Professor Vasilis Kanakoudis Water losses: an alternative water resource NRW: a lost revenue to be pursued Professor Vasilis Kanakoudis Civil Engineering Department University of Thessaly Greece

Water losses: an alternative water resource Every water distribution network has two main users: (a) all actual consumers; and (b) the water distribution network itself (water losses) What is “water use efficiency” and how can it be measured? Increase the unit water use volume rate efficiency => Increase the rate of used water / System Input Volume (SIV) => Water Losses volume reduction (e.g. water theft IS NOT water losses) Increase the unit water use revenues rate efficiency => Increase of the unit revenues(€) / System Input Volume (SIV) => Non-Revenue Water Reduction (e.g. water theft IS revenues losses)

Water losses management = Demand management = Water saving Water Losses management => water saving => indirect demand management => postponement of investments seeking new water resources => rational water use (+ energy + money) => Water Resources Management Water Losses are: Real (Physical) Losses (Leaks; Breaks; pipes, tanks & customer connections overflows) Commercial (Apparent) Losses (water theft; illegal use and all types of meter – metering – data handling errors)

Why turn to NRW reduction? NRW=Water + Revenues + Energy LOST (= all these are cost related) = 48.6 bio m3=14.5 bio US $ (based on 2005 year data) There is a potentially available water resource up to a supplying capacity of as much as 25.6% of the total fresh water volume entering the whole world’s water delivery systems (System Input Volume) If the NRW levels could be reduced to the accepted value of 5-10% SIV, then with the same water resources reserves we could be able to satisfy the fresh water needs of an additional 21% to 27,7% earth’s population! Energy – Carbon Footprint: Reducing water losses by 30%, consumed energy will be reduced by 20-30% 4

Methodological Steps – a sound approach Water Balance Assessment (Water Audit + Simulation) (Plan/Phase 1) Evaluate the Operational level of the Water Distribution network using the proper Performance Indicators (ex-ante evaluation) (Plan/Phase 2) Determine/Prioritize the NRW reduction measures – ex ante evaluation (Plan/Phase 3) Pilot implementation of the measures chosen (Do) Measures’ on-going evaluation (Check/Phase 1) Results evaluation (ex-post evaluation) (Check/ Phase 2) Results based fine-tuning of the NRW reduction measures (Check/Phase 3) Implement on a larger scale (Act)

Assessing the WB of a WDN IWA International Standard Water Balance McKenzie et al modification, 2007 Kanakoudis & Tsitsifli modification, 2010 System Input Volume (A3) Authorized Use (A14=A10+A13) Billed Authorized Use (A10=A8+A9) Billed Metered Use (A8) Water billed but NOT PAID for (apparent NRW) A23 Water billed and paid for (Free Basic) (A24=A8+A9-A23) Revenue Water Billed Unmetered Use (Α9) Water billed but NOT PAID for (apparent NRW) A23 Unbilled Authorized Use (A13=A11+A12) Unbilled Metered Use (A11) Non Revenue Water (NRW) (A21=A3-A20) Water not being sold (Non-Revenue Water/real NRW) (A21=A3-A24-A23) Accounted for Non Revenue Water (A26=A3-A24-A23-A25) Unbilled Unmetered Use (A12) Water Losses (A15=A3-A14) Apparent Losses (A18=A16+A17) Unauthorized Use (Α16) Customer Meter Inaccuracies and Data Handling Errors (A17) Real Losses (A19=A15-A18) Water Losses generating revenues (Minimum Charge Difference) A25 6

Minimum water consumption (m3) Minimum money charge (€) Fixed charge Minimum water consumption (m3) Minimum money charge (€) If there is no water consumption, the customer is obliged to pay a minimum amount of money (directly or through the minimum water consumption threshold set) The fixed charge is usually more than the opportunity cost the consumer has to pay Accounted-for-NRW Actual NRW

The Minimum Charge Difference: the predominant water pricing practice There are two types of fixed costs forming the fixed charge included in a water tariff : Type 1: expenses not related to the amount of water a customer uses (e.g. water meters maintenance, water connection fee etc.). These are the correct and socially fair fixed costs that each customer must pay, regardless of its actual water use level. They all form the so-called “opportunity cost”. Type 2: expenses (proportionally) related to the amount of water a customer uses (e.g. costs related to pipe breaks rehabilitation etc). These expenses should not be considered as “fixed charge”, although water utilities tend to consider them as such. There also other types of water use, e.g. fire fighting free of charge, other public water use free of charge, that should be considered as fixed charge (opportunity cost) Other kinds of cost, e.g. related to pipes/tanks flushing water (called “operational losses”) should be considered as of type 2 (as they have to do with the network’s percentage of use index – an non IWA one) The utility’s operating (running) costs should be recovered through the water rates (revenues of water consumption), excluding the first type of fixed costs (unless they are also included in the operating costs). 8

Pricing the cost of the Water Losses Reduction Strategies: Who is going to pay the RL bill? each one of these WLRS mean new investments! Who is going to pay the bill? the public is constantly questioning water utilities’ predominant practice : the adoption of any WLRS usually (not to say) always result in higher water prices major problems arise when public water utilities are involved where the elected Mayor is the decision maker (the case in Greece) and the political cost is the only variable in the “EXPERT” Decision Support System Is after all water a commercial or a social good? How should we treat it?

Pricing the cost of the Water Losses Reduction Strategies: Who is going to pay the bill? CARL (Current Annual Real Losses) represents the existing water losses EARL (Economic ARL) represents the CARL level that would be cost-effective to reach applying technically feasible real losses reduction measures UARL (Unavoidable ARL) equals the minimum CARL level that can be achieved, utilizing technically feasible real losses reduction measures UARL optimum equals the optimum value of UARL for a WDN operating under the optimum water Pressure value (UARL down limit) UARL(lt/day) = (18 x Lm + 0,80 x Nc + 25 x Lp) x Popt As the unit revenue of the water “sold” increases, EARL, UARL and their difference tend to decrease (the ALASKA oil case)

Water quantities per water use in the WDN Pricing the water supplied by the water resource: a Socially fair allocation of its cost Water quantities per water use in the WDN Customer Water Utility QCUST=a*QSIV QDN=(1-a)*QSIV QSIV (100%) QRW (60%) 100%*(60%) - QNRW (40%) QUNB (5%) 100%*(5%) QAL (15%) QWTH (2%) 100%*(2%) QMER (10%) 100%*(10%) QRER (3%) 100%*(3%) QRL (20%) QCARL-EARL (5%) QEARL-UARL (5%) a%*(5%) (1-a)%* (5%) QUARL-UARLopt (2%) QUARLopt (8%) 100%*(8%) QCUST=(83+5a)%*QSIV QDN=(17-5a) )%*QSIV 60%<a=87.37%<100% a=87.37% 11

NRW Components Real Losses Unbilled Authorized Consumption Apparent Losses

Confronting the NRW problem Apparent Losses reduction strategy Real Losses reduction strategy

Let’s talk about how to deal with NRW then... (to be continued)