European water investment 'getting smarter'
Efficiency will be a top priority for water utilities in the coming years and will create a favourable environment for innovations, finance and new business models, according to new analysis.
Analysis from the consultancy firm Frost & Sullivan shows that despite wider economic challenges, major water utilities are investing in water efficiency by focusing on innovation.
The Big 5 water utility markets (France, Germany, Italy, Spain, and the UK) in 2012 account for almost $50bn (77.8%) of capital and operational expenditure spending in Europe, and Frost & Sullivan claims this makes them crucial testing grounds for new technologies and innovative practices.
Frost & Sullivan research analyst Seth Cutler said: "Understanding this region is important as the variation of economic, demographic, political and social realities help produce trends that can be translated to many other regions.
"Water utility investment has not collapsed in these countries, but is instead getting smarter and looking at opportunities that provide greater confidence in returns."
Frost & Sullivan's analysis identifies a number of areas seen as market priorities for innovation and efficiency.
These include maximising chemical consumption through more efficient use and rebalancing water networks and services to reflect a more natural demand and supply environment.
The consultancy says recent decreases in urban population and a growth in complex residential patterns has harmed a water industry that was created for centralised urban growth.
In addition, Frost & Sullivan says smart water technologies that address leakage levels, will play an important part in the future. Pipe replacement plans, sensors and data communicating devices in pipes offer solutions in this area.
According to the consultancy, the cost of water will rise in the coming years regardless and therefore the cost recovery principle needs to be effectively implemented by water utilities and the benefits need to be communicated to consumers.
The findings echo a recent study commissioned by edie and the Temple Group which demonstrated that water efficiency has become a higher priority for those in the corporate sector.
'Why are business leaders prioritising sustainability?' showed that almost half (49%) of the survey respondents will be carrying out more detailed water footprint analysis by 2014.