By Daniel Hunter

Wide-ranging water management efforts and large-scale investments must be made if utilities are to meet near-certain water stress–demand outstripping supply–by 2030, according to a new Economist Intelligence Unit study.

The report, sponsored by Oracle Utilities and titled Water for all?, considers the preparedness of utilities to supply water to the current global population of over 7bn people, with a further 1bn expected by 2030. The study compares strategies used by utilities in ten countries–the US, Canada, UK, Australia, France, Spain, Brazil, Russia, India and China–to meet this challenge.

The study is based on an online survey of 244 executives of water utilities in these countries, supplemented by in-depth interviews with 20 water utility executives and independent experts.

The research concludes that utilities worldwide expect to meet future demand despite increased pressure on supplies. Their optimism is based on an expectation that water productivity will improve and that utilities and governments will take a wide range of measures to ensure that water is used more efficiently. For example, the leading overall response to water stress in future is expected to be a sharp focus on demand management. This represents a shift in utilities’ traditional emphasis on continuing to supply increasing quantities of water in response to increasing demand.

The research also reveals differences in the approaches taken by utilities in the six developed and four developing countries under study. In the face of climate change, utilities in the developed markets are focusing more attention on creating infrastructure capable of responding to changes in weather and demand patterns. Utilities in the developing countries, in contrast, are more likely to focus on rolling out or expanding basic infrastructure.

Following are the key findings of the research:

- For most water utilities, increased water stress by 2030 is a foregone conclusion. About four in ten (39%) executives polled for this report think that, given current trends, national water demand will outstrip supply by 2030. A further 54% think such a risk is moderately likely. But the nature of such stress varies hugely, depending on local circumstances. Brazil, for example, has some one of the world’s largest per-capita supplies of fresh water, yet 42% of its water utilities worry about supply issues. This is because of ongoing urbanisation and economic growth, much of which is occurring in places where the country’s water supply is limited.

- For utilities, increased water productivity is the core of the response needed. To ensure sufficient supplies, utilities are making wide-ranging productivity improvements–everything from plugging leaks to recycling more water. Investments are rising as well. Across the ten countries polled, 93% of respondents say they are increasing their investment in water production facilities. More than one in five (22%) utilities surveyed will increase investment by 15% or more in the next three years.

- Wasteful consumer behaviour is seen as the biggest barrier ahead. Across much of the world, water flows out of taps at almost no cost to the user. Nearly half (45%) of utilities–especially in developed markets–see this as their biggest barrier to progress, while a further 33% believe that tariffs are too low to stimulate greater investment.. In developing countries, a lack of capital for investment tops the list of concerns (selected by 41%), while worries over climate change are close behind (38%). Regulatory difficulties, along with persistent difficulties in attracting the right skills, further deepen the challenge.

- A far greater focus on demand management is expected. The historical response to rising water demand has been to build up supply and distribution networks, but much more emphasis is now being put on cutting water use. From both a strategic and technological perspective, new metering and usage awareness programmes top the measures utilities believe will help reduce use. Such measures are effective: research suggests a 10-15% average drop in usage once a meter is installed. But the core of this is a psychological change, a push to make wasted water more of a social taboo.

- The water industry is experiencing a quiet boom in innovation. Worldwide, utilities are experimenting with new techniques, such as improved desalination and aquifer recharging methods. Israel, for example, has become expert in water reuse, recycling some 70% of its wastewater. Desalination innovations are appearing in far-flung locations, from California to Queensland. Network sensors and smart meters, which often link back to consumers’ smartphones, are helping utilities both to moderate demand and to find costly leaks more accurately. Nonetheless, more than one in three (36%) utilities surveyed say they are generally unaware of the innovation options available to them.

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