Severn Trent is today hosting a Capital Markets Day to showcase its ambitious plans for AMP8 and beyond following its acceptance of Ofwat’s PR24 Final Determination in January.

Severn Trent is confident it can deliver a third consecutive AMP of sector-leading operational performance, including reducing leakage by over 30% in the decade to 20302. Following the installation of 1,500 interventions on storm overflows in the last year, the utility says it is well on the way to delivering its ambition of halving spills by 2030.

As a result, Severn Trent is guiding to net operational outperformance in AMP8 of over £300 million in nominal prices. This includes up to £50 million in Price Control Deliverables (PCDs), with the rest derived from ODI rewards. The water company is anticipating outperformance rewards to be concentrated towards the later stages of the AMP, and is therefore guiding to at least £25 million in ODI rewards for FY26.

Severn Trent is utilising AI to produce better, greener, more efficient designs – its unique Plug and Play programme is helping to deliver capital works faster and cheaper together with its culture of working smarter.

“This gives us confidence we will deliver our programme within our totex allowance with the flexibility to absorb unexpected costs and reinvest in strategic initiatives that will further improve performance,” the company says.

Strategic initiatives include:

• Improving standards and capacity at over 400 pumping stations, as well as hiring a dedicated team of technical experts, to prevent pollution incidents.
• Investing an extra £50 million into infiltration programmes to keep groundwater out of sewers and reduce processing and treatment costs.
• Further investment in its Waste Operational Control Centre that is using advanced monitoring technology to detect and prevent waste incidents before they occur.
• Investing to insource a 450-strong mains renewal team to replace 1,400km of pipework, that will support in reducing leakage.

Looking beyond AMP8, Severn Trent said it sees this as the beginning of a multi-decade investment cycle. In addition to the real RCV growth of 45% in AMP8, its Long Term Delivery Strategy (LTDS) indicates an RCV growth rate of around 20% on average each AMP over the next 25 years, underpinned by investment to mitigate and adapt to climate change, population growth and tightening environmental standards.