The water sector faces new challenges due to climate change and the green transition, necessitating updated regulations. With the establishment of a new Water Regulation Committee, the Danish government have taken necessary steps to future-proof its national water sector.

The committee will closely examine the sector’s economic regulation to ensure it accommodates environmental, climate, health, supply security, and consumer price considerations. The committee’s work will culminate in professional recommendations for the government.

“The water sector needs stable and sensible frameworks to meet future challenges. Drinking and wastewater companies invest billions of consumer dollars annually to ensure sufficient clean drinking water, climate adaptation for rainwater, security, supply to other sectors, and new technology. This is a complex task, and I am confident we will find the best solutions by involving experts and the industry in future-proofing the sector,” says Lars Aagaard, Minister of Climate, Energy, and Utilities

The government has appointed a chair and several members to the Water Regulation Committee, which will also be monitored by the Water Sector Contact Committee, comprising the most central stakeholders in the area.

“These are important and challenging questions the government has tasked the Water Regulation Committee to address. Water companies are responsible for critical societal supply tasks, which are rapidly evolving with new challenges related to climate adaptation and the green transition. The economic regulation of these companies must also evolve to support and help them for the benefit of consumers and society,” says Knud Pedersen, Chair of the Water Regulation Committee and Distribution and Regulation Director at Andel, and Chairman of the Board for Radius Elnet and Cerius.

In addition to the chair, the Water Regulation Committee includes experts and representatives from NIRAS, University of Copenhagen, Copenhagen Business School (CBS), and the IT service provider and software company Solteq.

Recommendations for efficiency and low, stable prices

The Water Regulation Committee will provide recommendations for the economic regulation of water companies, considering future investments and efficient task execution to ensure consumers pay the lowest possible, stable prices. Tasks include greater sector coupling, such as with the energy sector for surplus heat and biogas, resource recycling, removal of environmental pollutants, and climate adaptation against heavy rainfall and rising groundwater levels.

The work will commence after the summer of 2024 and is expected to conclude in two years with a report offering recommendations for the future economic regulation of the water sector. However, there is a need for quicker solutions, particularly for climate adaptation following severe floods and cloudbursts in the fall and winter. The committee will issue an interim report with recommendations for specific regulatory frameworks after one year.