build capacity to work collaboratively and develop new projects which would be funded from elsewhere. There are also actions targeted at collecting evidence and demonstration projects to try and help leverage this additional funding from other sources.

Natural Course has a defined budget over the 10 years of the programme (2015-2025) to complete the defined actions. The overall budget for the programme is €20m of which the European Union will pay 60% of eligible costs. To support delivery of the Natural Course objectives we set up an Integrated Catchment Team who work across the water and wastewater service and are responsible for identifying and developing integrated catchment solutions and building projects that can be delivered through partnership working. There is also a collaborative team member from United Utilities that is responsible for helping to build these partnership projects and also linking our delivery plans with those of the other partners to ensure that any potential for collaboration is identified and delivered. As Natural Course has used the River Irwell as one of its key focus areas for collaboration there are some synergies with Defra’s Urban Pioneer in the Greater Manchester area.

6 http://www.callofnature.info/ 7 http://ec.europa.eu/environment/life/projects/ip.htm Copyright © United Utilities Water Limited 2018 31


Key highlights from Natural Course so far include:

• Delivery of a project to examine how natural capital solutions (so called green infrastructure) can help slow the flow of water in urban environments, working with a charitable partner City of Trees.

• Development of an ecosystems services map of the river corridors in the Irwell Catchment which highlights opportunities to develop and improve Natural Capital and the services this provides. This map will be used as part of the Natural Course planning processes to help develop multiple benefit investments to shape future activities.

• Working with Business in the Community (BiTC) to look at how non-domestic customers can use green infrastructure to reduce their overheads and improve the natural capital of their communities. This project will also deliver demonstration sites at a school and an NHS site.

6.3 Defra Pioneers focus on the North West Two of the four Defra Pioneer pilots are in the North West – the Urban Pioneer in Greater Manchester and the Catchment Pioneer in Cumbria. The purpose of the four Pioneers is to pilot approaches to deliver Defra’s 25 Year Environment Plan through collaboration. Through our integrated catchment approach we are actively supporting both Pioneers. The Pioneers are specifically seeking to test:

1. Tools and methods as part of an applied natural capital approach 2. Development and scaling up of innovative funding opportunities 3. A joined up approach to planning and delivery

Our Asset Management Director is a member of the Catchment Pioneer steering group and our major contribution is the integrated catchment management work on the Petteril catchment. Our Head of Sustainability is a member of the Greater Manchester Combined Authority Natural Capital Group, the steering group for the Urban Pioneer.

Lessons learnt from the pilots will be shared nationally to inform best practice.

6.4 Our long term partnership with the Royal Society for the Protection of Birds (RSPB)

We have an extensive history of a very beneficial partnership with the RSPB which has lasted over 25 years. Notable early successes include the Ribble Discovery Centre where RSPB continue to interpret the water cycle for over 5,000 school children per annum, the Birds of Bowland Project, where 3,000 visitors attend the Bowland Festival to learn about joint United Utilities and RSPB land management and the RSPB Nature Reserves on our Haweswater and Dovestone Estates. RSPB is our core partner in the Sustainable Catchment Management Programme (SCaMP), where they play a critical role in both advocacy work to secure political support for the programme and on-the–ground delivery itself. RSPB employees have been seconded to United Utilities to produce farm plans for SCaMP and RSPB policy teams work closely with us to promote all catchment management programmes.

The partnership has been of significant benefit to us for practical, financial and reputational reasons. In 2016 the partnership was awarded the Conservation Category Award at the Natura Awards Ceremony in Brussels. The Award recognises excellence in the management of Natura Sites. There were 83 applicants from 20 countries, including some very strong competition from the Iberian Lynx conservation project, which saved the species from extinction. The judges stressed replicability, commitment, socio-economic benefit and biodiversity gain as major factors to our win. Our strong partnership, the practical delivery of challenging and innovative restoration with real local involvement from fantastic volunteers, and additionally, the monitoring data (again with major volunteer input) has allowed us to demonstrate biodiversity benefits – from the wading bird Dunlin to water voles.

In 2012, the RSPB became the tenants of two farms, Naddle and Swindale, near Haweswater in the east of the Lake District National Park. Both farms are part of the catchment for Haweswater reservoir, which is our largest source of supply to customers. Together we are trialling land management methods that produce a high-quality livestock, alongside a range of public benefits including safeguarding water quality and wildlife. Successes to date include the



delivery of catchment restoration under SCaMP since 2010, Swindale Beck restoration, promotion and advocacy work. We are committed to being transparent about the farming operation and RSPB recently published an economic report showing the financial reality of farming in the uplands. In the light of the UK’s exit from the European Union there will be some significant challenges and opportunities for upland farming and land management. We hope that we can continue to innovate and trial alternatives, and share learning that will be relevant to the wider land management community and policy makers.

6.5 Delivering bathing water resilience with Turning Tides In 2012 we became a founding member of the Turning Tides partnership which was set up to address the threat that the North West’s bathing waters were at significant risk of performing poorly under the tighter standards of the revised Bathing Water Directive, which came fully into force in 2015. The partnership brings together local authorities, the Environment Agency, non governmental organisations and ourselves with a common vision to improve bathing water quality. Since the partnership formed, 18 bathing waters have moved from being at risk of a poor water quality classification to at least the sufficient standard and there has also been a four fold increase in the number of excellent bathing waters. We are now actively supporting this partnership to realise the benefits of this improved water quality. Additionally, we will work with partners to investigate whether we can further reduce the risk of bathing water quality impacting on people who visit the coast. The benefits delivered have exceeded those that we identified at the outset and this is likely to be due to the holistic approach taken which has left no stone unturned.

6.6 Flood management partnerships Partnerships are key to enhancing the resilience of the wider ecosystem to reduce the risk of flooding from our systems. We have a strong track record of partnership working with other flood management authorities. We regularly participate in Strategic Flood Partnership meetings and Making Space for Water meetings. We are also creating a new Flood Partnership Manager role, jointly funded by ourselves and the Regional Floods and Coastal Committee, which will further facilitate the promotion of collaborative activities that reduce flood risk from sewers and other non-water company drainage assets.



7 Environmental Net Gain We support Defra’s move to seek mandatory environmental net gains as part of development. As a major infrastructure provider in the North West of England we carry out a lot of development, which is often aimed at improving the environment. The condition of ecosystems is fundamental to the resilience of the services we provide. The move to include wider natural capital benefits as well as biodiversity, such as flood protection, recreation and improved water and air quality should support improvements to ecosystems resilience. In order to embed a “net gain” approach in the way we work we recognise the importance of shifting from purely considering addressing statutory investment needs at the lowest wholelife cost to thinking more holistically about how we enhance our services so they can deliver best value. This is a fundamental change in the way the industry works and it needs new tools and approaches to support it. For example, we need to be able to quantify the net change in the value we are delivering so we have started to further develop our Natural Capital approaches.

7.1 Natural Capital Accounting Natural Capital is defined as the stock of renewable and non-renewable natural resources (such as plants, animals, air, water, soils, and minerals) that combine to yield a flow of benefits to people. In essence, it describes the naturally occurring assets that make everyday life possible such as woodlands that not only provide wood but also clean air, biodiversity, carbon sequestration and recreational enjoyment. These benefits aren’t currently valued in decision-making (other than carbon) so society is, in effect, valuing this capital as zero without considering the longer term risk in doing so.

Natural Capital approaches and valuation are receiving considerable attention from governments, regulators and companies because of concern that society is making unsustainable decisions which impact on long term resilience. We rely on natural capital to provide the clean water that we then treat and supply to customers as well as to effectively drain the area that we serve. Our wastewater treatment helps to protect and enhance the natural capital of the North West through removing pollutant load before it is discharged back into the natural environment. We know that customers also get the benefit of experiencing the natural capital that we own through providing access and recreation on our sites. We have been exploring how natural capital approaches can help us to make better decisions about the management of our land, assets and business and make them all more resilient.

This understanding has the potential to change our views on risks and opportunities to our business. An understanding of the value of natural capital may also tip the balance in terms of the types of solutions that are determined to be the best option for customers with natural capital solutions gaining in prominence. The research into natural capital solutions we are carrying out currently in the River Weaver pilot catchment will help us to strengthen our capabilities in this area.

Developing a natural capital account will also help us to identify who might benefit from enhancing natural capital which could then point us to opportunities for alternative funding streams in addition to water bill payers. In the meantime in order to stimulate a natural capital approach, our business plan includes a performance commitment which will stimulate us to enhance natural capital over and above that we would deliver via conventional solutions. This measure has been co-created with customers, partners and stakeholders. We have engaged with our partners in Natural Course to align the measure with the ambitions of the European Union LIFE IP programme, to build capability to protect and improve our water environment. By including this in our plan it will ensure that we continue to innovate in this area.

A Natural Capital Account - In order to embed natural capital approaches within our business we will develop a natural capital account by 2022 which will help us to understand the true value of natural capital that we own or influence which means it can be factored into decision making.



Our approach to natural capital has been developed through our Corporate Responsibility Panel, Wholesale Board, Strategy Steering Group and board level Corporate Responsibility Committee. It is our ambition that our 2024 business plan submission will be underpinned by a natural capital account and we will have developed ways of accessing alternative finance. This means that our performance commitment to enhance natural capital will become less important as we embed natural capital approaches.

7.2 Corporate Natural Capital Account We are one of the largest corporate land owners in the UK with over 56,000 hectares of land. We have a long history of managing this land for multiple benefits, such as water quality, recreation, biodiversity and carbon sequestration.

To enable us to assess and track the value of the Natural Capital that we own we are undertaking a Corporate Natural Capital Account – based on the Natural Capital Committee’s framework - to help inform decisions over the future management of our land holding to ensure the resilience of the ecosystem service we rely on as a company. This project also includes training for our strategic land management and finance teams to enable further accounts to be completed by our own teams.

7.3 Water Resource Management Plan As part of our Water Resources Management Plan preparatory work we have undertaken a review of gaps and overlaps between current Water Resources Management Plan guidance and natural capital approaches. This provided a set of recommendations about Natural Capital approaches for the current and future planning cycles.

In summary, against our pilot objective of whether natural capital approaches will influence decision making, the work suggests that it has the potential to be more comprehensive than current planning methods although the data and frameworks are not developed enough for Water Resources Management Plan 2019. Our water resources team are now considering the recommendations and future work but we anticipate that the next plan, to be consulted on later this year, will include our aspiration to move towards a natural capital and ecosystem services assessment by Water Resources Management Plan 2024.

7.4 Development of a Natural Capital tool for the River Petteril As part of our integrated catchment thinking, we have undertaken a project in the Petteril catchment that has created an innovative ‘Natural Capital Integrated Catchment Optimisation Tool’ which will generate a Natural Capital account for the catchment and enables different catchment interventions to be modelled to assess the best way to achieve catchment outcomes.

We have undertaken two behavioural research sessions in the catchment to gauge customer and stakeholder views on integrated catchment management options. The results inform the tool and assess the Natural Capital benefits of the options and where these occurred.



7.5 Involvement in UKWIR Natural Capital accounting projects We have been on the steering group of two recent UK Water Industry Research projects:

• Benefits and limitations of integrating Natural Capital accounting and ecosystem services assessment into water company activities, and

• Implementing ecosystem service and Natural and Social Capital accounting approaches.

These projects aimed to get a consistent understanding across the industry and to provide a first attempt at a standardised industry tool for natural and social accounting for the sector.

7.6 Emerging market mechanisms We recently trialled the use of ‘EnTrade’, an online auction platform for improving the environment, to undertake a reverse auction with farmers located around our water supply boreholes in Cheshire that are experiencing increases in groundwater nitrate levels. The trial is to see whether they would plant cover crops in their fields over winter to reduce nitrates entering the groundwater. Around 12 per cent of eligible farmers took part in the auction and successfully bid to save a total of 7,500 kilograms of nitrogen. We will be assessing how the project goes over the winter of 2017 to see if this gives a more efficient way of reducing nitrogen levels over the longer term.

7.7 Developing a Natural Capital Performance Commitment We have developed a bespoke ‘Enhancing natural capital value for customers’ performance commitment that will enhance the service we provide by:

• stretching project outcomes whilst adding value beyond our statutory requirements; and • delivering more for less for customers across our wholesale price controls.

This added value (e.g. Natural and Social Capital) will incentivise and enable us to build upon our long-term vision of establishing Catchment System Operators, which supports resilient catchments and the effective delivery of Defra’s 25 year environment plan.



8 Summary of the AMP7 plan to enhance ecosystems resilience capability

In AMP7 we will take significant steps forward in improving our capability to enhance ecosystem resilience in ways that go beyond requirements that are placed on us by our regulators such as the Environment Agency. This is part of a long term plan to develop a Catchment System Operator capability which we see as vital if we are to play our part in enhancing ecosystems services for the benefit of people of the North West at an affordable cost. Some of the key features of our approach include:

• An evidence based approach to challenge uncertainty, target and prioritise risks and opportunities in the catchment, and develop flexible permitting by working closely with the Environment Agency

• A systems thinking process, looking at risks holistically, and developing a number of tailor-made solutions that deliver multiple benefits and efficiencies across our assets and the catchment

• Collaboration to achieve water quality objectives, reduce flood risk and drive wider natural capital benefits by working with local communities and stakeholders to drive catchment interventions

• Innovation to develop new ways to tackle pollution and natural flood management by working with natural processes such as reactive media to remove and recover phosphorus and wetlands as hybrid storage and treatment solutions

• Incentivising innovative funding and governance mechanisms at catchment scale through development of the catchment system operator trading platform and natural capital investment to deliver more for less and drive ecosystem resilience

• Developing natural capital accounting capability so that we can factor natural capital into our decision making in time for PR24


Documents

Ecosystem resilience approach › globalassets › z_corporate...Chapter 4: Supplementary Document - S4004 unitedutilities.com 1 Ecosystem Resilience Ecosystem resilience is the capacity