Green recovery

In July 2020, we along with Defra, the Environment Agency, the Drinking Water Inspectorate (DWI), and the Consumer Council for Water (CCW) wrote a letter to water companies and challenged them to identify ways to support the country’s green economic recovery from Covid-19.

We set out our ambition to build back greener from the pandemic: delivering lasting environmental improvements for current and future generations, whilst meeting the economic and social challenges England faces.

Water companies were asked to bring forward new proposals and accelerate existing ones to deliver an innovative and more resilient future for customers, society and the environment.

Together with Defra, the Environment Agency, the DWI, and CCW, we set out our green recovery assessment criteria in November 2020.

We received formal proposals from water companies in January 2021.

In May 2021, Ofwat set out draft decisions to support £862 million of new, green investment projects.

In July 2021, we published our final decisions to give the green light to invest £2.7 billion on building back greener.

This package of new investment includes help to eliminate harm caused by storm overflows and trial the creation of two new bathing rivers; collaborating with local partners to reduce the risk of flooding, protect habitats, and cut pollution; and innovative improvements in drinking water treatment and supply. This action will help to restore and create a natural environment that current and future generations can be proud of.

Severn Trent Water, South Staffs Water, South West Water, Thames Water, and United Utilities will invest an extra £793 million, on top of their existing five-year PR19 packages, to help the green economic recovery. These companies, along with seven others in England, are also bringing forward £1.9 billion worth of extra statutory environment schemes into the 2020-25 period.


Key documents

Green economic recovery: Overview of final decisions

Green economic recovery: Final decisions (updated 29 July 2021)

Green Recovery cost allowance adjustment model

Green recovery time value of money adjustment model

Cost sharing total costs reconciliation model

Severn Trent licence change consultation

South Staffs licence change consultation

Green economic recovery: Draft decisions consultation and responses

Green economic recovery: Overview of draft decisions

Green economic recovery: Draft decisions

Tax impacts of green recovery expenditure – Consultation

Consultation on green recovery reconciliation models

Modification of the Conditions of Appointment of Severn Trent Water Limited

Modification of the Conditions of Appointment of South Staffordshire Water plc

Reasons for the modifications to Condition B of the licences of Severn Trent Water and South Staffs Water

Severn Trent Water green recovery change request – addendum August 2022