Engaging with farmers to address key surface water quality pressures
England, Europe
Severn Trent is a privately owned and publicly listed water company which serves over 4.3 million customers in the West Midlands (including the cities of Birmingham, Coventry, Warwick, and Shrewsbury). It provides water and waste water services in an area that covers the catchments of two of the largest rivers in England, the Severn and the Trent. The company has invested substantially in protecting water resources and improving water quality at catchment level to reduce its treatment costs, deliver on its responsibilities to improve water quality under the Water Framework Directive (WFD), and benefit the environment.
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Challenges
Severn Trent has a strong environmental track record (with close to 100 percent compliance on environmental discharge standards). There are still 500 water bodies failing to achieve “good status” as per the WFD, however, although the company is a main contributor in only 40 percent of these cases. Challenges relate mostly to water quality from diffuse agricultural pollution and degraded ecosystems, such as peatlands, in the catchment area. Severn Trent has identified that some of the water pollution issues it faces could be addressed only through catchment-based approaches rather than through hard engineering solutions.
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Financing
Severn Trent could make such investments thanks to regulatory support (Ofwat, the economic regulator for England and Wales, is a strong supporter of the Catchment Based Approach introduced by Defra, the Department for the Environment, Forestry and Rural Affairs). Severn Trent has invested its own resources (from water tariffs) in those schemes and has sought to mobilise matching funding from other sources, including European grant programmes (e.g., LIFE), public subsidies (from the UK Environment Agency), and farmers themselves. For example, it is investing £1 million in the Moors for the Future programme over the 2015-2020 period and is benefiting from matched funding from EU LIFE (grants of £3 for each £1 invested by the company). Going forward, following extensive customer consultation which confirmed a willingness to pay for environmental improvements, the national water industry regulator, Ofwat, has agreed to include an outcome-based payment into their tariff setting formula linked to their environmental performance. It is projecting to increase such investments under the next business plan period (AMP7, 2020-2025). One key issue it will face: public funding for its implementation partners (such as the Rivers Trust) is going down and will be affected by impending cuts in EU funding. It will need to identify alternative sources of co-financing.
Actions & Impacts
Severn Trent has deployed a range of actions to protect water resources and restore functioning ecosystems to achieve environmental standards at least cost. It has eight agri-scientists on staff and others who are seconded in river and wildlife trusts, major implementation partners for them.
- Peatland restoration
Heavily degraded peatlands are present throughout the UK, as a result of decades of draining and overexploitation by land owners. Degraded peat leads to erosion (thereby impacting water colour and increasing the risk of flooding) and releases carbon into the atmosphere. More than 1 million of Severn Trent customers are served from water sources in the Peak District, where the peat bogs have been severely degraded over many years. Peatland degradation means that the water runs off quicker into reservoirs and results in water coloration, which is very hard (and expensive) to treat. Over the last 10 years, Severn Trent has been involved in the Moors for the Future partnership with many other organisations, such as the Peak National Park, the National Trust, the Environment Agency (the environmental regulator), United Utilities (water company) and local organisations. The project focuses on restoring peatland through revegetation, blocking gullies and tree planting. Even though Severn Trent’s interest stemmed from improving water quality, these efforts also generate biodiversity and carbon sequestration benefits. This work helps with avoided investment costs at the treatment site and avoided operating costs (chemical use) equivalent, which means that there is a strong financial case for it. Early evidence has confirmed the business case for this type of activities, and the company has decided to increase its investments in this area.
- Improved agricultural practices
Several water companies, including Severn Trent, have been engaging with farmers to address water pollution from metaldehyde, a highly polluting metallic compound included in pellets to kill slugs. This is extremely costly to treat once it has entered surface water. Severn Trent had 11 catchments where this was a significant issue. It has engaged with over 2,000 farms and make payments of up to £8 per hectare to help farmers switch from metaldehyde to ferric phosphate, which is much less harmful for the environment. Farms can receive grants of up to £5,000 per farm to address any water quality issue that requires infrastructure investments and land management changes. After two and half years of implementation, metaldehyde contamination has dropped rapidly, and 10 out 12 treatment works became compliant by 2017. Severn Trent also makes small grants to farmers via the Cash for Catchments program to support small, community-led projects that can restore ecosystems, preserve biodiversity or help with natural flood management, river restoration, or control of invasive species.
References
Horne, Malcolm. Nature-based Solutions for Water Resources Management. Workshop organized by The Nature Conservancy. 16 January 2019. London.
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