RCS - Dwr Cymru Welsh Wtr - Net zero carbon emissions for Welsh Water by 2040

PPLAnnouncement

04/06/2021 08:10

RNS Number : 8532A
  
Dwr Cymru Welsh Water
  
04 June 2021
  
 

 
4th June 2021
PRESS RELEASE
Welsh Water to deliver

net zero carbon emissions by 2040 
 
·    Welsh Water currently generates 23% of its own energy needs
·    Company is one of the largest energy users in Wales
·    Plans to become 100% energy self-sufficient by 2050
·    We have reduced our net operational emissions (market based) by 80%, resulting in a total carbon emission reduction of 65% since 2010
 
Alongside its annual results for 2020-21, Dŵr Cymru Welsh Water, the first, and still the only, not-for-profit utility company in Wales and England has announced that it plans to achieve net zero carbon emissions by 2040.  
 
As one of Wales' highest energy users with an annual energy bill of £46 million, the commitment will play a key role in combating the climate change crisis declared by Welsh Government and its goal to achieve net zero carbon emissions by 2050.
 
Welsh Water, which serves over three million people across most of Wales and some adjoining parts of England, relies heavily on energy to deliver its essential services. It currently generates 23% of its own energy needs through wind, hydro, solar and advance anaerobic digestion (AAD) with the rest procured from 100% renewable energy resources. The company plans to be

35% energy self-sufficient by 2025 and will invest a further £21 million to achieve this over the current regulatory investment period to 2025, ultimately becoming 100% energy self-sufficient - or energy neutral - by 2050. 
 
As well as committing to becoming carbon neutral by 2040, the company aims to reduce total carbon emissions by 90% by 2030. To transform water and wastewater services, the company has set aside a record budget of over £80 million for research and innovation over the next five years.  Between now and 2040 it plans to innovate how it harnesses nature through its biodiversity plan, peatland restoration, wetland treatment and catchment management.  
 
To provide detailed oversight of the strategy we have developed to deliver these objectives, and of the measurement and reporting of our progress against it, the Board has formed a new committee - the Environmental, Social, & Governance (ESG) Committee - chaired by Non-Executive Director, Debra Bowen Rees.
 
Welsh Water will also increase the use of renewables to become more energy self-sufficient.  Building on the success of its flagship £36 million energy park in Wrexham, North Wales, the company has recently invested £50 million into Cog Moors Wastewater Treatment Works in the Vale of Glamorgan. This will generate clean, green energy from sewage through its state-of-the- art Advanced Anaerobic Digestion (AAD) facility, creating enough energy to power the works which will make it an energy neutral site.
The company's ambitious plans coincide with its twentieth anniversary since being set up with its sector unique 'non-shareholder' ownership model. This model has resulted in its customers benefiting from more than £440 million - money that would have been distributed to shareholders in other companies - through additional investment in its services and supporting more than 127,000 customers to pay their water bills with our social tariffs scheme. As it already works with food banks and other agencies to promote the support it provides vulnerable customers, Welsh Water is marking this latest anniversary by donating £1,000 to over 100 different Trussell Trust foodbanks across Wales and Herefordshire.   
Glas Cymru Chairman, Alastair Lyons, said: "Today marks a significant moment for Welsh Water, as we announce our journey to achieving net zero carbon emissions by 2040. This is more than a target in relation to infrastructure or operational emissions: rather it's about changing the way we think, plan and deliver. As one of the flagship companies in Wales, it's about taking responsibility for managing the biggest challenge of our time in terms of climate change, focusing on the long-term and ensuring we help protect our customers, communities and the wider environment and create a better future for generations to come." 
 
Welsh Water Chief Executive, Peter Perry, said: "We have faced an unprecedented, challenging year in responding to Covid-19 but we have shown resilience and adapted the way we operate and provide our essential services. 
"As a company owned on behalf of our customers, we are rooted in the communities we serve. Our not-for-profit operating model continues to benefit our customers and communities and we are proud to announce our ambitious environmental plans to ensure that we can continue to provide an effective, resilient and affordable service for decades to come."
The announcement to achieve net zero carbon emissions comes as the company publishes its Annual Results for 2020-21, showing that it invested nearly £1 million a day in its water and wastewater services (£353 million in 2020-21) - with £44 million invested in environmental improvements during this period which will help protect the quality of rivers and coastal waters around Wales.
 
Welsh Water also confirmed that it has incurred additional costs of £34 million to help deal with the Covid-19 pandemic and protect public health while supporting 5,000 household customers in financial need, temporarily suspending payments for approximately 45,000 businesses which closed for a period due to the Government's social restrictions.
 
ENDS
 
 




 
Notes to Editors
 
Financial Results
·      Following eleven years of below-inflation average bills, in February 2021 we continued to set prices below the rate of inflation for a further year.
·      Gearing - total net borrowings as a percentage of regulatory asset value - currently at 60% compared to 93% in 2001 (2019-20: 60%)
·      Our credit ratings are amongst the strongest in the sector, which ensures excellent access to funding.  All credit rating agencies issued rating updates following Ofwat's determination in December 2019 and also following the Group's exposure to the Covid-19 pandemic - which they note is not material to Glas Cymru's creditworthiness.  Our credit ratings have remained unchanged since last year - with Fitch at A rating; Standard & Poor's at A- rating and Moody's continue to rate us as A3. All ratings have a stable outlook.
·      Capital investment during 2020-21 totalled £353 million (2019-20: £456 million), forming part of the £1.8 billion investment plan for 2020-25.
·      Operating costs were £329 million - £3 million higher than in the previous year (2020: £326 million)
·      Operating profit (before interest and tax) reduced to £7 million (2020: £36 million) primarily due to incurring exceptional items totalling £34 million.  This included our response to the Covid-19 pandemic comprising bad debt charges, personal protective equipment and increased hygiene and deep cleaning.
Operational Performance
·      In 2020, we achieved 99.99% compliance with drinking water standards tests (2019: 99.98%).
·      In 2020-21, the average customer minutes lost to supply interruptions was 11 minutes and 5 seconds compared to 2019-20 which was 17 minutes 46 seconds
·      Annual leakage was on target at 163.6 megalitres per day (2019/20: 169 megalitres per day) and represents the sixth successive year of achieving target.  This despite restricted interaction with customers during the pandemic and higher demand.
·      Good overall wastewater treatment works performance with a slight improvement on last year: 99.66% of works fully complied with discharge permits in 2020 (2019: 98.18%)
·      77 wastewater pollution incidents (2019: 94), of which all but 1 were "Category 3" (the least serious incidents) (2019: 0)
·      For internal flooding, we failed this target due to a significant storm weather incident in Newport in December 2020.   2020-21 saw 302 internal sewer flooding incidents (2019-20: 256)
·    For external sewer flooding, we exceeded our target; there were 3,806 external flooding incidents in 2020-21 compared to 4,518 in 2019-20.
 
Customer Service
·      C-MeX: Overall, we achieved our highest ever C-MeX score and customers rated us strongly in terms of both customer service and communication. In the final 2020/21 C-MeX results, Welsh Water achieved 4th place out of the 17 water companies and we were 3rd of the water and sewerage companies.  We achieved 1st place in the "non-contact" element of the survey and 4th in the "contact" aspect.  Perception of value for money was the main area that we can improve on, and we have an action plan in place to promote the value that our services and activity offers to customers.
·    Over 143,000 household customers already benefit from one of our sector-leading social tariffs and our Customer Assistance Fund - more than any other company in the sector. We also added over 340,000 vulnerable customers temporarily to our Priority Service Register to receive support during the pandemic.
·    We retained our position as the top-rated water company in Wales and England for customer service in the Institute of Customer Service survey.  We were also the only water company to be ranked amongst the Top 50 companies in the UK
·    Written complaints received in 2020-21 totalled 2,874 - which is up from 2,525 in the previous year. This can be attributed to some metered customers challenging their bills (in many cases bills were higher than for previous periods due to increased water usage during the prolonged dry and hot period in 2020 which coincided with initial pandemic related social restrictions) and other customers trying to manage historical debt issues.
 
 

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