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Addressing non-revenue water losses

Non-revenue water losses have plagued utilities for years, yet efforts to stem the flow are hampered when funding comes into play. But with the price of water rising and the cost of technology falling, things might be at a turning point.

Non-revenue water is a dogged issue for many Australian utilities. Causes of water loss include real or physical losses (ie leaks in a system’s network), and apparent losses, such as metering inaccuracies and unauthorised consumption. Between the two, quantifying the water-loss balance is a necessary exercise for every utility. But implementing a strategy to minimise the loss is tricky, as there are often more pressing investments.

The Bureau of Meteorology reports non-revenue water loss in Australia in the past five years at 878,027ML, averaging out at around 10% of utilities’ system input. And although the figure is dizzying, chasing those losses can quickly become economically unviable.

However, the scales are starting to tip as the cost of not addressing the issue creeps higher. At what point should utilities make the call?

Striking a balance

Pure Technologies’ Regional Director Hugh Chapman said that compared to other parts of the world, non-revenue water (NRW) in Australia is a small problem.

“The International Water Association puts the worldwide cost of leakage at US$10 billion per year. But by international standards, Australia performs at the better end of the scale,” Chapman said.

“For example, it’s not uncommon for utilities in south-east Asia to lose half of their water due to leakage."

Despite Australian utilities’ performance, NRW still requires consistent monitoring. Changes in NRW are an indication of network health and data management efficacy – issues that can have a significant impact on a utility’s bottom line.

“Water systems will leak for a number of reasons: increased pressure through the system, poor workmanship, ageing infrastructure or soil movement,” Chapman said.

“Utilities will never eliminate all leakage within their network, but they want to get to the point where the cost of additional leakage reduction efforts equals the value of the recoverable loss.”

As such, chasing NRW is driven by return on investment. The Economic Level of Leakage (ELL) implies that if water-loss reduction activities cost more than the water is worth, reducing NRW will fall in priority.

Broader concerns

While the ELL makes sound economic sense, GHD Principal Engineer Richard Savage said there’s a new attitude emerging industry-wide with an eye on optimising operations, tighter investment strategies and better longer-term planning.

“Australian utilities’ past efforts in curtailing non-revenue water have largely been driven by drought,” Savage said.

But he said change is on the horizon.

“Firstly, it’s an unwanted operational cost. In terms of resource value or the marginal cost of that water, it is an issue that demands attention.

“Secondly, all areas of the public sector are starting to assess their role in terms of the triple bottom line: resource equity, economic equity and social equity.”

To date, economic equity has taken priority from a business perspective, but Savage said resource and social considerations are likely to require more attention in the future as pressure on water resources intensifies. The environmental and social impacts of NRW – including sustainability concerns and public health risks such as infrastructure damage and contamination – are raising red flags industry wide.

“For utilities that say their levels of non-revenue water are too low to justify long-term investment, my answer is this: that might be the case now, but in 10 years’ time it’ll be a different story. Utilities must start monitoring and control programs now,” Savage said.

As environmental and population strains continue to increase, more will be expected of utilities in the future. “You can’t stand hand on heart and say non-revenue water is only important when the dam is trending towards empty,” he added.

“We have an obligation to the communities we serve to use our resources sustainably at all times.”

Future crunch

Advances in technology are beginning to tip the balance. WaterGroup Managing Director Guenter Hauber-Davidson says the 10% loss of system input is accepted as the norm, but should be challenged.

“New technologies are available, they are cheaper than ever before and, at the same time, the price of water is rising,” Hauber-Davidson said.

“When you put these three factors together it becomes clear that the ELL can no longer be 10% – it should be more like 5%, or a lot less. We need a significant mind shift.”

Advances in water-loss management tools, including digital leak-detection technology, advanced network monitoring software and smart metering, now offer opportunities for tackling NRW.

“There is a big move at the moment towards the digital water utility, which is trying to unlock all the value hidden in data,” Hauber-Davidson said.

“But we are not quite there yet. If you struggle to get good reliable data out of critical points in your network, there is no point investing in a sophisticated big data system.

“But if you are able to collect reliable information, there are some truly amazing things that can be achieved.”

Regarding the curtailment of real losses, Hauber-Davidson said ultrasonic flow metering with advanced leak detection technology is leading the way in offering cost-effective results.

“The power of electronics has grown astronomically. Increasingly now, in critical areas, utilities even have a very viable business case to employ a permanent leak detection network,” he said.

“Then there is smart metering for customers. This is very sexy at the moment.”

However, Hauber-Davidson warns against utilities implementing smart metering until they’ve got the basics right.

“There’s no point trying to run before you can walk.”

MWH Global Water Planning Principal Hayden Knight agreed, saying that starting with mass input volumes at crucial network points – namely, large-diameter pipes at the beginning of the network – is key to ensuring a healthier water balance reading.

“Measuring the inflow into the network is the priority; you can’t determine anything until you know the mass you’re dealing with,” Knight said.

“There is considerable error in mass balances due to the use of average customer demands, meter inaccuracies and meter reading lag. Use of automatic meter reading [AMR] technology in the future will substantially reduce that number.”

Although the technology available is vast and varied, Knight is convinced that the future of digital utilities lies in AMR as an industry standard.

“In the next decade, it’s likely most networks will have AMR and network pressure sensors coupled to analytical software. We will effectively be doing a water balance in a zone every single day. That’s where the future is heading,” Knight said.


NRW reduction in Australia falters not because of something that’s there, but rather what’s missing: without reliable network data, it’s hard to justify investment in technology.

“If you mass-balance a network and you only know what your customer demands are four times a year, you are using an average and you’re making assumptions about usage and losses,” Knight said.

Deciding on the appropriate instrumentation for a network requires understanding of input volumes and district flow rates.

Hauber-Davidson said: “Utilising new technology comes back to reliable data. Data is the foundation of these projects. If your data is wobbly, you cannot build a stable strategy.”

Further, return on this investment isn’t adding up just yet, with pre-emptive leak detection, real-time system reporting and tailored customer billing still a pipe dream for many utilities.

“The bigger-picture issue here is that to solve a problem you need to invest money into it,” Savage said.

“It’s a big challenge that utilities face. This isn’t a one-off or a program-type investment – this investment would need to be sustained indefinitely.”

Although everyone agrees on the investment conundrum, Knight said that if utilities stall, then it’s only a matter of time before the market decides for them.

“You’ve got to have bold leadership within an organisation to make the move,” Knight said.

“But the availability and cost of water, balanced in conjuncture with the lowering cost of technology, will eventually tip the balance.”

First published in Current magazine May 2017.