Box 3.11 Combined Water and Energy Activities in Water Supply

BOX 3.11

Combined Water and Energy Activities in Water Supply Management

Supply-side Demand-side effi ciency Comprehensive demand / effi ciency measures measures supply side approach

Consumers synergies Residential/Industrial

Watergy effi ciency Water supply systems Reducing demand by helping Looking at a water system is cost-effective offer multiple oppor- the consumer use water more comprehensively and delivery of water services, tunities to reduce water effi ciently decreases the ensuring thay effi ciency while minimizing water and energy waste directly, required water supply, saving projects are designed in and energy use. while serving customer both energy and water. tandem create greater needs more effectively. effi ciency opportunities. = + + + • Leak and loss reduction • Water-effi cient household • Right-sizing pump • Operations and appliances systems after reducing maintenance • Low-fl ow toilets consumer demand • Pumping systems • Low-fl ow showerheads • Avoiding wastewater • Primary and secondary • Industrial water reuse treatment by promoting wastewater treatment • Leak and water waste reduction and reducing demand

Source: Alliance to Save Energy (2002).

Box 3.12 illustrates a case study in Brazil. The study reveals that automating the water supply system and providing online control saved 22 gigawatt hours per year, equivalent to US$2.5 million. The control system cost only US$1.1 million.

Stakeholders

The stakeholder dynamic illustrated in fi gure 3.45 is important to the water sector. This dynamic includes interfaces between customers, service providers, municipalities, regulators, and policy makers. Transparency, accountability, and public participation are needed because the water industry is often highly monopolistic. These factors allow strategic decisions to be made using top-down and bottom-up approaches. For instance, tariff s ensure sector sustainability by furnishing revenues to fi nance sector management expenses. Tariff s are usually set at the municipality level, which represents the local government, though, in some models, tariff s are set by the central government. Tariff s are eventually endorsed by policy makers at the central level. Reviews of prices are carried out when tariff s expire. Thus, there is a constant need to analyze the real costs of service delivery thoroughly, including the rent value of any scarcity in water resources. The regulator is responsible for conducting price reviews. Calculations of the real costs are expected to cover the shadow price of water, the cost of carrying out treatment according to specifi ed standards, and the cost of distribution and delivery. The shadow price of water is governed by the demand of all users, and the policy aff ect-