Water Provision for Ireland

- A Submission to the Oireachtas Joint Committee on the Environment, Transport, Culture and the Gaeltacht

October 2011

Presentation Team

Jerry GrantManaging Director

Chartered Engineer

RPS Consulting Engineers

Kevin MurrayChartered Engineer

Independent Consultant

John PowerDirector General

Chartered Engineer

Engineers Ireland

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Engineers Ireland is the representative body for the Irish Professional Engineer

• Founded 1835• 24,000 Members / 5,300 Chartered• Multi-Disciplinary

• Accreditation of Higher Engineering Qualifications

• Continuous Professional Training & Development Programme

• Water Services Engineers in Public & Private Sectors

Supply (Storage) of Drinking Water & Disposal of Wastewater

• Efficient Infrastructure– Reliable Quality & Capacity– Leakage Reduction– Asset Management

• Alternative Sources– Source Options– Security & Strategic Reserve– Source Protection

• Administration & Cost– Structures & Organisation– Water Charges & Metering– Value for Money

Basis of Submission

Inadequately maintained, unable to

meet peak demand, and requiring significant

investment

Water – A Key National Resource

• Drinking Water:– Essential “Food” Product– On Tap 24/7– Meet New Development Needs

• Water:– Industrial Processes– Raw Material– Fire Fighting Resource

• Waste Water Services:– Public Health– Environmental Protection– Storm Water Drainage

Current Situation

34 Local Authorities

950 Public Water Supplies

1,600 million litres / day

Over 40,000 km of pipes

Unaccounted-for Water 48%

Operational Cost €720m

Non-Domestic Revenue

Collection 52%

50% fall in Capital Spend

in 3 years

Cold Weather Vulnerability

440,000 Septic Tanks

75% of Homes on Public Water

Mains

1,000mm of rainfall each

year

Challenge: To organise and fund to meet 21st Century Needs

Regulatory Environment

Drinking Water

Regulations

Water Framework Directive

ECJ Septic Tank Ruling

Lead Solvency

Limits

Strategic Planning

Applications

EPA WWTP Licenses

Challenge: Compliance at affordable cost

EFFICIENT INFRASTRUCTURE

Efficient Infrastructure – Where are we now?

• Major Victorian Age Water/Wastewater Services remain critical to our towns and cities

• Investment for last 50 years had 2 main priorities

- Meeting capacity for new development - Meeting new EU standards of treatment

• Key Legacy Issues - High leakage and failure risk - Poor quality of much developer-led works - Limited security and flexibility for future - Ongoing environment challenges

Efficient Infrastructure – Strategy to Deliver

Asset Management Planning Approach: Regional Strategic Plans (5-6 years) and long term view Whole Life Cost (Integral Capital and Operating Budgets) Computer based records and performance models

Regional Management Approach (Economic Scale): Integrated teams and larger Schemes Common systems, management and procurement Maintain professional water services staff and skills

Adequate Budget Through User Based Charging: Revenues must cover operating and capital needs Water Metering introduced in a cost effective way Focus on encouraging demand management

Efficient Infrastructure and Treatment Plants:

Modern Treatment Plants• Recent water services investment has left us with a

portfolio of new treatment plants;• Plants must have strategic capacity for future; • Maintain capital replacement funds.

Well Operated Treatment Plants• DBO contracts on treatment plants run to a

Performance Management System;• Operator and Technology Risks with the Contractor;• New standards require advanced technology and

operation.

Efficient Infrastructure - Operation:

Economic Level of Leakage• Accelerate Investment in District Metering and Active

Leakage Control;• Address Customer-side Leakage as well as public mains

repairs and replacements;• Apply computer model-based asset management approach to

networks.

Energy Efficiency• Water services account for half the energy budget of most

local authorities;• Opportunities exist to use renewable energy sources and

drive energy efficiency;• Recover energy from wastewater treatment processes.

The Consumer & Demand Management

Water Efficiency

Grants

Education Programmes

Smart Metering

Customer Leakage Protocols

Consumption-Based Charges

Demand Management

ALTERNATIVE SOURCES & STORAGE

Alternative Sources/Storage – Needs for Water

• Water demands mirrors economic growth (1-2% / year)• Future Estimates – assumes leakage to below 20% and that

universal metering will apply• Rainwater/Greywater use requires bylaws and economic

incentives (low impact in medium term on existing properties)

• Must provide headroom for peak demand and risks to supply

• Ireland must use its sustainable resources to exploit worldwide water stress – key economic advantage

Alternative Sources/Storage – Key Issues

• Balanced Environmental considerations – (Ecology, Amenity, Community, Climate)

• Local Catchment needs to be prioritised– Finance catchment management through abstraction charges

• Raw Water Storage – useful to avoid dry summer extractions (balancing storage)

• Desalination – High Cost / Energy – leading to significant increases in cost of water (e.g. Australia)

• Ireland must manage its water sources to achieve economic advantage

Alternative Sources/Storage – Dublin & Mid East

Recommended Solution (subject to Planning)

• Lough Derg (Shannon) and large Midlands raw-water storage

• ESB balances flows at Ardnacrusha – no change in Lake levels

• Midlands Storage meets supply needs during low flow periods

• No Impact in Shannon Catchment

• Secure long-term supply will sustain vital economic growth (20/30 years and beyond)

Dublin Region – A Sustainable Future

• Lough• Ree

• Lough• Derg

• River• Shannon

• Parteen• Basin

• River Shannon

•

62 km twin 1400 Φ pipeline

•

Raw Water – 124km total

•

Pressure: 15-20bar

•

54km twin 1200 Φ pipeline

•

Drinking Water – 106km total

•

Pressure: 10-20bars

•

15km twin 1000 Φ pipeline

•

Integration – 30km total

•

Drinking Water

•

Pressure: 5-10 bars

• PeamountReservoir• Saggart

Reservoir

• Termination PointReservoir

• Garryhinch Bog(Bord na Mona)

•

Raw Water Abstraction

& Pumping Station

•

Water Treatment Plant

& Treated Water PS

• Storage(Raw Water )

Parteen Weir at Lough Derg Outlet

‘Old’ Shannon River

Ardnacrusha Headrace

Alternative Discharges

1.Receiving Waters dictate the discharge standards and hence costs

2.Coastal discharges offer greater capacity for large catchments

3.River / Estuarine discharges require limits on Ammonia, Phosphorus, Nitrates, Bacteria, hence higher costs

4.Treatment Plant Locations must satisfy aesthetic, odour, noise and other environmental impacts

5.Transmission networks can determine costs (Sewers, Tunnels, Pumping Systems, Urban Development)

Septic Tanks

• ECJ Ruling v. Ireland• 450,000 Septic Tanks• > 25% Polluting

• Risk to Groundwater• Neighbours wells

• Registration essential• Grant aid those that engage

• Chartered Engineers• Inspection & Authorisation

ADMINISTRATION & COST

Irish Water

“We believe that Irish Water should ultimately be a dedicated water utility company operating within a regulated

environment and with effective ownership of the assets.”

“The responsibilities of Irish Water should encompass both water and

wastewater services from abstraction of raw water through all stages of the process to the eventual discharge of

treated wastewater.”

Administration and Cost Objectives

Administration

1.Efficient Accountable Utility subject to Regulation2.Responsible for delivery of public policy objectives3.Commercially focussed with Whole Life Cost Approach4.Integrated Budget Models and Control of Revenue5.Water Charging to be fair, transparent and support water conservation

6.Allow for managed Transition and Timeframe to protect Services and retain Knowledge and Expertise in Local Authorities as necessary.

Administration and Cost – Key Roles

• Government

Public Policy and Social Protection

• Financial Regulator

Regulate Price, Investment & Service Levels

• Environmental Regulator

Protect Public Health and Environment

• Local Authority

Strategic Economic Development Planning

Catchment Management & Aquatic Environment Protection

Stormwater Collection & Flooding Control

Administration and Cost – Functions of Irish Water

• Central Administration Strategic Plans / Asset Management Strategies / Policies Revenue and Budget Control Investment Management Project Management and Procurement Regulatory Interfaces Risk, Safety, Environment, Legal, IT, HR Customer Services

• Regional Operations Management of Service Delivery Management of Delivery of Projects Legacy Programmes (Leakage and Assets) Service Connections metering & reading Workflow Progression

Administration and Cost – International Water Pricing

2010 Tariffs Overview (Global Cities)

(Ref. September Issue of Water Australia)

German Cities 3.60 – 5.90 €/m3

Australian Cities 2.65 – 3.70 €/m3

Paris 2.90 €/m3

Glasgow 4.33 €/m3

US Cities 2.0 – 2.10 €/m3

Key Cost Issues:• Investing in Water Security is driving up prices, especially for Desalination• Elements of Public subsidy many apply outside EU• “Free Water” referenced in Dublin, Belfast and Ashgabat (Turkmenistan)• Current Irish consolidated charge approximately €2.30/m3

Administration and Cost Model

Funding Model Required to be:

• Self Sustaining for both Capital and Operational Cost

• Raise finance backed by Regulated Asset Value

• Have transition funding for Capital needs

• Provide for legacy needs, especially leakage reduction

• Commence fixed charge and transition to metered basis in affordable

manner prioritising high leakage properties

• Social Welfare Code to provide funding for disadvantaged category

Conclusions

Ireland requires a 21st Century Water Service to further socio-economic growth

Key requirements are:

•A fit for purpose organisation to deliver, subject to policy and regulation

•Sustainable funding to meet whole life cost needs (including deficit)

•Must deliver secure high quality services with appropriate security and strategic capacity to promote growth and jobs