The Water & Wastewater Industry is a peculiar sector. Its members often meet to share best practices, to discuss adoption of new technologies, and always share their best success stories with their neighboring and international peers. One would wonder if Chevron would share its secrets to Total, but the fact is that Water & Wastewater Utilities do not compete among each other for their customers. One opens the tap and can only have one water supplier. With the exception of the private Water & Wastewater Operators, such as Veolia, Suez, etc, the water companies do not live in a competitive environment.
This fact, in addition to the subsidized nature of the municipal water market, makes it difficult for the water companies to look for efficiency in their daily water operations. Because in the majority of countries water tariffs are flat and lower than the true cost of water (if we consider all the costs incurred to abstract water, purify it, distribute it, collect it, treat it and dispose it back to the environment), efficiency is mostly looked from the angle of how to reduce operational expenditure (OPEX). A reduced OPEX would yield savings that can be used in renewing aging infrastructure, improve service, invest in new technologies, etc. But when it comes to analyze OPEX in Water & Wastewater companies, one finds with great surprise that many companies do not know their true expenditure and the potential savings they can accomplish.
I have done this exercise myself: Electricity is almost always the biggest bill in the Water & Wastewater companies OPEX, on average 30% of their total operating expenditure. Ask a Water & Wastewater Company C-Level executive how many kilowatt-hours they spend to transport or process water, and in many cases they do not know. During 2013 I have been meeting top managers of Water & Wastewater companies in UK, Australia, Spain, South Africa, Israel, Gulf countries, Saudi Arabia, USA and Brazil, and 9 out of 10 cases they did not know the amount of electricity to produce or distribute a m3 of water. Surely someone in their organization is paying the bill, but this should be the first and foremost KPI one should look at to reduce their OPEX, and yet it is not so commonly monitored.
Doing some research at what the American Water Works Association (AWWA) has established as key performance indicators for water & wastewater utilities, one finds just one related to Energy: Energy use per volume delivered/processed: KWH/MG during a reporting period. And digging a bit more in what an AWWA research recommends as the most urgent 20 KPI to be implemented for Water & Wastewater companies, one finds none related to Energy consumption. How can this be when Electricity is your biggest operating cost?
The AWWA is one of the few organizations to publish the aggregated data of energy consumption per volume of water for the US. Difficult to find this data for other countries. AWWA reports 56 TWH consumed by US Water Utilities to move and process water, equaling $4B/year. What if you could save up to 30% of this energy by better managing your water & wastewater infrastructure and by optimizing its operation? What would you do with that +$1B/year savings?
To answer this question, you need to know your baseline consumption, and you need to monitor it very carefully. You cannot manage, nor improve, what you do not measure. Plenty of water companies out there do not know their current energy consumption. They know how much they pay for the electricity bill, but this is not enough to know how much your treatment plants and your pumping stations are consuming. And this is the starting point for an efficient and sustainable water & wastewater company on the 21st Century. Nowadays energy footprint, greenhouse gas emissions are part of each company’s annual report, and in some countries it is already mandatory to report it on an annual basis.
Welcome to the energy dilemma. Help us help you solve it for the Water & Wastewater sector.
…see how 2 wastewater companies have started solving this energy dilemma