Severn Trent to Invest 190 Million Pounds in U.K. Clean Energy

(Bloomberg) — Severn Trent Plc, the U.K.’s second-largest
publicly traded water company, plans to spend as much as 190
million pounds ($279 million) on clean energy in the next five
years to shield it from power-price volatility.

The utility will invest largely in solar energy and
anaerobic digestion, a process that breaks down organic waste
such as sewage into a biogas for generating electricity, it said
Wednesday in a statement. That will take the company’s clean-energy generation to 50 percent of total consumption by 2020
from 28 percent, it said.

The planned clean-power expansion will provide Severn Trent
with a “long-term hedge” against fluctuating market prices,
the Coventry-based company said. It already is producing energy
from sewage, having started injecting biomethane from its
Minworth treatment plant into the gas grid in Birmingham in
October. It also operates a facility that turns food waste into
electricity.

The company said a reduction in its water tariff in the
next five years will cut the average household bill to about 60
pounds below the industry norm.

Britain’s water regulator in December told utilities what
prices they can charge for the five years starting next month.
It said average rates will drop by 5 percent, reducing bills by
about 20 pounds to 376 pounds a year before inflation.

The decision is designed to keep customers’ costs as low as
possible while supporting 44 billion pounds of investments in
infrastructure and repairs to curb leaks and sewer flooding.
Severn Trent said it expects to save as much as 200 million
pounds over the five-year period through “efficiencies.”

United Utilities Group Plc is the U.K.’s largest publicly
traded water company.

To contact the reporter on this story:
Louise Downing in London at
ldowning4@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Ana Monteiro, Amanda Jordan

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