UK ministers examine higher water prices for industrial users amid shortages
The Environment Agency is reviewing water valuation and abstraction licensing as drought and rising demand put pressure on England’s supplies.
UK ministers are examining whether some industrial users should pay more for water as drought and rising demand threaten supplies. No decision or timetable has been announced.
Helen Wakeham, the Environment Agency’s director of water, said current abstraction licences cover the cost of issuing permits but do not reflect the underlying value of the water. She said discussions were under way about changing how water is valued and priced.
Wakeham said existing arrangements could mean some large industrial users pay less per litre as their consumption rises, potentially encouraging poor water management. The Environment Agency is also reviewing how the abstraction licensing system operates.
The agency says almost three-quarters of England and all of Wales are in drought, with 27 million people facing water-use restrictions. It estimates England could face a daily supply shortfall of 5 billion litres by 2055 without action.
The review comes as the government pursues plans to make England an artificial intelligence superpower and triple datacentre capacity by 2030. Water UK says datacentres in England currently use 6.6 million litres of drinking water a day, a figure that could rise to 19.8 million litres if capacity triples.
Greenpeace UK and Water UK have criticised the current approach, while the Environment Agency says it is working with the government on pricing and valuation options to direct water to higher-priority uses.
