Government raises prospect of water-saving incentives

Environment secretary Hilary Benn yesterday launched a government strategy to raise the profile of water conservation, offering a variety of measures which could result in businesses being offered financial incentives to cut water use.

The Future Water strategy sets out the government's long-term vision for water management in England, including plans to reduce water usage in the agricultural, construction, industrial and domestic sectors.

The strategy document urges more businesses to implement simple monitoring and water management measures, pointing to the fact that the adoption of best practices would allow a typical industrial site to save up to 30 per cent from its water and effluent bills at little or no cost. The report claimed that savings could increase to 50 per cent if capital were invested in long-term water saving projects such as grey water systems for capturing and reusing waste water.

To help aid adoption of such technologies, the strategy highlights the government's Enhanced Capital Allowance tax break scheme which offers firms " accelerated tax relief" on capital investments in water-saving systems that feature on its Water Technology List.

Barry Clarke, spokesman for utility trade group Water UK, welcomed the moves claiming they should encourage more businesses to adopt water saving technologies and policies.

The report also raises the prospect of incentives for firms that reduce their water usage and could result in near universal water metering in water stressed areas by 2030.

A spokeswoman for Defra downplayed the prospect of rebates or other financial incentive schemes, claiming that the primary driver for adoption of water-saving measures remained the opportunity to cut bills.

"It's a bottom line issue: if businesses use less water, they pay less saving money and the environment,” she said, adding that there are no current plans to reward particularly water efficient firms with further cash incentives.

However, with water shortages becoming an increasingly common feature of summer months, stronger incentives remain a possibility and the report does call for a review of water charging that "will encourage water companies to take a more flexible approach and consider the role of tariffs in future charging models".

Clarke predicted this would mainly affect domestic customers, who could be offered a "rising block tariff system" whereby an allocated amount of water used would be charged at one price and any subsequent water used – for washing a car, for example – would be priced at a higher tariff. This could also work on a seasonal basis, Clarke said, with summer water prices costing slightly more.

He added that similar deals could be negotiated by firms on a case-by-case basis.

"There are already more flexible arrangements for large water intensive companies," said Clarke. "It's for them to talk to water companies and see how they manage water in a commercial sense."

The strategy document also proposes the widespread replacement of asphalt with more porous materials for large flat areas such as new car parks as part of an attempt to aid drainage and prevent urban flooding.

In related news, a report by Sustainable Asset Management released yesterday has found that due to global warming, water is becoming an increasingly valuable commodity and in response, innovative companies are opening up new high-margin business fields that focus on the supply, distribution and treatment of water.