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Water Demand Management in the City of the Future

Water Demand Management in the City of the Future. Cost Assessment of Demand Management Options. DM measures include those aimed at Increasing system efficiency at utility level, e.g. Reduction in systems losses Increasing end-use efficiency , e.g.

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Water Demand Management in the City of the Future

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  1. Water Demand Management in the City of the Future Cost Assessment of Demand Management Options

  2. DM measures include those aimed at Increasing system efficiency at utility level, e.g. Reduction in systems losses Increasing end-use efficiency, e.g. Domestic water efficiency measures, Public education Promoting locally & unused available resources, e.g. Rainwater Harvesting, Greywater reuse Promoting substitution of resource use, e.g. Waterless toilets, Greywater reuse Using economic instruments to promote efficient use of water Flexible water tariffs (adapted from White & Fane, 2001) Demand Management

  3. Structural & behavioural opportunities for water conservation

  4. Potential for potable water substitution – Use of the water quality cascade

  5. Costs and Qualitative Assessment

  6. Sustainability criteria: Qualitative assessment • Risk and feasibility consideration • Environmental impacts • Social issues and concerns

  7. Financial and Economic Analysis of options • Cost per unit volume of water saved or supplied ($ / Ml) • Allows comparison of both demand management and supply options • What are the total resource costs borne by • the utility • the government • Customers • Society (externalities that can be quantified) • Use of various costing methods • Average Incremental Cost per unit volume of water • What is the AIC cost of water under each option?

  8. Assessing Supply and Demand Options

  9. Cost Assessment of Option 1

  10. Estimating the Unit Cost of Water • For a particular option to supply or save water. • Life Cycle Analysis • stream of future costs, by year they are incurred - capital (C) and operational (O = management, operation and maintenance) C(Y1), O(Y1), O(Y2), O(Y3), O(Y4), O(Y5), O(Y6) etc • stream of future volumes of water supplied or saved each year V(Y1), V(Y2), V(Y3), V(Y4), V(Y5), V(Y6) etc

  11. AIC calculation of unit cost of water • Average Incremental Cost or levelised cost • Comparable to marginal cost of water • Net Present Value approach • Streams of costs are discounted to present day • Streams of water supplied are discounted to present day • Then for a life cycle of 25 years

  12. More generally, and considering options that supply additional water or save water, taking account of capital (C) and operating (O) costs of the option and saved operating cost (OS) (Environment Agency, 2007)

  13. Economic Cost • Average Incremental Social Cost brings “externalities” into the calculation • Social and environmental costs and benefits (E) (Environment Agency, 2007)

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