By Shivanshu Chauhan, Partner, PwC; Arun Sharma, Associate Director, PwC; and Shivani Saxena, Manager, PwC
With water scarcity posing a serious threat to global sustainability, reducing non-revenue water (NRW) has become even more crucial. As urban cities around the world face the possibility of ‘Day Zero’, a time when water resources will be entirely depleted, the need for advanced and implementable strategies to secure future water supplies has become paramount.
The 2023 report from the Intergovernmental Panel on Climate Change (IPCC) paints a concerning picture (Climate Change 2023 Synthesis Report). As per the report, half of the global population deals with severe water scarcity each year, as a result of both climatic and non-climatic factors. Moreover, the United Nations (UN) projects that by 2050, the demand for water will surge by 20 to 30 per cent, which shall further deepen economic challenges, particularly in nations such as India (UN World Water Development Report 2019). Depleting water resources, including glaciers and mountain snow caps, are leading to a rapid decline in groundwater reserves, leaving urban water utilities struggling to meet the rising demands triggered by an ever-increasing population, rapid industrialisation and climate change. This has resulted in a significant gap between the water produced and the water that does not generate revenue, that is, NRW.
Need to address high NRW
High levels of NRW compel utilities to extract more water from depleting resources while also risking the contamination of these resources. This simultaneously results in escalated energy consumption and greenhouse gas emissions. To offset these challenges, redefining NRW to include treated wastewater has emerged as a key strategy. Traditionally, NRW refers to water lost through leaks or water that is not billed to customers. However, by expanding this definition to include revenues from post-user treated water, utilities can explore new avenues for sustainability and economic growth. The UN Environment Programme’s (UNEP) 2015 study suggests viewing wastewater as a resource with the potential of providing water, energy and fertilisers, thus supporting circular economy principles that transform waste into valuable resources (From Irrigation, to Fertilization, to Generating Electricity, UN Report, October 2015).
Reducing NRW can enable utilities to circumvent costly infrastructure development, which will allow them to serve more consumers with existing resources while simultaneously enhancing financial sustainability. Effective water management and infrastructure improvements can enhance water availability and access, supporting the goal of providing safe water for all.
Key initiatives across the globe
Combined efforts by the government, utilities and communities are key to achieving these objectives. Success stories in the Philippines and Cambodia, which have adopted preventive and vigilant approaches to leak detection and repair, highlight the potential of maintaining NRW at aspirational levels and enhancing operational revenue. These examples showcase the importance of strategic planning and investment in infrastructure to control and minimise water loss, and improve service delivery.
Singapore has an innovative ‘NEWater’ initiative that demonstrates the benefits of comprehensive water management strategies including usage of recycled water (according to PUB, Singapore’s National Water Agency). Singapore’s approach towards addressing water scarcity is remarkable, as it also exemplifies how technology and forward-thinking policies may help in efficient water reuse practices. Other examples include Sweden’s Ryaverket wastewater treatment plant and the US Regional San initiative, which illustrate how treated municipal wastewater can support agriculture, reduce groundwater pumping and support habitat restoration.
Globally, approximately 380 trillion litres of wastewater is generated annually, presenting a significant opportunity for resource recovery in wastewater management (Down To Earth). This huge volume could irrigate millions of hectares of land, underscoring the need to reassess water revenue parameters. Urban utilities could then contribute to the significant global fertiliser demand and generate low-carbon emission electricity for millions of households by recovering bio-nutrients and recycled water from municipal wastewater. Efficient wastewater treatment also aligns with the UN’s Sustainable Development Goals (SDGs), particularly ensuring access to clean water and sanitation.
Other critical aspects
Driving change in water and wastewater services, and their operation and maintenance, involves several key components such as accurate metering, quality infrastructure, customer management, leakage control, legislation and water conservation. Accurate metering helps in improving transparency and the detection of variances in water consumption, while quality infrastructure and efficient management focus on interventions for leak detection. Efficient customer management enables quick responses to grievances, and leakage control addresses physical water losses. Legislation and contract management incentivise efficient practices, thereby empowering consumers to play an active role in water conservation.
Creating an enabling environment, fostering political will, implementing multi-year planning, safeguarding financial viability and advancing data management are some important contributors that support NRW reduction and utilisation of treated wastewater. Governance reforms, employee management, institutional reforms and combating corruption are essential for improved water management. Public–private partnerships and performance-based contracting can leverage private sector expertise and investment, while community integration and awareness creation are vital for building long-term relationships with customers.
Benefits and potential of technological advancements
Digital interventions play a pivotal role in modern water utility operations, enhancing efficiency and sustainability. Smart water networks, advanced metering infrastructure and data analytics offer real-time monitoring and optimisation of water distribution, thus reducing NRW. Technologies such as digital twin and leak detection tools improve infrastructure management, while customer engagement platforms and blockchain enhance transparency and accountability.
These digital solutions provide financial, operational and environmental benefits that reduce the stress on water resources and energy demand. By streamlining operations and improving decision-making, digitalisation supports the efforts towards water conservation and aligns utilities’ vision with SDGs; this ultimately enhances system efficiency and customer service. The integration of technology in water management addresses immediate challenges and lays the foundation for long-term sustainability.
Infrastructure upgrades and automation, paired with advanced treatment technologies, are essential to ensure customised water quality delivery. Training and capacity-building programmes across various levels are crucial for strengthening governance, accountability and technical skills in water utilities, particularly in developing countries.
The management of NRW using advanced tools such as digitalisation and channelising the reuse potential of wastewater may provide a range of financial, operational and environmental benefits. These benefits can result in improved system efficiency, sustainability and customer services. Moreover, they will help in reducing excessive stress on water resources, energy demand, and other fixed and variable cost and consumables requirements of water utility operations. NRW reduction may provide two direct sets of benefits which can be classified into demand and service categories. The demand benefits may include less water and power demand to cater to a set number of consumers, while the service benefits will enable the utilities to generate more revenue with similar existing operational expenditures.
Digitalisation provides instant operational efficiency, and enhanced monitoring and analytics of the water infrastructure, which enables utilities to make informed decisions. Furthermore, automation of routine tasks and better data analytics can streamline operations, reducing the need for manual interventions and minimising human error. Overall, improved monitoring and management can support water conservation efforts and help utilities in reducing the carbon footprint associated with water treatment and distribution.
The way forward
The global water crisis requires urgent attention and proper action. By aiming to reduce NRW and leveraging various available technologies, urban water utilities can significantly improve their service levels and financial sustainability. As urban cities continue to grow and climate change impacts intensify, efficient and sustainable water management will become increasingly important.
As the complex and interconnected challenges of water scarcity and climate change intensify, it is important that stakeholders at all levels come together to implement effective strategies for water management. By redefining NRW and embracing innovative technologies, we can transform the way water is managed and distributed. The path to a sustainable future lies in our ability to adapt, innovate and collaborate, making water security a reality for all.
