Navigant Research Blog

Dire Water Supply Forecasts Demand Innovation

Neil Strother — November 30, 2012

A recent warning about the increasing demand for water could be the needed catalyst to bring about significant change in how we manage this precious resource.  The alarm comes from a global survey of senior water utility executives, 39% of whom say the risk of national water demand outstripping supply by 2030 is “highly” likely, with more than half (54%) saying the risk is “moderately” likely.  In other words, they’re very concerned, but not panicked (yet).

The survey is the basis of a report from Oracle Utilities titled “Water for All?”  It was conducted among 244 executives in Australia, Brazil, Canada, China, France, India, Russia, Spain, the United Kingdom, and the United States.  The main barrier to meeting future water demand is wasteful consumer behavior (45%), according to the executives.  A third of the respondents (33%) say tariffs are too low to stimulate more investment, and another third (34%) cite worries about climate change as a significant hurdle.

Nevertheless, the challenge of increasing water demand is also a powerful motivator of innovation, the study notes.  Water utilities in both developed and developing countries are embracing new technologies to improve efficiency.  For instance, desalination technology, network sensors, and smart meters are being deployed by utilities in an effort to avoid potential water-related calamities.  (Pike Research’s Smart Water Meters report has details of some of these technology solutions.)

Oracle is not the only technology firm that recognizes the need for innovative solutions in the water sector.  Japan’s NEC and its Swiss partner Gutermann have moved into this space as well.  The two companies signed an agreement recently to jointly promote Gutermann’s acoustic water leak detection system along with NEC’s cloud platform in an effort to help water utilities improve efficiency.

Willing to Pay

NEC is moving aggressively on the academic research front as well.  It has joined with Imperial College London to establish a lab for developing new technologies for managing smart water systems.   Researchers there will look at how technology can overcome the challenges posed by aging water supply infrastructures, making them more energy efficient, and helping to reduce their impact on the environment.

Consumers, too, are aware of the challenges facing water utilities, at least consumers in the United States.  A large majority (77%) say they are concerned about the state of the country’s water infrastructure, and 61% are willing to pay more to fix it.  This is according to the latest Xylem Value of Water Index.   Moreover, a growing number (88%) think the U.S. water infrastructure needs reform, which is up 8 percentage points from a 2010 survey.  And in spite of water rate increases, 61% of respondents say they would be willing to pay a little more each month to upgrade the nation’s water infrastructure.

So in the face of dire predictions about demand for water outstripping supply, there are reasons to be hopeful.  High-tech companies have started to focus more attention on developing technology solutions for improving water management.  Consumers have gotten the message that water system infrastructure needs attention and funding, and there is evidence that governments see the need to cooperate on finding solutions.  For example, officials in the United States and Mexico are close to a deal that calls for adding areas south of the border to Colorado River water-sharing agreements involving seven Western U.S. states.  The oldest water treatment plant in New Delhi, India’s capital city, will be renovated using funds loaned by Japan’s International Cooperation Agency.  In the Middle East, members of the Gulf Cooperation Council (GCC) have plans to build a common water network by 2020.

Alarm bells like the “Water for All?” report can help motivate people to find new technologies and a willingness to work to solve big challenges.  None may be bigger than keeping the water flowing.

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