Downsizing water demand
- From: Vol 13, Issue 5 (May 2012)
- Category: Opinion
- Region: Middle East
- Country: Israel, Kuwait, Palestinian Territories and United Arab Emirates
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Water authorities are keen to make demand management sexy. Does this mean plant suppliers are facing a market slow-down?
Speaking to the Middle Eastern delegates at the Global Water Summit in Rome at the start of this month, things seemed to be more subdued than might have been the case in previous years.
Despite the return of the IWPP with projects in Kuwait and now Abu Dhabi, talk seemed to focus more on how competitive bidding had got, and how there were fewer good opportunities to be had in the region.
Given the attitude of some of the public sector speakers from the region who were attending, it’s perhaps not surprising that developers are not as bullish as in the past. Across the region, public bodies are talking about how they are keen to make efficiency gains through demand management, rather than simply building new water supply capacity. There aren’t many issues that link together Gaza and Dubai, but reducing usage is a key plank of the water strategy in both jurisdictions.
It is a result of the growing relevance of the water-energy nexus in an increasingly energy-conscious region. Even aside from the capital cost of new desalination plants or water treatment stations, it’s a lot more generous on operating budgets if the water doesn’t have to be supplied in the first place.
In Gaza, the Palestinian Water Authority is keen to build new desalination plants and is reliant on a major international project coming off to reverse the effects of over-abstraction on its fragile groundwater network. But its projections show a huge drawdown in fresh water usage over the next 25 years, a challenge that is unlikely to be met simply by building new water supply capacity – it seems more likely that without further efforts on water management, demand would simply expand to swallow up the new desalinated water that would be available.
In Dubai, we reported last month that the emirate had started to prioritise demand management over the construction of new capacity (see GWI April 2012 p24). While it’s early days to assess how things go in terms of water consumption, there seemed to be an immediate payoff on the power side when the introduction of a slab tariff for energy bills meant the proposed Hassyan IPP became surplus to requirements.
The power plant tender, which had already reached the bidding stage, was called off earlier this month. Not a good sign for developers and contractors, perhaps, but proof of the financial payoff that can come from careful demand management, when matched by appropriate price signals.
Elsewhere in the region, governments have been looking to curb usage by their citizens in one of the most water-hungry parts of the world. The problem is that their approach so far has been all carrot and no stick. Colourful advertising campaigns extolling the virtues of using less water at home may send out the right message on curbing excess water use, but without a solid financial incentive, there’s no need or desire to turn off the tap.
In Israel, state-owned bulk water supplier Mekorot is looking to push the country’s reuse levels even further, and has set a target of 90% for the reuse of treated wastewater effluent. While local expertise and business savvy in wastewater reuse is quite reasonably a source of national pride, an even more important factor in pushing sustainable reuse plans is the relatively high cost of fresh water, making it easier to push cheaper treated wastewater as a product to farmers.
This kind of change is going to be difficult to implement in many other parts of the Middle East because of the reluctance to consider raising water tariffs to a sustainable level. Despite the clear financial benefits of higher tariffs, building big plants at massive cost remains an easier sell to the population than charging a reasonable price for water.
The upshot is that things aren’t looking too grim for those making their living from plant building. Despite the best will in the world from water agencies, without a sea-change in the approach to pricing for consumers, demand management is likely to have a relatively minor impact on water usage in the Middle East.