Market Arrangements Code Change Proposal – Ref CPM044
| Date | 09 November 2021 |
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Market Arrangements Code Change Proposal – Ref CPM044
Modification
proposal
Market Arrangements Code Change Proposal – CPM044 –
Management of the Ofwat Innovation Fund
Decision
The Authority has decided to approve this Change Proposal
Publication date
09 November 2021
Implementation
date
17 November 2021
Background
The 2019 price review allowed revenue to be collected by Wholesalers
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to contribute to a
£200m fund to drive innovative initiatives in the water and wastewater sector that go
beyond business as usual and deliver tangible benefit for customers, society and the
environment across England and Wales.
The Authority has run two Innovation Fund challenges to date (the 'Innovation in Water
Challenge' and the 'Water Breakthrough Challenge 1') with winners receiving a
proportion of the Innovation Fund. For the Innovation in Water Challenge, the Authority
calculated the settlement between contributing Wholesalers and winning projects, and
then each contributing Wholesaler transferred their proportion of the Innovation Fund
to the winning project lead.
The next challenge round has just opened, the Water Breakthrough Challenge 2, and it
is the Authority's intention to run further Innovation Fund challenges throughout this
price review period (2020-2025).
The issue
The current administration of the settlement means that each contributing Wholesaler
has to set up and make payments to multiple payees each time a challenge is run. Each
winning project lead has to collect the Innovation Funds from the 17 contributing
Wholesalers. This is inefficient and time-consuming and provides scope for
miscommunication due to the number of parties involved.
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Unless otherwise specified, the terms used in this document are those defined in the Market
Arrangements Code (MAC) as approved by this document
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