Bloomberg News

Smart Water Measures May Save Utilities $12.5 Billion

December 03, 2012

Smart Water Systems Curb Leaks

A public water tap stands in the Dharavi slum area of Mumbai, India, on Friday, Nov. 9, 2012. Photographer: Brent Lewin/Bloomberg

More efficient use of water may save utilities $12.5 billion a year, funds that may be used for infrastructure improvements and to offset some of the scarcity issues that affect at least a third of the world’s population, according to a report.

Systems that provide real-time data from water networks, including pressure, maintenance needs, grid operations and water quality, may also lead to better decision-making about expenditures, according to the Water 20/20: Bringing Smart Water Networks Into Focus report commissioned by the utility infrastructure company Sensus.

“The importance of clean drinking water is rising by the minute,” Peter Mainz, chief executive officer of Sensus, said yesterday in an interview. A better system reaps benefits for future generations, he said. “It’s like a $12.5 billion annuity going forward and a business opportunity.”

Systems can monitor and find problems, leading to better management of leakage that alone costs $4.6 billion a year, said the report, which surveyed more than 180 utilities worldwide.

About 30 percent to 40 percent of water at the utility level is wasted, Mainz said. The report found one-third of the countries report leakage rates surpassing 40 percent. About 20 percent of homes also have some leakage and water losses ranging from a dripping faucet or running toilet to a major leak.

Leakage is driven by aging infrastructure as well as high water pressure in a system that’s expanded too much, Mainz said.

Century-Old Systems

“You’d be surprised at elements of the water system that are over 100 years old,” he said. “We have pipes that burst when they go beyond their expected lifetime.”

Smart water networks use sensors to show the losses and make more precise decisions on expenditures. That helps combat an environment where existing capacity is maintained instead of replacing the system with new infrastructure, Mainz said.

For a long time the cost of water, the world’s most critical resource and one we haven’t found an alternative for, was viewed as “minimal,” Mainz said. “We’ve seen that view diminish substantially.”

Reducing water waste also cuts other costs. Utilities spend about $184 billion to supply clean water, with energy the biggest input cost for utilities at almost $14 billion.

To help stem this waste, companies are expected to spend about $3.3 billion a year by 2016 from less than $1.5 billion last year, said Rick Nicholson, group vice president of IDC Energy Insights.

“It’s a pretty big untapped market” with some “pretty compelling drivers,” Nicholson said in an interview. He expects alternative financing such as performance contracts and public- private partnerships to help utilities raise capital.

Services are the largest opportunity area, Nicholson said, followed by hardware including sensors and wireless communication devices as well as analytical software.

To contact the reporter on this story: Ehren Goossens in New York at egoossens1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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