Every Drop Counts

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Every Drop Counts Achieving Greater Water
Efficiency Report Preview Louise Every 7
September 2006
Every Drop Counts Incentives for Greater Water
Efficiency
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Outline

• Project purpose
• Benefits and opportunities
• Policy challenges
• Key findings
• Current action on water efficiency
• Key recommendations
• Progressing metering
• Water efficiency targets

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Project purpose

• Builds on ipprs Commission on Sustainable
  Development in the South East
• Develop policy recommendations for improving
  water
• efficiency in homes
• Two main areas
• Options for increasing water metering
• Feasibility of introducing water efficiency
  targets

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Benefits and opportunities

• Improving domestic water efficiency could
• Contribute to a secure, sustainable water future
• Contribute to tackling water affordability
• Small, but not insignificant reduction in energy
  use and related carbon emissions
• Potential for water efficiency
• Estimates for potential water use reduction in
  average existing home range between 12 30

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Challenges

• Water resource issues variable across UK
• Peoples relationship with water is complex
• Public mistrust of company motives in promoting
  water conservation
• Minority of households metered
• Low take up of water efficiency technologies

• Water regulatory system currently rewards supply
  expansion
• Evidence base on cost-effectiveness of demand
  management not as robust as supply-side measures
• Economic case often difficult, and poorly made by
  companies

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Key findings current activity

• Water collective responsibility to use wisely
• Water companies, public bodies and Government
  have duties relating to water conservation (Water
  Act 2003)
• Government
• Water Saving Group
• Improving homes - water fittings /or building
  regulations, CSH
• Encouraging behaviour change possible product
  labelling
• Public bodies water strategies, water
  efficiency promotion, no EST equivalent to help
  co-ordinate advice and funding
• Water companies all companies do some activity,
  but overall decline in activity since 1997, with
  some exceptions

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Declining performance on water efficiency
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Average annual expenditure on water efficiency
and supply pipe leakage activities per person
(2002-05)

• Water efficiency
• England and Wales 10.5p
• Greater South East 11.5p

• Supply pipe leakage
• England and Wales 40.4p
• Greater South East 40.8p

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Average annual water savings from water
efficiency and supply pipe leakage activities per
person (2002-05)

• Water efficiency
• England and Wales 327 ml/day
• Greater South East 250 ml/day

• Supply pipe leakage
• England and Wales 670 ml/day
• Greater South East 806 ml/day

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Water company activity

• Key findings
• Clear guidance needed from Ofwat on what is or is
  not reported as water efficiency activity
• Duty not ensuring that companies in water
  stressed areas are delivering more water savings
  at the household level
• If Duty is to be a driver for more water
  efficient homes, Government may need to rethink
  its interpretation by Ofwat and water companies

• Caveats
• Data on water savings not robust
• Data does not include metering or mains leakage
  activity
• Direct water savings not always primary aim
• Water efficiency may not be most cost-effective
  means of meeting supply-demand balance

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Progressing metering
28 of customers in England and Wales are metered
Metering fairer way of paying for water use
based on water consumption. Metering can enable
water savings of 10-15 per household. Households
have a legally protected right to choose whether
they are charged for water according to a
meter. But Secretary of State can accept
applications for Water Scarcity Status which
enables compulsory metering
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Metering recommendations

• Accelerate compulsory metering in water stressed
  areas
• Take forward proposals of Water Saving Group
  (WSG) to
• Streamline water scarcity status application
  process
• Integrate metering proposals into Water Resource
  Management Plans
• Identify water stressed areas
• Urgent need to evaluate and communicate benefits
  of smart meters and multi-utility smart metering

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Safeguards for supporting poorer households and
vulnerable groups

• Government to develop a water affordability
  benchmark could build on former sustainability
  indicator (no more than 3 of household income
  to be spent on water bills)
• Development of innovative social tariffs (with
  more widespread metering)
• In interim, two options
• Expand Vulnerable Groups Scheme
• Government funded water affordability grant
  scheme similar to Warm Front. Grants to
  qualifying, metered households to improve water
  efficiency of their homes

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Water efficiency targets

• Leakage targets work, no targets for other areas
  of water use
• Current interest in water savings targets from
  WSG others
• per capita consumption
• water-into-supply
• Both assessed on basis of reduction in demand
• Lessons water sector can learn from energy sector
  
• Potential for water equivalent to Energy
  Efficiency Commitment (EEC)

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Energy Efficiency Commitment

• Key policy on existing homes
• Obligation on suppliers to deliver energy
  benefits in domestic households
• Do not have to reduce consumption (but may in
  future)
• Carbon savings, market transformation, targets
  met
• not perfect
• not directly transferable to water
• but aspects can be applied to a water
  sector equivalent

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Targets - key differences and recommendations

• PCC or Water-into-Supply target target on
  companies to deliver net water savings (i.e. lead
  to a reduction in demand)
• - Recommend Government set voluntary pcc
  benchmark as a measure of good practice
  sustainable water consumption
• Water Efficiency Commitment target on companies
  to deliver gross water savings (i.e. companies
  deliver water savings but are not held
  responsible if demand does not decrease)
• Recommend Government set national minimum water
  efficiency targets with enhanced targets for
  water stressed areas
• Applied to water company areas
• Initially voluntary, but aim towards statutory
  status by 2014-15

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How would a WEC work? - 1

• Government sets pcc benchmark and national
  minimum and enhanced w.e. targets
• Obligation on companies to meet proportion of
  savings in priority group (low income and
  vulnerable hholds)
• Ofwat administer and EA monitor impact on
  consumption
• Aligned with and funded through periodic review
  process
• Only measures with acceptable level of confidence
  in water savings would qualify, but incentives
  for innovation
• Water savings to be due to company effort
  companies encouraged/expected to work with third
  parties

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How would a WEC work? - 2

• Freedom to meet target however companies choose
• ESTs role expanded to include water
• Guidance on Water Act 2003 (due 2006) to include
• Requirement to meet targets (when statutory)
• Encouragement on educational and informational
  activities
• Encouragement on R D
• Public bodies given guidance on roles and
  responsibilities in relation to WEC

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Key messages to consumers

• Need to respond to challenges facing water
  resources
• Managing consumer demand will be important
  element
• People, businesses and Government must all do
  their bit
• For consumers
• Metering will provide information on water use
  and a price incentive to influence water-using
  behaviour
• A Water Efficiency Commitment will ensure
  companies provide incentives to customers to
  improve domestic water efficiency i.e. pay for
  water used not wasted
• Help for those on low incomes or are vulnerable
  through targeting of WEC measures, Government
  funded grants and development of social tariffs