Name
A regulators review of PR24 and look ahead to PR29 and beyond
Description

During the PR24 price review process numerous challenges arose for bioresources, which required rapid policy development and led to an intense period of work for all parties. This culminated in a significant increase in allowances (Base & enhancement) from £3.4 billion in PR19 to £5.6billion at PR24 (increase in enhancement spend from £61 million, to £1.9 billion), and supported actions associated to WINEP SUiAR and the long-standing issue around IED.

Extensive engagement with companies, Defra and the Environment Agency led to us amending the base models to incorporate greater funding for AD/AAD, introducing enhanced cost sharing for bioresources and IED, and developing a notified item to deal with uncertainty related to application of treated sludge to agricultural land. We consider there to be flexibility within PR24 to give companies the opportunity to take low/no regrets decisions.

Looking forward, the Ofwat innovation fund has successfully awarded five projects that will provide further insight into opportunities for enhanced/alternative sludge treatment and management activities.

There is significant uncertainty/challenge ahead, and a real opportunity for the sector to come together now and define a clear vision and objectives to ensure the long term sustainability of the bioresources sector through PR29 and beyond.

Authors
Tom Biochot and Eugenia Vela, Ofwat, UK
Track
The Bigger Picture