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“Using less, paying more”Making the case for long term investment in water efficiency
Cilla de LacyManager Liveable Communities
WSAAJune 2013
The Water Services Association of Australia is the industry body that supports the Australian
Urban Water Industry
Using water wisely – now and foreverMaintaining investment in water efficiency is as important as maintaining investment in your infrastructure – particularly in the face of uncertainty!
The decade that was• Millennium drought
(2001-2010)
• Record floods (2011- 2013)
GLOBAL FINANCIAL CRISIS 2008 – the worst since the Great Depression
Responses!• Big investment in
desalination, 0GL to 500GL from 2005 to 2012
• 130% increase in recycled water supplied from 2000 to 2009
• Big savings in water use – 350GL/yr!
The 350GL – where and how?City Annual water
savings (GL)
Sydney 120
Perth 100
Melbourne 60
Adelaide 55
Canberra 25
Impact on demand
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
De
c-0
2
Ju
n-0
3
De
c-0
3
Ju
n-0
4
De
c-0
4
Ju
n-0
5
De
c-0
5
Ju
n-0
6
De
c-0
6
Ju
n-0
7
De
c-0
7
Ju
n-0
8
De
c-0
8
Ju
n-0
9
De
c-0
9
Ju
n-1
0
De
c-1
0
Ju
n-1
1
% F
ull
Syste
m S
tora
ge (
GL
)
Melbourne's storage volume 2002-2011
Estimated Storage Volume without Water Conservation Recorded Storage Volume
The percentages shown are based on a storage capacity of 1810.5GL including Tarago Reservoir.
Impact on demand
The perfect storm
Quick increase in cost and prices
Eastern Australia has flooded
Water use is down due to floods and behaviour
change
Revenues are down but big fixed costs to
recover
Climate change is making many extreme events worse
Electricity prices are also high and economic growth is very low
The 2030 Vision
Stewardship of the urban water cycle
Influencing strategic land use planning
Compelling voice on National issues
Efficient, trusted and valued
‘Customer
driven,
enriching
life’
The strategy for water efficiency
Customer driven,
enriching life
Urban water
security
Regulation
Innovation
Water-energy
Strategic land use planning
‘Customer driven, enriching life’• A recent SAWM Newspoll found that 96% of
people surveyed saved water around the home
• About 70% of Melburnians and 55% of Sydneysiders support continuing investment in water efficiency despite recent price rises and capital investment
• Households now prefer low level restrictions (permanent water efficiency measures) to no restrictions - but are willing to pay more now to avoid severe restrictions
Urban water security
Managing future supply reliability with future demand
Water efficiency and the supply-demand balance
• Set a long term reduction target with the community
Target
• Develop, cost and assess a suite of water efficiency programs
Programs • Continuously invest in the right water efficiency measures
Investment
• Publically communicate demand-supply balance every year and act accordingly
Communicate
Save water, save energy!• Peak demand for energy in the residential sector driven by air
conditioning, water heating, pool pumps and filters
• Switching to water-saving showerheads in high water using households may reduce energy bills by up to 47 percent!
• Education programs designed to highlight link between energy and water use in a household and communities are important
Regulation - water restrictions
• Outdoor water restrictions helped save 575GL of water in Sydney between 2003-2009. In Melbourne per capita use fell from 195L/day to 143L/day
• Significant savings made inside the home but a loss of green spaces affected liveability
• Aggregate welfare cost of water restrictions to Australian households estimated to be $900m (PC 2008)
Temporary water restrictions are not a water efficiency measure as they result in a ‘loss of utility.’ WSAA supports the use of permanent water efficiency
measures with severe water restrictions reserved only for emergencies
Economic regulation
• Customers may expect water prices to fall when water use efficiency has increased.
• A decrease in water demand will reduce revenue but only have a marginal effect on short term variable costs such as pumping and treatment.
• As more than 60 per cent of revenue is typically associated with fixed capital costs, short term changes in water demand are unlikely to significantly affect the revenue requirement.
• This imbalance between revenue and costs may require a short term increase in prices, which should reduce over time as capital costs are avoided or deferred.
There may be merit in including water conservation costs in recoverable revenue only when conservation is the lowest cost solution for managing demand and supply; that is it must be
lower than the cost of augmenting water infrastructure or alternative sources of supply (ESC, 2012)
Pricing• Increasing water usage prices by 10% decreases
demand over a year by 1.1%
• Upgrading of appliances = halving of long term price elasticity
• Predicted increases in housing units, smaller block sizes and use of efficient appliances will reduce the ability of water usage prices to impact residential demand
Building and appliance regulation
New homes
BASIX (Building Sustainability Index) - Energy and water bill savings for an average four bed home in Western Sydney are between $158 and $228/yr(NSW Government, Planning 2012)
Appliances
The Water Efficiency Labelling and Standards Scheme has generated water savings at a cost of $0.08kL to $0.21kL. (ISF, 2008)
What’s missing?Minimum standards for commercial buildings
What should they target?The prevention and elimination of leaks as 94% of water consumed in an office block is through leakage and from heat rejection equipment particularly cooling towers
Strategic land use planningA strategic approach to urban water and land use planning keeps open the maximum number of options for servicing a community
Engaging with communities
upfront
Influencing public policy
debate concerning liveability
Valuing social and ecosystem
services
Innovation! Know your customers!
Always
Good sewage service and safe clean drinking water
- good taste and look
Fix and maintain infrastructure
Sometimes
Provide water usage info and comparisons
Sell water related products and recycled
water
Mostly
Set customer water use targets and provide water management
advice
Proactive leak detection and protection of
waterways
Don’t expect
Customer data to go to a third party
Utilities to diversify into new markets for profit
Customer segments16%
Efficient
usage
18% Price control
18% Uninvolved
22% Future focus
26% Basic supply and maintenance
Yarra Valley Water ‘Tap App’ Perth
H2omeSmart program
Summing up…….
It’s all about services NOT products
We are in the ‘forever’ business
Maintaining investment in water efficiency is as important as maintaining investment in your
infrastructure – particularly in the face of uncertainty!
It just takes a mindset change and a bit of imagination
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