Impact case study database

Impacts arising from the research described above fall into two categories. The first is influencing the water resource planning decisions made by water companies and regulators in England and Wales through new tools and approaches. The second is influencing major hydropower investment decisions by international development organisations.

Water supply planning and regulation in England and Wales

Combined water resources and supply infrastructure networks at water company, regional or national scale are complex, often involving multiple stakeholders, region-specific infrastructure, and competing priorities. Consequently, computer model-based infrastructure for investment decision-making has been the industry norm since 2002. Companies traditionally used a statutory least-cost planning approach called the ‘Economics of Balancing Supply and Demand’ (EBSD), which optimises the schedule of cost-effective supply or demand schemes.

In the last decade, UMWRG has worked with various stakeholders in the UK water industry, such as Thames Water, Anglian Water, the Environment Agency (EA), Ofwat (the financial regulator), regional groups such as Water Resources East (WRE) and Water Resources South East (WRSE), and industry bodies such as UK Water Industry Research (UKWIR). Based on research into resource modelling and decision making in water resources [1-4, A], UMWRG recommended three extensions to least-cost EBSD modelling: to apply the ‘multi-criteria paradigm’ (multi-criteria visualisation methods to explore how nearly-least-cost investment options perform on other non-financial measures) [A]; to use simulation-based multi-criteria optimisation [1, 3]; and to explicitly value flexibility and adaptability in infrastructure option optimisation [4, A].

UMWRG has had strong, ongoing collaborations with the EA to improve their capacity for guiding and scrutinising water resource investments from water companies. The EA’s 2017 and 2020 statutory guidance on water company water resource management plans [B], which companies are legally obliged to follow, says that companies should use the method co-authored by UMWRG [A, B]. For example, the 2017 guidance on technical methods to use states “ You should identify your solution(s) using the most appropriate method for your company. You should refer to UKWIR (2016) WRMP 2019 Methods – decision making process guidance”, which is the UoM-authored guidance that includes UMWRG methods and tools [A]. UMWRG’s emphasis on using adaptive planning methods continues to influence the EA, which has recommended the use of such methods for the first time in their July 2020 water company planning guidance document [B]. The EA’s regulatory power extends across England, and thus their guidance to water companies impacts upon all residents of England.

In 2018, UMWRG was approached by the EA to build a first national water supply-demand planning model, designed to identify cost savings and resilience benefits achievable via an optimised mix of inter-regional water transfers. This model was built with UMWRG’s Pywr model [5], and is hosted online using our Hydra Platform [6]. The model’s results influenced the content of the 2020 National Framework EA-led report [C, D], leading the EA and Ofwat to increase their scrutiny of proposed water transfer plans by water companies. Using UMWRG models empowers the regulators by giving them the ability to perform their own optimisation of the national mix of water transfers, providing “ crucial evidence” [D] in scrutinising water companies’ proposals using their own preferred criteria. The EA characterises the tools provided by UMWRG thus: “…a tool that provides regulators with a systematic national-scale view of how different solutions can meet future water needs, is in the public interest” [D].

In March 2020 UMWRG was awarded the tender to build an extension of the National Framework supply-demand model to allow the three water regulators (Ofwat, the EA, and the Drinking Water Inspectorate) to optimise and assess ‘baskets’ of water resource investment planning options [E]. This project finished in November 2020, and incorporates UMWRG’s multi-criteria assessment methods into models for assessing water resource investment, built with the Pywr simulation software [E]. The value of our models was summarised by Ofwat: “ In the 2020-2025 period water companies in England and Wales will be investing over £51 billion. The tool being built with UMWRG provides regulators with a simple, systematic, country-scale view, enabling the partnership to simulate and compare different combinations of water supply options. The output supports exploration of which solutions offer the best value in the public interest” [E].

The biggest change in English water planning in the last decade has been the growing influence of regional groupings of water companies (in lieu of each company only making decisions on assets within its borders). Two major English groups are WRE (comprising Anglian Water, Affinity Water, Essex and Suffolk Water, Severn Trent, and Cambridge Water Company), and WRSE (comprising Affinity Water, Portsmouth Water, SES Water, South East Water, Southern Water and Thames Water). UMWRG began working with WRSE in 2010, and WRE in 2011.

WRSE uses an EBSD model built by UMWRG in collaboration with the EA, which WRSE described as “ ...key to our 2018 strategy for the South East” [F]. WRSE commissioned a Pywr [5] model (built by Atkins) in 2018, and this was used in a 2019 UMWRG study of WRSE decision-making robustness – WRSE described UMWRG as having made “ a significant contribution to the planning of water resources and water supply provision in the populous South-East of England” [F]. The total value of asset investment that was considered in WRSE’s region of responsibility between August 2013 and July 2020 is GBP7,000,000,000 [F]. These investment decisions affected some 19 million people’s water supply in this region, as well as supplying industry and commerce which represent some 40% of the UK’s GDP [F]. WRSE’s Director described UMWRG’s contribution to their planning processes as “ ...instrumental in supporting strategic water infrastructure investment for the benefit of water security and resilience for both people and environment now and for future generations” [F].

WRE uses Pywr and, since 2019, uses an EBSD model designed by UMWRG, as well as analytical decision-making approaches designed by UMWRG [1, 3, A, G]. These tools have greatly enhanced the ability of WRE to model planned infrastructure investments, accounting for important criteria that were previously absent [G]. WRE confirms, “ Without UMWRG assistance […] WRE would likely not have been as effective, transformational and influential as it has been in the 2014-2020 period […] we have been able to consider more decision factors than our previous models including environmental sustainability, water availability for the agri-food sector and supply system performance including vulnerability to drought and climate change, reliability and resilience” [G]. These UMWRG tools and methods have been used to inform GBP1,300,000,000 of investment as part of Anglian Water’s statutory Water Resource Management Plan for 2019 (WRMP19), affecting the potable water supply of 6 million people in England [G]. UMWRG tools are also being used by WRE to help its member companies plan for WRMP24 [G]. WRE is planning to develop two new public water supply reservoirs with an associated cost of GBP1,700,000,000, and have chosen to develop UMWRG tool applications to optimise multi-sector value in these projects [G].

Thames Water used UMWRG models and software [1, 5, 6] in their statutory WRMP19 [H]. WRMPs are exceptionally important in the water industry, as Thames Water explain: “… developing an efficient, evidence-based plan that represents best value-for-money investment is crucial to the business and its customers” [H]. Thames Water’s plan evaluated and optimised options using eight criteria (instead of cost only), including environmental impact, inter-generational equity, resilience, and carbon emissions [H]. This approach was introduced through UMWRG’s collaborations with Thames Water since 2012, including two funded PhD studentships, and Harou serving on Thames’ Expert Panel. As a result of their WRMP19 planning, Thames Water have committed to making GBP750,000,000 of investments in infrastructure over the five-year period of the plan, all of which has been shaped by UMWRG’s planning tools [H]. Thames Water supplies water to 15 million people in London and the Thames Valley in South-East England. All of these people have been affected by UMWRG’s influence on Thames’ investment planning.

System-scale design approaches for hydropower systems around the world

National ministries of water and/or energy, energy system regulators and river basin agencies influence how countries invest in hydropower projects. Individual hydropower projects are proposed by such organisations, evaluated by international funders with financial, environmental and social metrics, and their implementation is then decided on. Typically there is limited evaluation of how a proposed project will impact other existing or future hydropower dams, or how it will impact other water-using sectors. Optimising hydropower investments to meet multiple sectoral and regional performance metrics is not common practice. Between 2015 and 2019, UMWRG developed new methods and tools for system-scale optimisation of hydropower infrastructure investments [2], promoted and applied them [A] to real hydropower systems internationally.

UMWRG has worked with international organisations that advocate for a more strategic approach to hydropower investment. This resulted in international policy documents [A] published jointly with organisations like the World Bank, the International Union for the Conservation of Nature (IUCN), the World Wildlife Fund (WWF), The Nature Conservancy (TNC), and the Stimson Centre think-tank. As an example, the WWF has collaborated with UMWRG on several major reports into water-energy system design [I], and has “ integrated the work of UMWRG into our engagement with governments in Myanmar, Nepal, Zambia, among other countries” [I].

UMWRG has acted as a consultant to organisations such as the International Finance Corporation (IFC), producing reports on specific hydropower investment projects [J]. UMWRG produced a report (in conjunction with TNC) for the IFC on the USD2,000,000,000 Sounda Gorge hydropower project (Republic of Congo) [A, J]. UMWRG recommended other, more strategic investments than those being considered by the IFC at the time, and the report demonstrated that the Sounda Gorge project would be difficult to complete. As the IFC state, “ The study helped IFC refine its preferred concept for Sounda, whose implementation in compliance with IFC's Performance Standards would be challenging, technically complex, and involving major mitigation costs” [J]. Consequently, the project has not gone ahead, and the IFC has paused its participation whilst the Government considers its options. Half of the estimated cost would have been paid for by the people of the Republic of Congo, and so UMWRG involvement has helped to prevent the miss-spending of their money [J].