In an effort to become more energy self-sufficient, Severn Trent is investing £190m in renewable energy generation in the next five years, spending the money on solar and anaerobic digestion power plants.
The investment is expected to help the company produce 50% of its gross energy consumption from renewable sources by the end of the decade – up from 28% currently.
The strategy will reduce costs and be “a natural hedge to price rises.” A new operating model will be implemented which will include merging water and wastewater activities into one wholesale operation and engineering function. This will result in a loss of 500 jobs across management and support functions.
The company will also undergo corporate restructuring in order to meet an efficiency target which has been enforced by Britain’s water regulator. To help meet this target, the company also plans to cut costs to the tune of £200m over the next five years via the renegotiation of supplier contracts.
The benefit of this to the customer will be a reduction in the average annual water bill, from £333 to £329, “by which time they will be £60 below the industry average.”