Water Use Efficiency

Introduction

The Chartered Institution of Water and Environmental Management (CIWEM) is an independent professional body representing over 12,000 environmental professionals. CIWEM's agreed purpose is to develop and promote better and integrated management of the environment; to foster a deeper understanding of water and environmental issues and to enhance the quality of people's lives. This is achieved through CIWEM's Royal Charter, education, training and professional development; dissemination of information; conferences and events; research and publications; contact with Government agencies and other bodies, partnerships with other organisations and the publication of Policy Position Statements (PPS).

The Institution develops policy through its Technical Panels; one of these is the Water Resources Panel. Its members are drawn from organisations with a concern for water resources, including the Environment Agency, government, water companies, consultants and environmental organisations.

Purpose

To outline the main issues relating to water use efficiency, taking account of legislation, water industry operations and other matters of concern to legislators, regulators, the public and other stakeholders, particularly in a UK context.

1. CIWEM's Position on Water Use Efficiency

CIWEM considers that the efficient use of water is a central component of sustainable water resources management and takes the following policy positions:

i) continued growth in water use will have an increasing environmental impact which may be exacerbated by climate change;

ii) the low rates of growth forecast by water companies means that continuing sectoral growth in use may be balanced in the medium term by efficiency savings in other components of water supply if the savings can be delivered and sustained. Forecasting the balance in the longer term becomes increasingly uncertain;

iii) in the long term all water use should be measured where it is practical and economic to do so and innovative water tariffs should be introduced which take account of environmental and public health needs;

iv) the relatively low charges for water abstraction do not provide an adequate incentive for the efficient use of water which suggests that the arrangements for water abstraction charges require a fundamental review;

v) all licensed abstactors should have a duty to promote the efficient use of water in their own operations and those of their customers;

vi) the system for the economic regulation of water companies requires review to ensure stronger financial incentives are in place to encourage water efficiency;

vii) companies should carry out further research to determine robust, sustainable and transferable impacts of water efficiency measures;

viii) water suppliers and water users should continue to implement water efficiency measures, drawing upon the full range of measures summarised in Table 1 (below) and should continue to innovate and adapt to meet particular circumstances;

ix) water companies should collaborate with the organisations listed in Table 1 to develop and publicise a communications strategy to educate industry and households to use water wisely;

x) there is an obvious need for a clear and transparent long term strategy towards household metering which encompasses the principles of sustainable development and not just economic and financial drivers.

2. Background

2.1 Context

Sustainability, broadly defined as keeping the consumption of renewable natural resources within the limits of their replenishment, is a central concept to water resource management in the UK and overseas. The United Nations (UN) conference on the Environment and Development (the Earth Summit) held in Rio de Janeiro in 1992 resulted in the promotion of sustainable development through Agenda 21 in the following terms:

"The right to development must be fulfilled so as to equitably meet developmental and environmental needs of present and future generations"

The International Conference on Water and the Environment organised by the UN and World Meteorological Office held in Dublin in 1992 set out how these principles translate into policy for the water sector, with demand management forming a central component of sustainable water resource management. This is recognised by national and international organisations.

In the UK, this shift in approach is reflected in the policy statements emanating from the Environment Agency, the Office of Water Services (Ofwat), Government, environmental groups, water companies and other professional groups, with a consensus emerging concerning the role of water efficiency. The so called 'twin track' approach reflects a more overtly open and balanced approach to water management, whereby the costs and benefits of new water resource developments which may be needed to meet demand are considered alongside the opportunities for managing demand, and more efficient water use. The challenge now is to translate this rhetoric into a reality, to design and implement effective and efficient water use policies which meet economic, social and environmental needs.

In England and Wales, the Environment Agency, and before it the National Rivers Authority, has done much to promote awareness of water demand management. In this it has been supported by Government and Ofwat, and by the efforts of Water Companies.

2.2 Environmental Impact

There is clear evidence of the environmental impact caused by over-licensed abstraction reflected in low flow rivers, dehydrated wetlands and damage to the habitats of in-situ flora and fauna. These impacts may be exacerbated by droughts and the effects of climate change. The Government, regulators, and many major abstractors, including water companies, are now committed to restoring the most affected aquatic environments and aim where possible to minimise the environmental impact of water abstraction. A key requirement for minimising the present or potential environmental impact of abstraction is to ensure that water is used efficiently and not wasted, and wherever possible, returned to the environment in the right place and with the right quality, after it has been used.

2.3 Demand Forecasts

Water company demand forecasts for England and Wales anticipate low rates of growth to 2025. With effective demand management, it is now feasible to envisage 'no net growth' in public water supply over the next 25 years. However there will be local areas of growth, particularly in the south and east of England, where demand is likely to increase in spite of demand management measures. Household growth may be offset by reductions in non-household use, leakage and water efficiency measures if these can be delivered and sustained. Transfers in bulk supplies or licences can also help to remedy regional differences in the supply-demand balance which will help to avoid new abstractions from rivers and groundwater.

3 Key Issues

Four key issues are critical to the future implementation of water efficiency measures by water suppliers, water users, the Government and key stakeholder organisations. These are outlined below.

3.1 Charging For Water

If consumers do not pay for the amount of water they use, there is no financial incentive to use water efficiently. For this group it is important to seek alternative techniques to quantify and incentivise the efficent use of water. CIWEM recognises the significant challenge in this area.

Metering with appropriate tariff structures, such as seasonal, rising block or a combination of tariffs, is a major incentive to water efficiency in the long term. Whilst historical circumstances preclude a rapid change in this direction, considerable progress can be made over a 5 - 10 year period. The social and economic implications of such an approach need detailed study

Ofwat and the water companies have a key role in developing innovative tariffs which are acceptable to customers and encourage the efficient use of water, particularly for discretionary uses such as garden watering. CIWEM believes that in the longer term all household customers should be metered where practical, particularly in water stressed areas. However, legislation is now in force which prohibits universal metering, apart from in areas designated as 'water scarce', which does not assist in this objective. Accordingly CIWEM endorses innovative measures to increase the rate of metering.

Historically, the relatively low cost of public water supplies has provided little incentive for industrial or agricultural users to use water efficiently even where their charges have been based on metered consumption. More recent evidence however, suggests that large industrial water users are increasingly concerned about the cost of water and are seeking ways to economise, for example through implementing waste minimisation measures.

3.2 Financial Regime for Water Companies

Where water is charged for on a metered basis, the present regulatory arrangement for water companies results in increased income for companies from increased water sales and vice-versa. This is because the price cap on charges set by the economic regulator relates to the unit prices of water rather than for example, a cap on total revenue or income. This could provide a distorted incentive for water companies to increase the volume of water supplied, which is against the generally accepted principles of sustainable development.

The number of households on a meter is now 1 in 5, overall, but this varies considerably across the UK. The recent financial incentive for companies to promote metering has been impacted by the most recent price review by Ofwat and concerns over funding. This has made it unclear as to what the overall strategy towards household metering is in the future.

Possibilities for regulatory reform could include some hybrid form of revenue and tariff cap similar to that used for the electricity distribution companies, which broadly reflects the fixed and variable costs of supply. Further reforms could reward companies for the efficiency of water use by their customers as part of the price determination by the economic regulator. For example, energy utilities in the USA are rewarded for lower sales as a result of energy saving programmes.

3.3 Strategic Portfolio of Efficiency Measures

The design and implementation of water efficiency policy does not produce single or simple answers. It is likely that change can only be achieved by adopting an integrated approach, involving a multitude of stakeholders over a long period of time. Water suppliers, users, manufacturers of water using appliances, (such as washing machines, dishwashers, showers), regulators and Government must all play a role, and this is recognised in the strategic portfolio of water efficiency measures shown in Table 1. A national forum of stakeholders is needed to stimulate action on the full range of possible efficiency measures and to promote research to develop a sound understanding of their relative costs and benefits.

CIWEM understands that a National Water Conservation Group has been established, supported by Defra, and that it is a voluntary organisation supported in kind by stakeholders involved in all aspects of public water supply use. CIWEM supports this initiative and would wish to see its role more widely publicised and supported. In addition there are a number of other organisations and initaitives sponsored by public monies e.g. WaterSave network, Defra website and the Treasury's WATERMARK project. CIWEM would recommend that there needs to be an overview of all these initiatives to ensure that these are understaken efficiently and have appropriate engagement of all stakeholders. To this degree the Institution would like to see more of a direct steer by Defra.

Water utilities have a duty to promote water efficiency. As such CIWEM would like to see a more pro-active stance taken by water utilities. However it is recognised that such studies, initiatives and roll out projects can be costly both in terms of finance and manpower. To this degree CIWEM would like to see Ofwat and other funding bodies adequately allow funding in water utilities' plans.

3.4 Communications Strategy

Sustainable water management calls for changes in attitude and behaviour by all parties to the water cycle. A national communications strategy is needed which forges an integrated approach by Government, regulators, companies, professions, manufacturers and water users.

Strategic Portfolio Of Water Efficiency Measures

Table 1

Key to acronyms in table 1

June 2003

Note:- CIWEM Policy Position Statements (PPS) represents the Institution's views on issues at a particular point in time. It is accepted that situations change as research provides new evidence. It should be understood, therefore, that CIWEM PPS's are under constant review, that previously held views may alter and lead to revised PPS's