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COVID-19 Impact on Demand Management in Regional Areas

The Regional, Rural and Remote Water Specialist Network recently hosted a Member Circle to discuss demand management for regional utilities. Given that no utility can predict what will happen in the future, managing future demand can prove difficult. With the effects of COVID-19 still an ongoing presence and causing sudden and dramatic population shifts both in regional and urban Australia, demand management has become even more critical but also much more unpredictable.

Compounding this, the 2021 Population Statement from the Australian Centre of Population was conducted before the lockdowns that affected numerous Australian cities and towns. Examples of major shifts include: 

  • There has been a sudden shift from Australian capital cities to regional areas, mostly from Sydney and Melbourne which is believed to be due to the lockdowns that were put into effect in mid to late 2021. 
  • Regional population growth has increased as a result of people moving to the regions (namely older generations) but also from people not leaving these areas (namely younger generations). 
  • Whilst natural population growth (regarding births and deaths) doesn’t appear to have significantly been impacted by COVID-19, the population grew at its lowest rate in 2020 (0.5%) due to the drop in immigration. It is expected population growth and movement will return to normal from 2023-to 2024 onwards. 

The effects of these population changes on the system were discussed during the Member Circle. For instance, it was noted that some utilities are already starting to feel the pinch on resources which is the case at North East Water in Victoria where there is a development boom in Wangaratta that has resulted in a 45% increase in water and sewer connections. This growth has resulted in the recently upgraded treatment plants reaching their capacity.  

Other water utilities have experienced changes in water demands with the increased number of people working from home. It was also noted that without the services, conveniences and jobs available within these areas, this growth may not be permanent which makes demand management more difficult. 

As such, the participants of the Member’s Circle discussed the following questions: 

  • How will Covid affect your utility’s projections?  
  • What assumptions are used for growth projections and how will your utility manage population growth/decline? 
  • How are efficient appliances and behaviour changes accommodated in the growth/decline of your utility? 

A summary of the discussions is presented below. 

How will COVID affect your utility’s projections?  

Habits have changed and demand is not as predictable. Considerations for regional utilities include:  

  • Whilst there has been an increase in population in some regional areas, it is uncertain as to whether these observed changes due to COVID will be sustained or whether there will be a backward flow of population from regional areas to the cities in the future. 
  • Changes in workday patterns have affected the residential and commercial water services demands. It is difficult to predict how many people will be at home versus in the office and how many people will be showering and doing the laundry at what would previously have been unusual times of the day.  
  • Local industries can or have been severely impacted by outbreaks, which leads to fluctuating industrial demand.  
  • Some regional areas have not had significant changes in terms of their total population, but there have been modifications in other ways that can impact demand. In Queensland, Mt Isa has experienced a movement of people permanently living in the community rather than FIFO workers which has led to a reduction in the number of people renting properties. 

COVID-19 has also highlighted the need for secure and robust technology to facilitate remote working to assist with operations being able to remotely control treatment plants and equipment. 

What assumptions are used for growth projections and how will your utility manage population growth/decline? 

Predicting what the future holds is difficult. In general, the utility’s operations and asset management teams seek direction from their planning group although these predictions, by local government bodies in particular, tend to be exaggerated and lean on the optimistic side.

  • There is a lot of change happening at the moment and it is uncertain whether it will continue or reverse to what it was 
  • It was noted that some areas aren’t experiencing population growth, but either stagnation or decline. Regional South Australia, for instance, hasn’t experienced the recent rapid population changes much of regional Australia is currently experiencing.  
  • Some Councils are experiencing isolated growth. For instance, one Council area made up of several towns is finding one town, in particular, is growing, but the remainder aren't experiencing any growth. 
  • In South-East Queensland, considerations associated with the 2032 Olympics are influencing how, where and by what amount there will be changes in the demand for water services due to the expected increase in job and lifestyle opportunities. 
  • The impact of climate change is another factor that is creating a degree of uncertainty regarding the sustainability of water resources.  

It was noted that reviewing historical population predictions and correlating them with data from sources such as the Australian Bureau of Statistics could provide some assistance to temper some of the wild predictions that are being formed. 

How are efficient appliances and behaviour changes accommodated in the growth/decline of your utility? 

In general, water utilities tend to use a mixed combination of smart metering, water efficiency education and communication programs and customer incentive programs as tools to assist with reducing potable water demand and these appear to have a mixed degree of success. 

Smart metering programs are in place for some utilities and the extent of their implementation ranges from pilot programs to networks that have these in place for 5+ years of operation. In some instances, smart metering is more focused on the network’s larger users with the intention of early identification of significant leak detection losses whereas other networks are responding to drought conditions. There were suggestions that the smart metering programs are more beneficial for the utilities' operations rather than changing the customer’s demands. 

There is a mix of community water education and efficiency programs for domestic users across most Australian States and the discussion did not indicate whether these were providing the benefits that they were intended to provide. Where there was a State Government organisation that managed the water systems, these programs provided a consistent message although this may not be the case for the independently operated systems. 

Incentives for the use of more efficient appliances have been in place for a number of years and communities and businesses alike have embraced these approaches to the point where this is considered ‘business-as-usual'. For some larger users, the adoption of incentives was slowly increasing and it is likely that if additional education was provided to these users, in the form of their non-core business activities associated with water services, this could continue to increase.