The economic impact & challenges facing water utilities

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What is non-revenue water?

What is non-revenue water? Know more about the challenges of non-revenue water, exploring its causes, impacts, and innovative strategies for reducing water losses and improving overall water management efficiency.

Our piping solutions partner, GF Corys’ Head of Business Unit Utilities and Head of Engineering Services and Solutions, Mark Jarrett, examines the economic impact and challenges facing water utilities more closely in this op-ed.
 
Here he outlines why the conversation surrounding non-revenue water needs to be more urgent, how we can mobilize the right people into action and what steps we can all take to make a difference and secure a sustainable future in the region for all.
 
 

The economic impact & challenges facing water utilities

By Mark Jarrett, Head of Business Unit Utilities, Head of Engineering Services & Solutions at GF Corys

When it comes to securing the future of resilient utilities, one topic keeps cropping up repeatedly: Non-revenue water (NRW). Even though this is a familiar term within our industry, in a broader context, and within the UAE especially, there is still a long way to go for its full impact to be accepted – and for the proper steps to be taken to preserve this precious resource.  

Before we delve more into this, let’s explain what NRW is. Essentially, it is the difference between the water entering a distribution system and the amount billed to water consumers. Where it becomes more challenging to comprehend is that it’s not only the physical loss of water from things like leakages or burst pipes. Its impact can be felt at all levels, from water abstraction to billing. 

Examining the landscape   

Lost water is lost revenue. Globally, it costs $39 billion annually for utilities. 1/3 of utilities report a loss of more than 40% due to leaks. Quick fixes only help solve the problem but don’t get to the root cause.   

It’s estimated that, on average, 33% of water is lost in distribution infrastructure. Aside from the ‘real’ losses, the more worrying water leakages are those that aren’t seen above the surface. Aging infrastructure, poor or incorrect installation, and environmental factors (such as earth shifts) collectively or individually can compound the issue.  

We’re at a crossroads now. As climate change continues its advance and with increasing water scarcity to contend with, highlighting the impact of NRW should be something we tackle at a societal level, mobilizing the right people to take action. 

Indeed, in this region, there is a willingness to act to try and stem these losses and safeguard the future with a more sustainable approach. We must address the challenges head-on that could hinder progress, from a lack of perceived urgency to understanding the issue’s magnitude and how best to move forward.  

The NRW challenges    

Despite the region’s swift embrace of digital technologies, one of the most significant oppositions we face is that we are not evolving quickly enough regarding the piping infrastructure and operational procedures currently in place 

 The door is already open for this conversation, but there is also a reluctance to try something unfamiliar or new. Technologies should be utilized to improve societies, but with this upgrade comes significant investment.  

 Our role is to help underscore the importance of moving from a traditional to a more modern system, showing security in buying these highly engineered products and that the expertise to support these solutions across the chain is also at hand.  

 Being ‘comfortable’ in the present means there is no real need to challenge what has come before, but this is not a conducive strategy for the long term. High levels of NRW seriously impact the financial security of water utilities, causing soaring revenue losses and unpredictable high operational costs.  

Companies must examine their systems and anticipate issues before they arise, funding the necessary service upgrades, maintenance work, and new technological investments. This is the only way to ensure long-term stability.  

How NRW can be tackled 

In tandem, we’re also dealing with a scarcity of finding the right talent and contending with knowledge gaps and inexperience. Some Mechanical Engineers still have a ‘metal first’ mindset, which means the way they think and design isn’t aligned with how the world has moved on.  

 Still, we have found in this region that Asset Managers are more willing to adjust their thinking and be open to change. This is not always the case in other markets, and perhaps a welcome effect of the UAE’s own broader 2036 Water Strategy to create a more sustainable approach to water access.  

 This readiness is encouraging, certainly. As asset management teams tend to understand the importance of product quality to ensure speed of installation and greater accuracy on recordings, such as pressure management, we can give them the tools and knowledge to make this a reality. But this now needs to be filtered down to the operational level.   

Continual education and training are required to show the multiple-use benefits of plastic solutions (e.g., leak-proof, corrosion-free) as a replacement for the heavier-duty, older metal options. We can support this transition from viewing metal as the stronger’ choice by showing the downside (e.g., inflexibility, corrosion) to a lighter, more durable material. In that case, we’re already halfway there to make this shift.  

 Additionally, broken supply chain processes can set things back, too. The steps taken to ensure adequate selection and installation of products aren’t as exacting as they could be.  

As such, these (often cheaper) solutions fail within a year or so. With no accountability in the chain, internal systems don’t hold up under scrutiny. Standards must be high, but our industry can be negatively affected with no official governance 

 These are the significant barriers to entry that need to be considered for us to advance as a region. You can see why progress is slow despite the necessity to move quickly.  

Looking to the future   

Consider the economic cost of a short-term fix, which often costs more in the long run. The erosion of public trust in the people deployed to manage these systems keeps breaking, causing endless delays, chaos, and disruption. And, of course, the brand reputation of any business dealing with NRW concerns, all too aware that social media is watching, broadcasting their failures live.   

 Think of it as your classic iceberg analogy. All we see is the surface impact of the damage caused by leaks and the direct cost (say, labor and materials) to fix something. The full extent of what’s going on isn’t always apparent; it’s the indirect costs associated, such as the shutdown implications, insurance claims, and further knock-on effects that no one accounts for until it’s too late.   

 From our side, working on greater governance and auditing processes will also ensure a better standardization implementation across the board. If you think about how the Oil and Gas industry is regulated and how stringent that is, we should aim to be on a par with that.  

 The most significant risk is being left behind as the rest of the world innovates. We’re essentially living on borrowed time. To put this into perspective, in the time it took me to write this article, data from the Watermain Break Clock recorded 18 additional pipe failures, costing $173k, with an additional $2.2m in corrosion costs in the USA alone.  

Solving water loss is everyone’s responsibility. A proactive approach is needed to secure a sustainable regional future for all.

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About The Author: Mark Jarrett is the Head of Business Unit Utilities and Head of Engineering Services and Solutions at GF Corys. With over 40 years of experience across global markets, Mark is a respected leading industry voice within the UAE. His expertise and knowledge are well sought after in helping to shape a more sustainable approach to flow management systems in the region, assisting companies to optimize their processes and outputs better. 

 

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