Assessing sustainable water sources

15th June 2023

Steve Mustow and Cathy O’Connor discuss environmental assessment of water industry strategic resource options.

Pressures of climate change, population growth and the need for greater water supply resilience have led the water industry to develop strategic resource options (SROs) which seek to make best use of sustainable water sources between companies and across the country. Ofwat (the Water Services Regulation Authority) allocated funding to nine water companies to develop 17 SROs during 2020-25 in the 2019 Price Review (PR19) final determination. These schemes are being developed in a series of ‘gated’ stages overseen by a partnership of regulators consisting of Ofwat, the Environment Agency and the Drinking Water Inspectorate, collectively known as RAPID (Regulators’ Alliance for Progressing Infrastructure Development). Work to develop SROs started in 2019 at Gate 1, involving water companies identifying potential scheme options and undertaking initial high level feasibility studies to identify those suitable to be carried through to Gate 2. Subsequent work at Gate 2, completed by November 2022, has involved more detailed appraisal and identification of one or more preferred options. Those SROs that receive approval from RAPID at Gate 2 will pass into Gate 3, which will involve developing the preferred option to the point where it can go forward for planning and regulatory approval at Gate 4.

Outline of the SROs

The SRO schemes include water transfers, water recycling and new reservoirs. A desalination plant in Hampshire was considered by Southern Water but the proposal was subsequently dropped following feasibility assessment. Examples of SROs that have recently completed their Gate 2 submissions include:

1. Poole Effluent Recycling and Transfers SRO – diversion of treated effluent from the Poole sewage treatment works to the River Stour, via a pipeline, new water recycling centre and wetland, to augment flows during drought conditions.

2. Severn to Thames Transfers SRO – transfer of water from the Severn River system to the Thames during drought conditions.

3. Fenland Reservoir SRO – construction of a new reservoir fed by river flows from the Great Ouse catchment during times of high rainfall.

To progress further through the RAPID approval process, the need for an SRO must be clearly evidenced within company and regional water resource management plans. Those that are progressed through to construction will be subject to planning approval under the Town and Country Planning or Development Consent Order (DCO) regimes, as well as requiring regulatory consents such as abstraction licences, if relevant.

Approach to environmental assessment

As the SROs are included as an element of a water company’s Water Resources Management Plan and a regional water resources planning group’s Regional Water Resources Plan, they have therefore been considered within Strategic Environmental Assessments (SEAs) conducted for those plans.

In parallel, at Gate 1, when the feasibility of numerous options was being assessed, RAPID required environmental assessment equivalent to initial stage SEA. This was accompanied by initial stage Water Framework Directive (WFD) Assessment, Habitats Regulations Assessment (HRA) Invasive Non-Native Species (INNS) Assessment, Biodiversity Net Gain (BNG) Assessment and Natural Capital (NC) Assessment. At Gate 2, as the number of options were narrowed down, the designs of the preferred options were developed and additional data were collected, these assessments were updated and expanded to cover key areas. In the case of SEA, where the SRO was determined to be more project than plan or programme based, the RAPID Gate 2 guidance identified ‘initial environmental appraisal’ (IEA) as an alternative to SEA. The RAPID Gate 2 guidance provided high level requirements for the IEA which would essentially include elements of both early-stage SEA and EIA (Environmental Impact Assessment).

Guidance for Gate 3 published by RAPID in August 2022 states that for most solutions a statutory EIA will be required to support planning and permitting applications. At Gate 3 this should be sufficiently advanced to support EIA scoping requirements, with the subsequent stages of the EIA being completed at Gate 4.


Many of the SROs involve development over large areas and along extensive linear routes. They will therefore require a significant amount of environmental monitoring, modelling and assessment as part of the EIA and other environmental consenting processes. The SROs are being designed to provide multiple environmental benefits, such as ecological enhancement, amenity resources, and protection of existing water bodies, as well as making water supplies more resilient. However, due to their nature and size and in common with other major infrastructure projects they could cause potential environmental impacts which require assessment and if necessary, avoidance, mitigation or compensation. Many of the potential impacts relate to the aquatic environment but terrestrial features could also be affected, due to the construction and operation of reservoirs, pipelines, water recycling centres and other infrastructure. Examples of risks to the water environment include the potential to provide dispersal routes for INNS, to alter water levels in rivers and thereby affect habitat features, and to add nutrient loads. As a result, the SRO assessment process has included specialised aquatic environmental assessment from the outset. Also, given the nature of SROs, many lend themselves to providing biodiversity net gain and to increasing natural capital, for example by creating wetlands and providing leisure activities associated with new reservoirs. For that reason, and to meet statutory/regulatory requirements, BNG and NC assessments have been undertaken from Gate 1 onwards.

A staged approach has been important in the development of the SRO schemes to provide a sufficient level of information to support option selection while avoiding unnecessary work. For some SROs it has been necessary to conduct extensive monitoring and modelling at Gates 1 and 2, however it has been important to limit that to the level required to inform the selection of options. There would be little point, for example, in carrying out full ecological surveys for multiple pipeline routes, only one of which would eventually be selected. The output of each gate has therefore required gaps to be identified and requirements for monitoring and modelling at the next stage to be described. Such work sometimes involves addressing new areas, for example modelling the likely quality of recycled effluent based on the performance of new pilot plants and assessing potential impacts from emerging contaminants such as PFAS (perfluoroalkyl and polyfluoroalkyl substances).

Given that some SROs have been commenced at a plan or programme level and will be progressed to a project level, commencing with an SEA approach and moving on to an EIA approach during the gated process is sound practice.

As outlined above, the SRO schemes are charting important new ground in the way that environmental assessment, which is both effective and proportionate, should be carried out for major infrastructure schemes, both in the water and other sectors. The process developed by RAPID demonstrates a holistic, national approach to address the issues; all water companies are working to the same timetable, using the same guidance; and the findings of the environmental assessment work are key within the decision-making process. The approach also demonstrates good practice in relation to options assessment, with environmental factors being a key consideration when narrowing down multiple initial options to select a preferred option.

Steve Mustow is environmental consulting and consenting director at Stantec, Cathy O’Connor is principal environmental advisor at Stantec.


Please note: the views expressed in this blog are those of the individual contributing member and are not necessarily representative of the views of IEMA or any professional institutions with which IEMA is associated.


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