A fascinating read and raises, for me, far more issues of interest than I could have imagined.
New ideas are needed if the water sector is to meet the immense challenges of growing demand and higher energy costs, says the CEO of i2O Water.
Rapidly increasing populations and economic development in emerging markets mean an ever increasing demand for water, while ageing infrastructures, rising energy costs and climate change are having an impact on water utilities worldwide.
We urgently require new ideas and new ways of doing things. However, in many countries, incentives for innovation are weak and water utilities are slow to adopt new technology.
Supplying water is a monopoly, so water utilities are either state owned or operate in a regulatory framework. It is therefore governments, and the regulatory incentives that they put in place, that drive innovation – or the lack of it.
The fastest uptake of water-saving technology occurs in countries where some of the right incentives for innovation are already in place. For instance, i2O’s Advanced Pressure Management solution has been most rapidly implemented in countries where water is given an economic value. In Malaysia, the largest water provider, SYABAS, is now saving 40 million litres per day, thanks to our technology. It was very easy for SYABAS to calculate the payback of investing in i2O as they buy their water for approximately £0.15/m3, which reflects the real economic value of the water. If similar clarity existed for utilities in other countries, water company engineers could quickly evaluate new technology and projects to check whether or not they were viable.
If we are to solve the massive challenges faced by the water sector, we need regulation that encourages innovation. We need governments and regulators to give water a real economic value and ensure that the true cost of water is passed on to consumers and customers, with safeguards for the poorest – rather than subsidising it through the tax system and ignoring the environmental costs. This will incentivise solutions that reduce consumption, such as water recycling or the improvement of industrial processes.
An additional benefit of giving water an economic value is that its price correlates to its availability, varying significantly from one water resource zone to another. This ensures that incentives are greatest in areas where water is most scarce.
If governments have the courage to allow water utilities to pass on the true cost of water to their customers, their appetite for innovation will increase, working with dynamic suppliers and technology providers to develop solutions to the massive problems we face.
Adam Kingdon is CEO, i20 Water.
Photo: i20 Water