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Eco-Solution icon Eco-Solution: South Staffordshire

Partnering to Ensure Water Availability

Key Environmental Performance Area:

  • Water Use (Products and Services)

Collaborating on development of Europe’s largest water recycling system.

Committed to increasing the area of land under biodiversity management by at least 50 additional hectares by 2020.

All data and information in this case study are as of December 31, 2015, unless otherwise noted.

Challenge

Providing access to safe, reliable water can be a challenge, especially in areas experiencing water stress and water scarcity, which is occurring in parts of the UK. Along with climate factors, increasing populations and increasing demand can put pressures on the availability of quality water, water ecosystems, and water supply infrastructure. Water companies have a responsibility to assess and manage these risks so that they can ensure supply of clean, safe water to its customers, without disruption.i

South Staffordshire Plc ("South Staffordshire") is a water company in the United Kingdom that owns and operates two regulated water concessions solely responsible for the integrated water supply chain in the West Midlands and Cambridge areas. It also manages a non-regulated business that provides specialist services to other UK water companies and utilities under medium-long term contracts.

Response

South Staffordshire was formed in 1853 as the South Staffordshire Waterworks Company, which was to provide "an abundant supply of pure water" to the inhabitants of the towns of the Black Country, the heart of the industrial revolution in the UK. As the company has grown over multiple generations, it has continued to focus on the core mission of supplying clean, safe water to a growing population. To achieve this mission, the company has focused on: minimizing supply disruption impacts on customers; maintaining pipes and networks; investing in efficient pumping stations to ensure secure and reliable supplies; and increasing education engagement around water efficiency practices. In addition, the company is utilizing its expertise in water quality and water management to improve its engagement with the communities it serves as well as the water and biodiversity quality of the surrounding areas. Examples include developing a significant rainwater harvesting project with the University of Cambridge and enhancing biodiversity in one of the catchment areas where South Staffordshire operates.

Resultsii

Through its focus on providing safe, reliable water, South Staffordshire has played an important role as a utility provider and community partner. In addition to its performance on water supply and quality, South Staffordshire’s rainwater harvesting and biodiversity enhancement are also driving measurable results.

Water Management and Supply Performance

By working to manage its networks and water availability, the South Staffordshire has maintained positive performance in key metrics for water supply at its two businesses, South Staffs Water and Cambridge Water. This helps reduce water loss and expenses related to managing water quality and disruption issues.

South Staffs Water 2010-2011 2011-12 2012-13 2013-14 2014-15
Water quality performance against regulatory water quality standards 99.983% 99.971% 99.910% 99.952% 99.978%
Number of mains bursts/1000km 206 172 142 136 133
Water efficiency savings
Million liters/day
0.55 0.99 0.56 0.56 0.28
Cambridge Water 2010-2011 2011-12 2012-13 2013-14 2014-15
Water quality performance against regulatory water quality standards >99.99% 99.93% 99.98% 100% 100%
Number of mains bursts/1000km 178 161 127 116 131
Water efficiency savings
Million liters/day:
0.14 0.3 0.14 0.12 0.14

North West Cambridge Rainwater Recycling System

The North West Cambridge Development is the largest single capital project that the University of Cambridge has undertaken in its 800-year history. As part of this project, the developers are focused on building responsible water management systems. The efficient use of water is particularly relevant for the Cambridge region as East Anglia is one of the most water-stressed areas in the UK. The east of England includes some of the driest areas in the countryiii and is described officially as semi-arid.

When complete, the development project will be differentiated in the UK and the properties on the development will comply with or exceed the Code for Sustainable Homes Level 5, making it one of the most water-efficient development projects built to date. It will also include Europe’s largest water recycling system. South Staffordshire’s role in this aspect of the project is a significant component of its community engagement efforts, which help ensure ongoing customer satisfaction as well as enhanced relationships with relevant regulatory bodies.

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Three actions will be taken to meet the water efficiency goals for the project.

  • Rain and surface water from across the project site will be captured and channelled via swales and ditches to a series of specially designed lakes and naturally filtered through reed beds on the western edge of the development.
  • Water will be drawn from these lakes, through the reed beds, to a plant that will treat it to rainwater harvesting to British Standard 8515:2009, being re-filtered, sterilized by ultraviolet light and dosed with chlorine, and then delivered to all the proposed dwellings using a reticulation system laid in parallel to the potable water system. There will be 300m3 storage of non-potable treated water held on the site.
  • The agreement will see two water supplies installed on the 150-hectare site – one that recycles rain and surface water to use for toilet flushing, clothes washing, and garden watering, and another supplying high-quality treated water for drinking, cooking, and bathing.

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Collaboration between partners was foremost in the development of the catchment and treatment risk assessment methodology for the rainwater harvesting process. The design seeks to ensure the highest level of raw water quality is maintained in the catchment area and thus maximize use of the system.

When the water recycling technologies are used in conjunction with high-efficiency water fittings, such as aerated showerheads and taps, the development is expected to reduce average potable water consumption down to 80 litres per person per day, almost half of the UK average. The agreement is a vital part of delivering the Sustainable Urban Drainage System across for the 150-hectare site, which will enable the university to meet its ambitious sustainability targets for the development, supporting the target to meet the Code for Sustainable Homes Level 5.

Biodiversity Enhancement for the Asset Management Programme 6 (AMP6) Catchment Area

South Staffordshire has a commitment to develop operations that are environmentally sustainable and supported by customers and regulators throughout the engagement process. The company owns a diverse range of sites across both regions, reviews the potential for biodiversity improvements across these landholdings, and, where appropriate, adopts management programmes for the long-term improvement of biodiversity. To track performance, South Staffordshire measures the number of hectares under biodiversity management. South Staffordshire has committed to increase the area of land under biodiversity management by at least 50 additional hectares by 2020. To do this, the company will:

  • Fund projects to protect and enhance the region’s biodiversity.
  • Minimize the impact of its operations and capital programme on the environment.
  • Enhance biodiversity on South Staffordshire landholdings.
  • Work with other stakeholders to enhance biodiversity and promote awareness and education on conservation issues in its regions
  • Develop a catchment-based approach to realize wider environmental benefits.

Water Services Regulation Authority (Ofwat) Performance Commitment - Number of Hectares (ha) Under Biodiversity Management
Starting levelCommitted performance levels
Unit2014-152015-162016-172017-18 2018-192019-20
ha667691106116116

To raise the profile of the company’s work on biodiversity and the environment, its Environment & Biodiversity Partnership Fund will be promoted to the wider community and the benefits of proposed projects to the community are included in the assessment criteria. The company will work with ecology and conservation organizations, such as the Wildlife Trust, on outreach education days, primarily into local schools with a connection to its ongoing biodiversity activity. In addition, the company has developed an environmental protection scheme called SPRING to aid with on-farm improvements that will lead to long-term water quality benefits. The voluntary scheme, which is partially funded by South Staffs Water, will provide grants to farms for on-farm infrastructural improvements and agricultural management schemes, resulting in protection of the environment and improvements in water quality. It will also fund substitution trials for use of alternative products.

South Staffordshire began participating in KKR’s green program in 2016 and is communicating results for the first time. For more information on South Staffordshire’s efforts, please visit its website.


i Kowalski, Mark, Carmen Waylen, Sarah Clist, Sarah Wilcox, Stephen Lynn, and David Garrow. "Freshwater availability and use in the United Kingdom." WRAP UK. November 2011. Web. 25 July 2016. http://www.wrap.org.uk/sites/files/wrap/PAD101-201%20-%20Freshwater%20data%20report%20-%20FINAL%20APPROVED%20for%20publication%20vs2-%2005,04,12.pdf.

ii Self-reported portfolio company data is not calculated, reviewed or independently verified by KKR or KKR Capstone. For more information regarding the results methodology for companies evaluating their own data, please see the methodology section. There is no guarantee that any GSP-related avoided costs or added efficiencies will positively impact the portfolio company’s valuation or performance.

iii “Eastern England: climate,” Met Office, last updated October 2015. 31 July 2016. http://www.metoffice.gov.uk/climate/uk/regional-climates/ee.

Unless otherwise noted, portfolio company data represents 2015 results, published in August 2016. These case studies may contain forward looking statements including descriptions of planned projects and projected results and savings. These statements are subject to the risk that the projects will not develop as planned or at all or that projected results and savings are not realized.