Establishing the sustainability of water efficiency measures

Mike Pocock, of Veolia Water, describes the latest developments in UKWIR's water-efficiency programme

UKWIR procures research on behalf of the water utilities in the UK and has developed a systematic programme of water-efficiency research. Its most recent project, Sustainability of Water Efficiency Measures (SWEM), is providing long-run marginal costs (LRMC) of the water saved for a whole range of water-efficiency measures.

UKWIR procures research on behalf of the water utilities in the UK and has developed a systematic programme of water-efficiency research. Its most recent project, Sustainability of Water Efficiency Measures (SWEM), is providing
long-run marginal costs (LRMC) of the water saved for a whole range of water-efficiency measures.
Carried out by contractor WRc, the project will also help in providing evidence as to how sustainable (pattern of benefits over time) the water savings will be, and the risks to the providers of the anticipated savings not being achieved.
In terms of cost-effectiveness and sustainability, the most promising water-efficiency measures so far appear to be dual-flush WC retrofits, low-flush WCs, rainwater harvesting, and washroom retrofits as a package, such as efficient showerheads, spray taps or urinal controls.
This project is particularly important in view of the next water-company business plans, due to be submitted to the regulator in 2009. The results should enable investment on water-efficiency measures to be directly compared with other demand-management measures such as metering and leakage control and with traditional sources of water supply.
Under the economic regulatory system in England and Wales, this will allow a level playing field when decisions are made in setting the next round of water charges and the subsequent decisions on the investment allowed. All this, however, is the realisation of work on water efficiency that began a decade or so ago. Therefore, to give the full background to this project, it is instructive to go back in history.

A time of watershed
The quality and success of water-efficiency research is, like many other aspects of water-industry business, greatly affected by how the industry is structured and the relationships between all the stakeholder bodies. With hindsight, the England and Wales model of full privatisation and tight regulation has benefited, and is continuing to benefit, from water-efficiency research.
The year 1992 was a watershed. Before that, the overriding approach to meeting future water supplies was "predict and provide". The same year saw the Rio Summit promoting the concept of sustainable development and also the climax of a three-year drought in the southeast of England.
So the Government was receptive to developing a more sustainable use of water and, to its credit, issued a catalyst document, Using Water Wisely, to encourage debate on the subject and assist in developing policy. The Environment Agency (EA) also saw an opportunity to develop a more sustainable approach to water resources.
The EA established its Demand Management Centre (now Water Demand Management) in 1993 to develop policy and promote the concept of saving water, especially through the still thriving Demand Management Bulletin. Several water companies were showing interest, such as Anglian Water, which established its landmark water-consumption monitor to give more precise estimates of
individual appliance use within households.
A severe nationwide drought in the summer of 1995 added momentum to the concept of demand management and water
efficiency. The Government publishing Water Supply and Resources - Agenda for Action in 1996 that introduced the now well accepted concept of the supply and demand balance. This gave the important backing, right from the top, for work on water efficiency. It also spelt out how it saw the responsibilities of all the stakeholders in water conservation and the actions they should take.
Another, less obvious, catalyst occurred following the election of the Labour Government in 1997. This was New Labour's vision of a stakeholder society. Certainly collaboration on common issues within the water sector has blossomed since then and, in the case of water efficiency, discussion has taken place in an open, constructive and practical manner. This air of collaboration was further assisted when the Watersave Network was established that brought in top academics to input into furthering water conservation. That the Government was taking demand side issues seriously was left in no doubt when the Deputy Prime Minister, John Prescott, held a Water Summit which led to the introduction of mandatory water-leakage targets for the water companies. Over the following years, water companies and the EA continued to develop policy, investigate possible water-efficiency measures, collect data and carry out water-efficiency initiatives.
This included a wide range of customer information and education projects. However, much of this work was unstructured and benefits indeterminate. Accordingly, the water companies and the regulators began to collaborate on research. The emphasis was on producing agreed definitions and frameworks so that regulatory debate could then concentrate on results and policy.
UKWIR had been established following privatisation to carry out collaborative research on behalf of its members, the UK water utilities. It was benefiting from this changing atmosphere and the water-efficiency projects included funding and participation from the regulators and Government.
In particular, there was The Economics of Demand Management, completed in 2002, that examined the marginal costs of demand-management measures so that they could be compared properly with more traditional sources of water supply. Shortly after followed The Economics of Balancing Supply and Demand for Water, which further explored supply and demand balance issues and how to determine a least-cost investment programme.
These projects helped to establish a continuity in UKWIR water-efficiency research. In the lead-up to 2004 water-company business plans, it was apparent that many of the water-efficiency initiatives carried out to date had not produced statistically robust results. This was often due to poor design, inadequate budgets or the temptation to try to achieve too much within a budget.
To address this, the water companies, in collaboration with the EA, carried out a new major project, Quantification of the Savings, Costs and Benefits of Water Efficiency. The contractor, Entec, examined 14 water-efficiency projects in detail and produced a best-practice blueprint on how to design, to budget for, to carry out and to analyse the data for a water-efficiency study.
As interest in demand management grew, the number and quality of the water-efficiency initiatives increased steadily and the next logical step was to procure the most recent project, Sustainability of Water Efficiency Measures (SWEM). This set out a framework (Fig 1) for evaluating the results of all kinds and scales of water-efficiency measures carried out over the country. Some of these are simple measures such a placing a cistern-displacement device in a WC.
Others are more complex comprising multiple water-efficiency measures such as water audits combined with fitting new taps and showerheads together with providing water-efficiency advice. Fig 2 shows the range of water-efficiency measures assessed in the project.
SWEM also produced a best-practice framework (Fig 3) that also illustrates how the current project builds on the earlier research. The framework quantifies the sustainability of water-efficiency measures that bring together the best practices, also identified by the project, and shows how demand-management measures fit within the Economics of Balancing Supply and Demand (EBSD) mechanism.
The long-run marginal costs were calculated in the case of 21 projects, where there was sufficient data, using the formula:

LRMC = NPV(IC)/NPV(WS)

Where IC = Implementation Costs (actual and projected); WS = Water Savings (actual and projected) and using a 5.5% discount rate for a ten-year horizon.

This approach means water-efficiency measures can be compared on an equitable basis with other demand management and resource options to maintain the supply and demand balance. One benefit of the project has been to identify where the industry needs to put in more effort. For example, there needs to be greater targeting of internal tap use and on promotion and publicity there needs to be greater focus on peak periods and the longer-term.
In the case of rainwater harvesting, there should be more examples of different-sized systems that also include the effect of variations in weather. For washroom measures, there should be an emphasis on obtaining the optimal mix of measures.
There is a risk that the benefits of water-efficiency research are lost if there is no funding to update the findings at appropriate intervals. This is especially true as new and better data becomes available that can provide more robust findings. To address this, the contractor, WRc, designed a web-based tool so that UKWIR members can update and extend the existing database of 44 projects with new data. The tool provides a structure that should help users improve project design and hence assist in producing better results.
As data builds over time, estimates of LRMC should reflect longer project life cycles and improved methodologies resulting in more robust data and transferability of outcomes. A comments section in the database is crucial in providing a source of advice on avoiding many of the pitfalls in designing and analysing complex initiatives.
Due to the fact that the water industry is the main client for the research, it has placed a great emphasis on providing realistic, practical and easy-to-understand outputs from the research. A continuity in the steering groups driving the projects has also aided a structured approach.
A parallel UKWIR project currently taking place is The Sociology of Water Use. Understanding customers' fundamental attitudes to water is important in improving the effectiveness of encouraging water efficiency and the project is calling on the expertise of academics at Lancaster University.
How do you find out customers' real attitudes in the first place? How should the water sector communicate the water-efficiency messages to the customer to maximise impact? Will customers deliver the expected savings in the longer term? These are some of the questions the project is addressing. The project includes a series of five "traces of water" stakeholder workshops on customer issues. The outputs of this product will aid how water-efficiency measures are targeted in a future that looks bright indeed.
A follow-on UKWIR project, Quadripartite Study into the Cost Effectiveness of Demand Management, is due to start next year in collaboration with the Department for Environment, Food and Rural Affairs (DEFRA), Ofwat and the EA.
The UKWIR structure and accompanying technology-transfer workshops mean that the lessons learnt from all these projects are fed into other demand management related projects. These include the recent Framework for Developing Water Reuse Criteria with Reference to Drinking Water Supplies together with a host of leakage control and metering projects.
This is expected to provide further evidence so that the full range of demand-management measures can be compared with water-resource options as part of a full twin-track supply and demand balance approach to water resources.

Promising developments
The institutional context is vitally important, and the developments
certainly are promising. November saw the launch of new strategic Water Saving Group with the Water Minister, Elliot Morley, in the chair and the heads of the EA, Ofwat and Water UK among the others on board.
At the same time, Waterwise, a body established by the water companies to promote water efficiency, was launched. Its brief was to make the economic case for water efficiency as a realistic, large-scale contributor to sustainable water resources, build links between water efficiency and affordability and promote the social and environmental benefits of water conservation.
The Water Act 2003 has given a number of bodies statutory duties relating to water conservation, and the regulations to apply this are now being introduced. The economic regulator, Owfat, will have a duty to consider sustainability for the first time, and this raises the issues of how to incorporate social and environmental costs in investment decisions. This may well tip the balance in favour of certain water-efficiency measures.
There are potentially severe pressures on water resources, particularly the southeast of England where 4.4M extra new homes are planned over the next 20 years, and the Government is looking seriously at a code for sustainable building, which should include water-efficiency measures.
Overall, this research should provide the proper costs and quantities of water saved (as well as the risks) of applying water efficiency. This is vital if such measures are to be used extensively to meet the future water needs. All the reports can be ordered through the UKWIR website at www.ukwir.org.

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