Leakage

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). This PPS has been written by CIWEM's Water Resources Panel and is endorsed by the Institution's Pipelines Panel.

Purpose of this PPS

To outline the key issues associated with loss of water from the distribution network between the point of water treatment and delivery of water (potable and non potable) to the customer. This loss of water is known colloquially as "leakage". The political, regulatory, technical and practical aspects are discussed in their broadest sense in the overall context of management of the demand and supply of water within the UK. An opportunity is taken to clarify leakage definitions.

CIWEM's Position on Leakage:

1. CIWEM recognises the considerable reductions in leakage made by water companies in recent years.

2. CIWEM recommends that a Best Available Technique not Entailing Excessive Cost (BATNEEC) type approach be considered for leakage target setting within an economic framework.

3. CIWEM recommends that the ownership of supply pipes be transferred to the water companies.

4. CIWEM recommends that in the long term, all water use should be metered for the purposes of water conservation and more accurate leakage measurement.

5. CIWEM supports an holistic approach to leakage control, by considering the components of leakage and selection of appropriate policies.

Background

Context

Leakage is an important element in the supply-demand balance for most water supply companies. In the recent past droughts have exposed the vulnerability of some UK companies in maintaining supplies and has brought to the fore incidences of 'high' levels of leakage. It has been argued by their regulators (Environment Agency (EA), Office of Water Services (OFWAT)) that lower levels of leakage would have helped relieve the situation in some circumstances. At the UK Water Summit in 1997 the British Government expressed its concern at the high levels of leakage reported by some water companies although at the same time recognising 'low' levels achieved by others. Progressively leakage has become a political issue and OFWAT imposed annual mandatory targets for all water companies, set on a one year ahead rolling basis, with the target being to achieve economic levels of leakage (ELL)* by 2002/03. Most companies have now reached ELL and now set their own targets based on economic analyses which are assessed annually by OFWAT. OFWAT now assesses whether targets have been passed or failed against a 36 month rolling average.

*Economic level of leakage can be defined, for the purpose of this position paper, as that level of leakage at which any further reduction would incur costs in excess of the benefits derived from the savings.

The high profile of leakage in the UK media has led to a high level of public and customer awareness. This has been confirmed by recent market research studies. The profile of water utilities is, to a significant degree, judged by their behaviour on leakage on the basis that customers "don't have leakage in our plumbing so why should water companies?" However, the UK water utilities are for the most part significantly better than in many other countries. Some of the lowest leakage companies in the UK compare well internationally in this respect.

The UK water companies have been developing methodologies for deriving leakage quantities, and means of measurement to support the calculations, with national experts in the water industry. There have been significant reductions of leakage achieved by UK water companies in recent years. However what is not widely recognised is that, if left unattended, leakage would rise quite dramatically and the lower the level of leakage achieved, the more rapid the rise would be. Hence there is a need for an increasing level of resourcing to maintain progressively lower leakage levels.

The primary facets of leakage management are:

• losses from raw water mains to treatment works
• losses from trunk mains to service reservoirs*
• losses from water utilities distribution pipes * (including communication pipes)
• losses from customer supply pipes*
• improved management of water distribution system
• plumbing losses within the customers' premises

Leakage in the UK, as reported to OFWAT and used in setting targets, includes the items asterisked above and is known as total leakage. The first bullet point above is monitored by the EA in association with abstraction licensing and the need to secure the proper use of water. The last bullet point above is used in conjunction with water consumed to derive water supplied.

The primary benefits of leakage reduction are seen as:

• reduced abstraction and therefore environmental improvement
• increased reliability of water supplies
• deferment of capital expenditure on water resources and supply schemes
• reduced operating costs (if above the ELL)
• improved public perception of water companies

It is not technically viable, or indeed economically sound, to achieve zero leakage. Nevertheless, some utilities have still to reduce leakage significantly to approach the economic level whereas others have reached, or in some instances are already below, the economic level.

Key Issues

Accurate estimation of leakage requires accurate measurement of the volume of water delivered to customers in their properties. However, with only some 15% of household supplies metered, accurate measurement has not yet been achieved. Leakage estimates are therefore built upon components which themselves are subject to potentially large errors in estimation. However, although this is generally recognised, leakage is still reported as absolute values despite the uncertainties in its estimation and the consequences for target setting.

The estimation of leakage for any one supply zone cannot be separated from the total water supply balance i.e. the summation of water consumed (measured and unmeasured) and not consumed (leakage, exports etc.) compared with the total put into supply (distribution input). Hence the robustness of the water balance is a key factor in supporting leakage figures. In turn the very nature of establishing more precise measurements of water into supply at a zonal level through 'district metering' can improve estimates of legitimate use and in doing so improve the water balance.

There are a variety of organisations involved in the leakage debate with differing responsibilities and objectives. This has tended to cloud the real issues such as the practicalities of leakage reduction and the benefits that it provides in terms of security of supplies and environmental improvement.

Most leakage is from water company owned pipes. However, around a quarter of total leakage is from customer owned supply pipes which conveys water onwards from the curtilage of the property. At its Water Summit in May 1997 the British Government urged water companies to take responsibility for the leakage of customer supply pipes and to offer a free leakage repair service. Although this has been accepted by most companies this approach has clouded the matter of responsibility and brought into the debate future ownership of customer supply pipes.

There has been significant research and investigation into the practical methods of leakage reduction both from capital cost and operating perspectives. Analytical methodologies have been derived to assist in determining, for example, background levels of leakage and burst frequency to assist in focusing operational activity. It is argued by some that there should be more uniformity in the methods used.

There is insufficient clarity as to the methodologies of deriving ELL, for the short and longer term, for it to be universally agreed. The evaluation of the long term ELL is dependent on the cost and timing of other means of maintaining an adequate surplus of water supply over demand, such as demand management and water resource and supply enhancement. In undertaking a holistic approach to the costs and benefits there is a requirement to include social as well as environmental costs. There remains uncertainty as to the factors to include and how to cost them.

There has also been a substantial degree of research into methods of determining current and future ELL. This has been assisted by the introduction of network metering to monitor the flow into discrete zones known as district meter zones (DMZs). To determine the level of leakage it is necessary to determine, and then deduct, that which is being legitimately consumed. However the majority in most cases remains unmeasured and has to be estimated thus giving rise to uncertainty in leakage estimates. The main source of error is seen, by the regulators in particular, as the estimate of unmeasured per capita consumption (PCC). There is a suspicion that companies reporting high PCC may in fact have higher than reported leakage.

The role that other measures play in leakage management such as pressure management, leakage telephone help lines, customer education and customer supply pipe leakage, are being quantified, but longer term impacts are uncertain.

Discussion

CIWEM recognises the importance of leakage reduction in the management of water supplies and its contribution to the sustainable management of water resources. In this context it supports the efforts of all stakeholders in the water industry to manage leakage effectively and economically.

CIWEM is concerned, however, that because of the high political and media interest in leakage, the role that future leakage reduction can play in securing reliable water supplies may be over-played in some parts of the UK. In particular it has little impact on managing peak demand. In addition the environmental benefits may also be over played; water leaking from the network may support water levels in an evironmentally - though not economically - advantageous way. In this respect there is a requirement to communicate effectively the measurement of leakage e.g. Ml/d etc, loss per km of pipe, or per head served and how leakage targets are set and expressed.

CIWEM recognises the difficulties of quantifying the components of ELL, especially the environment and social externalities. CIWEM does not see an early resolution to this problem which will enable ELL to be calculated to the satisfaction of all stakeholders. The Institution does however believe that a long term view needs to be taken which has due regard to the long term protection of the water environment and the need to conserve and make best use of water. These have to be addressed in the face of the uncertainties of the impact of global warming, including its effects on the availability of water resources and demand, and the need to minimise waste from the use of chemicals and fossil fuels to treat and distribute water.

Discounting practices used by economists do not deal satisfactorily with long term issues associated with inter-generational issues. Leakage targets should therefore be set with regard to the financially optimum levels where these can be properly quantified, but also with regard to what is achievable with present and prospective technology and materials.

In addition to the repair of leaks as they become apparent, it is essential that a long term deterioration of the mains network is not allowed to develop through inadequate rates of mains relining and renewal. CIWEM notes from information published by OFWAT that the implied average age of water mains before relining and replacement is currently 60 years for the water utilities as a whole, based on the maintenance activity of companies in the period 1990-91 to 1997-98. The most active company has mains with an average asset life of 29 years and the least active 272 years. CIWEM does not consider this range to be acceptable and considers that best practice is likely to be closer to that achieved by the most active company. CIWEM is aware of the costs to customers of increased activity on mains renewal or relining (for example, a doubling of the infrastructure renewals expenditure would add under 5% to the average household bill), but believes that customers should pay the full costs of service provision rather than allow assets to deteriorate.

CIWEM recommends that the ownership of supply pipes be transferred to the water utilities. The companies would then be able to bid to OFWAT to resolve both leaking pipes and the lead contamination problem as part of the price setting process.

CIWEM takes the view that future leakage targets are likely to be tighter for some water utilities than those currently set in order to take a long term view of the environmental and social issues, and in recognition of the levels achievable by the best performing companies. However there needs to be a recognition of the practicalities of meeting these targets, the uncertainties in the analytical models and the practicalities of leakage measurement.

A more holistic approach to setting targets which takes into account the principles of sustainability, waste minimisation, consideration of the environment as a whole and best available technology with regard to the financial costs, would begin to parallel the approach used in European Directives for environmental protection.

The EC Directive on Integrated Pollution Control seeks processes based on the principle of 'Best Available Technology Not Entailing Excessive Costs -BATNEEC', and which takes account of the 'Best Practical Environmental Option -BPEO'. In due course, the EC Directive on Integration Pollution Prevention and Control will explicitly aim to ensure the efficient use of resources, including energy, for prescribed processes and will be based on Best Available Technology. However these processes imply some form of objective assessment which will require a common understanding by all stakeholders if these processes are adopted.

CIWEM also endorses the general principle of EC environmental legislation of 'no deterioration' which should be applied to leakage targets and that once leakage has been reduced it should not be allowed to subsequently rise. Perhaps the concept of maintaining leakage within a bandwidth may be an acceptable approach to avoid marginal failures in achieving target levels and to accommodate the uncertainties in measurement and climate variations year on year.

CIWEM considers that Government should give the economic regulator (OFWAT) guidance on the targets which should to be set for companies so as to ensure that wider social, environmental and practical issues are taken into account. However Government will need to be advised by experts in the industry in doing so. In addition it is necessary to revisit how leakage measurements and targets are expressed so that they are not misleading and can be easily understood, e.g. not as a percentage of supply, but as Ml/d.

CIWEM recognises that there are several mechanisms by which leakage can be reduced, such as by pressure reduction, district metering and associated programmes of active leakage control, and online monitoring, "find and fix" and leakage helplines. All such measures should be pursued to their economic level and best practice developed and shared amongst water undertakers.

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