Multi-sector reservoir systems: Creating a usable commercial and legal model

Why RAPID, Anglian Water, Northumbrian Water Yorkshire Water and Water Resources East are working collaboratively on this project?

RAPID has established three working groups with fellow regulators and the industry to develop thinking on areas of the regulatory and commercial framework for strategic water resource solutions.

One of the areas being considered by the Pricing, Incentives and Risk Working group is how different commercial models can accommodate multi-sector and multi-party projects. The proposal to undertake this study was an interim output from the working group. The development of a commercial model which provides a template for future multi-sector solutions has benefits for all of the above Project Partners.

The Term of the Call-Off Contract will be for 6 months but it is envisaged that all work will be completed by around 3 months.

We would expect the organisation(s) appointed to carry out the work would submit the following outputs as part of this engagement:

• Desktop review of existing literature (including the documents listed above)

• Set out any precedents within or beyond the UK that could be drawn upon to assist the development of a viable commercial model for multi-sector water resource assets

• Carry out discussions with key stakeholders

• Use the outcomes of these discussions to host a number of workshops to develop, test, and iterate the model - we envisage these workshops would be split into different interest groups: different commercial users of the water assets created such as the energy sector or agriculture sector, those with an interest in water being retained in the environment, and those who may be interested in financing such multi-sector approaches

• Consider how the model would deal with different broad areas of benefits created, including where benefits conflict and risks borne: e.g. public water supply, other commercial interests, wider public or social value

• Consider how customers could benefit from additional value created by such approaches and protected for additional risks

• Consider the projected bill impact on current and future water company customers based upon a reasonable range of operational scenarios.

• Produce an Interim report - mid October 2021

• Produce a Draft Final Report for comment - November 2021

• Deliver a Final Report, in a publishable format - December 2021

The policy arguments in favour of a multi-sector approach are already well known, so the appointed organisation(s) would not need to rehearse these.