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Urban Water Management in Australia The Big Picture Overview ACCC Conference 30 July 2010 Ross Young Executive Director Water Services Association of Australia.

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Presentation on theme: "Urban Water Management in Australia The Big Picture Overview ACCC Conference 30 July 2010 Ross Young Executive Director Water Services Association of Australia."— Presentation transcript:

1 Urban Water Management in Australia The Big Picture Overview ACCC Conference 30 July 2010 Ross Young Executive Director Water Services Association of Australia

2 Annual and decadal mean temperature anomalies for Australia (compared with 1961-90 average)

3 2009 mean temperatures compared against historical temperature records.

4 (Above) Annual and decadal mean rainfall (mm) for Australia since 1900

5 2009 rainfall compared against historical rainfall records.

6 Annual inflows to Canberra’s storages Gigalitres 187 GL Long term average inflow 1871 – 2009 68 GL average inflow 2000 - 2009 is 38% of long term average 45% 48% 32% 56% 12% 28% 35% 68% 25%

7 Annual Inflow to Brisbane's Storages – Wivenhoe, Somerset and North Pine Gigalitres 953 GL Long term average inflow 1889 – 2009 462 GL average inflow 1997 - 2009 is 49% of long term average 43% 40% 248% 37% 25% 39% 68% 9% 13% 6% 12% 15% 75%

8 Perth Catchment rainfall and runoff Rainfall Runoff

9 Desalination in Australia Location Capacity (ML/annum) Ability to increase capacity (ML/annum) % of annual total consumption 2007/08 Completion date SydneyKurnell90,000180,000 15% (potential 30%)Completed MelbourneWonthaggi150,000Up to 200,000 41% (potential 54%)2011 South East QLDTugun49,000 24%Completed PerthKwinana45,000 19%Completed Binninyup50,000100,000 21% (potential 42%)2011 Adelaide Port Stanvac100,000 71%Dec 2012 Total484,000674,000 This represents 46% of capital city water consumption in 2007/08 Source: WSAA Report Card 2006-07 and 2007-08

10 Since 1999-00 the volume of recycled water produced has increased by 130% in major urban water utilities (>50,000 connected properties)

11 Residential water consumption (kL/person/annum) Capital Cities & major regional centres2003-042004-052005-062006-072007-082008-09 % change from 2007-08 % change from 2003-04 Perth1111071051101041062%-4% Adelaide105101 1028483-2%-21% Sydney8378757468749%-11% Newcastle8177807871721%-11% Canberra8784938569714%-18% Goldcoast8098878065708%-12% Geelong9288927268690%-26% South East Water757476696158-5%-22% Yarra Valley Water787476696057-4%-26% City West Water7873 655856-3%-28% Brisbane Water102104736051534%-49%

12 Sydney’s Water Consumption in Relation to Population Growth

13 Projected population increases (Series A) for Australia’s major urban water areas up to 2056 CityObserved population 2007 Projected population 2026 Projected population 2056 % increase 2007 to 2056 Sydney 4,282,000 5,487,200 7,649,00079% Melbourne 3,743,000 5,272,300 7,970,700113% *South East Queensland 3,043,000 2,908,000 4,955,100167% Perth 1,518,700 1,410,800 1,848,50060% Darwin 117,400 2,455,200 4,164,400168% Canberra 334,100 266,800 367,20077% Hobart 207,400 189,300 334,900185% Adelaide 1,145,800 462,500 683,200101% Total Capital Cities 14,391,400 18,452,000 27,973,000109% Australia 21,015,000 28,723,000 42,510,400102% Source: ABS 3222.0 Population Projections, Australia, 2006 – 2101, Series A * 2008 observed figures - Planning Information & Forecasting (PIFU) Dept of Infrastructure and Planning SEQ

14 The changing face of the industry   Water now comes form multiple sources – natural and manufactured;   Water grids being created to minimise risks SEQ – NSW border to Noosa Heads Melbourne, Gippsland, Geelong - connected with the Goulburn Valley Bendigo and Ballarat – connect with the Goulburn Valley;   Water prices increasing   Customers taking responsibility for their own security of supply e.g. rain water tanks, domestic recycling   Move to more decentralised systems – small is beautiful   Integrated water management   Demand for a diversity of water products

15 Capital Cities' Water Prices as at 1 July 2010 CityFixed ChargeQuantityUsage Charge Adelaide$142.400 to 30kL$1.28 per kL 30-130 kL$2.48 per kL >130 kL$2.98 per kL Brisbane$162.920 to 255 kL$0.65 per kL 256 to 310 kL$0.69 per kL >310kL$1.23per kL Canberra$92.080 to 0.548 kL per day$2.00 per kL >0.548 kL per day$4.01 per kL Melbourne$75.29 to $154.13(0-440 litres/day)$1.51-$1.54 per kL (441-880 litres/day)$1.80-$1.84 per kL (881 + litres/day)$2.66-$2.97 per kl Perth$186.60 0 - 150 kL$0.726 per kL 151 - 350 kL$0.88 per kL 351 - 550 kL$1.02 per kL 551 - 950 kL$1.537 per kL over 950 kL$1.779 per kL Sydney$1.02 NA $1.87 per kL HobartBased on property value No usage charges Darwin$164.47NA$1.07 per kL Source: water utility websites

16 Issues of pricing   Elasticity of demand not known due to water restrictions   State Governments reluctant to introduce different securities of supply   Complaints about the high fixed costs on water bills   Inclining block tariffs vs flat tariffs   Postage pricing – by city and state – will it survive?   What opportunities will smart metering and intelligent networks bring?

17 Forms of competition   Bulk water provision   CAPEX delivery and OPEX functions   Retail contestability

18 Competition in the urban water industry   No operating urban markets known by WSAA anywhere in the world   Competition at the wholesale level is possible   Competition at the retail level unlikely Water bills still a small % of household outgoings Transaction costs high unless technological break through   Much work required to evaluate marginal social benefits vs marginal social costs – probably through the Productivity Commission Inquiry

19 IssueDifferences between the water, electricity and gas industries Reliability of productionReliability of electricity and gas is much higher than climate dependent water storages. StorageWater can be stored in dams for many years. Gas can also be stored but electricity storage is difficult. Transport costsElectricity and gas can be transported over great distances cheaply. Water is heavy. QualityElectricity quality can be specified. Gas from various sources can also be mixed. Different water sources have different qualities, disinfection treatments with public health implications. Scarcity pricingScarcity pricing for electricity and gas occurs over very short periods of time (minutes), scarcity pricing for water would be in months or quarters. EnvironmentElectricity and gas disappear once consumed. The water industry faces environmental impacts from extraction, treatment, sewerage treatment/disposal and stormwater. Network lossesLosses minor in gas and electricity but a significant issue in water transport.

20 Water trading   Rural and urban systems becoming increasingly interconnected   There should be NO policy on rural to urban water trades   Population growth and climate change will result in increased water trading in both rural and urban sectors

21 Conclusion   Industry has a proud record of reform e.g. 1994 COAG reforms and National Water Initiative   Focus on the integrated urban water cycle – not just drinking water   What about nationally consistent regulation of water?   The needs of customers must drive reform – not ideology   And just in case you have forgotten WATER IS DIFFERENT

22 Questions?


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