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Insights and News /

19 March 2020

What water companies need to stop, start and continue doing to address global water shortages

David Bullin

David Bullin
Manager | Energy, utilities and resources | London

Across the globe, water is becoming an increasingly scarce commodity. The UN’s World Water Development Report 2019 states that: 

  • Over 2 billion people live in countries experiencing high water stress, 

  • Approximately 4 billion people experience severe water scarcity during at least one month of the year, 

  • By 2050 there will be an increase of 20-30% of the current level of water demand.  

The challenge for water companies globally is how to satisfy customer demand with a sustainable supply of water.    

STOP 

To make improvements with the supply-demand challenges, we believe that water companies should stop: 

  • Making decisions in isolation – Strategic asset investment-decisions are often made in isolation, rather than taking a holistic system approach. For example, making the decision to increase total production capacity and not taking into account network adequacy or the cost impact on the transmission network. Also, many companies do not work effectively with regional counterparts to solve mutual supply-demand challenges.  

  • Focusing on the short-term – Water companies demonstrate high levels of capability when reacting to emergencies or requirements to improve short term operational performance. For example, UK water companies reacted in a positive way by focussing all operational resources and quickly changing planning priorities in response to the “Beast from the East” in 2018. To address the water challenge, a shift towards a longer term, strategic mind set needs to be adopted.  An example of this is Singapore’s national water agency PUB’s approach to managing water scarcity. They have been driving a long term self-sufficient strategic ambition and subsequent asset planning to deliver a long-term sustainable supply of water.     

CONTINUE 

Water companies have a long track record of developing innovative technologies and techniques to ensure a resilient provision of supply meets increasing demand. As such, water companies should continue: 

  • Broadening the use of desalination – According to GWI DesalData, the global desalinated water market has grown at roughly 8% per year over the last 50 years with growth forecasted at between 5-7% per annum until 2030 with innovation in more efficient production methodologies cited as a key driver. A continuation of investment in desalination production assets and improving the technology efficiency is required.  

  • Deploying greater re-use of water capacity – The International Desalination Association outlines that between 2010 and 2017, the installed and contracted capacity of “reuse” almost doubled to 118million m3 per day, with volumes forecasted to further increase. Re-use of water will likely be a key factor in solving future global water scarcity problems and water companies should continue to deploy and develop re-used water technology solutions as they will be a key enabler to meet the global water challenge. 

  • Focussing on leakage reduction – Research by UN University shows that on average 30% of global water abstraction is lost through leakage. Water regulators around the world tend to respond by placing challenging leakage targets on water companies, and should continue doing so.  

  • Delivering effective macro system production planning – Water companies have started utilising short and long-term demand forecasts to optimise water production planning. Deploying these short- and long-term forecasting processes enables water companies to provide reliable and sustainable supply to meet demand. It also ensures that asset maintenance can be completed without increasing security of supply risk.     

We believe Per Capita Consumption (PCC), the metric used to measure the volume of water consumption per person per day, will need to become strategically important to contribute to the global water challenge.  PCC values currently range between around 150 ls/person/day in Germany1 to around 550l/person/day in the UAE2, so there are opportunities to reduce PCC values.   

PCC is typically used by governments and global bodies, but the next logical step is to firmly embed this measure in the culture and operations of local water companies, suppliers and even more importantly, customers.   

START 

No doubt, the water industry has responded to the challenges to date with a host of impactful programs. Addressing the magnitude of future supply-demand challenges, the water industry will have to start: 

  • Educating customers on the impact of PCC – Recently water companies in the UK have made major progress in educating customers about how their behaviour can negatively impact sewerage systems through incorrect disposal of household items and how fats, oils or grease can block sewers resulting in flooding or pollution. The same thought and initiatives need to be replicated, focussing on impacts of per capita consumption and methods to reduce overall usage.  

  • Structuring tariffs to incentivise lower PCC – Rewarding low water usage could reduce overall water consumption if correctly structured and communicated to customers effectively.     

  • Increasing meter coverage to be able to charge customers on their actual usage – To enable the deployment of incentivised tariffs and for water companies to build understanding and confidence of water usage, meter coverage would need to be increased where it is required. In many countries, having a water meter is not a mandatory requirement. This leads to low meter coverage and bills that are based on estimates rather than actual water used.     

  • Consider macro-system planning when making long-term infrastructure investments – It usually surprises people when they realise that strategic water networks do not have the same level of interconnection as electricity networks. In many cases, investment decisions are made considering a certain region or zone without consideration of neighbouring water companies or areas. There may be the possibility for a company or area with surplus supply to help an area meet expected demand.  Holistic, system-wide strategic planning will enable the successful delivery of the supply-demand challenge.   

CONCLUSION: 

Water companies have delivered major technological and operational-led improvements to address the global water challenge.  Water supply capacity has increased when required, through asset investment, wider use of desalination, re-use of water, focussing on leakage levels and planning more effectively. However, there need to be changes to customer behaviour with how water is consumed, and water companies need to be at the forefront and support this. A holistic system approach to long term asset planning also needs to be adopted if the future global water challenge is to be successfully addressed.