4The Future Ideas Lab is a place for anyone to submit their ideas on how Ofwat could evolve the price review to meet the challenges faced by the water sector.
In May 2021, we shared our ideas and ambitions for the 2024 price review (PR24) in PR24 and beyond: Creating together, tomorrow and set out four ambitions for what PR24 can achieve for customers and the environment, and principles for how we’ll approach and design the price review.
In December 2020, we published PR24 and beyond: Future challenges and opportunities for the water sector, where we set out that the sector faces profound challenges over the coming years and decades. As a regulator, these are Ofwat’s challenges too. But we also see great opportunities for the sector to deliver better outcomes for customers, the environment, and wider society.
PR24 a thu hwnt: Heriau a chyfleoedd y dyfodol ar gyfer y sector dŵr
As we look ahead to PR24, we’re thinking about how best to deliver our strategy, Time To Act, Together, through the price review. We’re also considering the lessons learnt from PR19 and before, and the challenges and opportunities ahead. With these in mind, we welcome contributions on the following twelve key questions for the sector:
- What could the water sector look like in 2040, and how can Ofwat and water companies work towards that vision?
- How do we best regulate to help companies to achieve long-term goals such as adapting to climate change, reducing leakage, improving water efficiency and delivery of net zero?
- How do we encourage companies to ensure services are affordable for all, both now and in the longer term?
- How can we encourage companies to innovate and to take advantage of technological change to increase productivity, reduce costs and improve resilience, service and the environment?
- How do we encourage companies to improve service to customers and operational resilience?
- How can we encourage companies to best take account of customer needs and priorities, while ensuring services are comparable across companies?
- What, if any, could the role of the price review be in encouraging or incentivising companies to better deliver public value?
- How do we better use markets to deliver better value to customers and the environment?
- How can we best account for specific issues, circumstances and Government policies/priorities in England and Wales?
- How can we best align the interests of investors with delivering for customers, the environment and society?
- How do we encourage companies to collaborate and work in partnership with others, such as on nature-based solutions, to better achieve outcomes for customers and the environment?
- How can we simplify the price review while increasing value to customers, the environment and wider society?
How to contribute
Thank you for your contributions. We received over 50 submissions for the Future Ideas Lab which we’ve shared below.
We published the Final Methodology for PR24 in December 2022, so the Future Ideas Lab is now closed.
Submissions to the PR24 Future Ideas Lab
Companies, stakeholders and customers have begun to contribute their ideas for how we can evolve the price review. The submissions we have received so far are linked below.
Bill Cutting, chartered engineer
Bristol Water – A simplified approach to setting ODI rates
Carmine Ornaghi – University of Southampton
Chartered Institution of Water and Environmental Management (CIWEM)
Fast Track Squared (sponsored by Severn Trent Water)
ICS – Customer Engagement for PR24 and Beyond (sponsored by Northumbrian Water)
James Thomas – Ofwat-Future-Ideas-Lab
NERA – Reviewing the Current Household Metered Tariff Structure (sponsored by Southern Water)
Northumbrian Water – Completing Emission Possible
Northumbrian Water – Resilient efficient services require healthy assets
Northumbrian Water – Supporting long-term investment
Northumbrian Water – Risk Free Rate (First Economics)
Northumbrian Water – Risk Free Rate (Oxera)
Northumbrian Water- Setting Notional Gearing (Frontier Economics)
Northumbrian Water – Estimation of beta and treatment of de-and re-levering (KPMG)
Northumbrian Water – Cross Checks for the Cost of Equity (MARs and others) (KPMG)
Skylight Consulting (sponsored by Anglian Water)
Thames Water – Regulatory options for complex projects
United Utilities – A review of options for further market participation in bioresources
United Utilities – Asset health in the water sector – framework proposal
United Utilities – Developing a National Approach to Customer Research
United Utilities submission – The Principles of Regulatory Cost Assessment
United Utilities – WINEP review discussion paper
United Utilities – Unlocking greater value through a national bioresources strategy
United Utilities – Unlocking nature-based solutions to deliver greater value
United Utilities – What lessons can we learn from cost assessment at PR19
United Utilities – Making the cost assessment framework resilient to future challenges
United Utilities – Storm overflow incentives for PR24
Wessex Water – Outcome Based Environmental Regulation
Yorkshire Water – Capitals-based incentives
Yorkshire Water – Assessing the relationship between cost and performance at PR24
Yorkshire Water – Delivering strategic priorities in the water sector
Yorkshire Water – Streamlining regulation