The battle to cut water consumption: Five key points

A new report from Utility Week in association with Gentrack showcases the role charging for water will play in changing behaviour among consumers as a growing population and climate change limit resources.

The battle to cut water consumption: Five key points

A new report from Utility Week in association with Gentrack showcases the role charging for water will play in changing behaviour among consumers as a growing population and climate change limit resources.

While the last 18 months have been very wet by historical standards, population growth and climate change mean there are already significant shortages of water in parts of the South East and East Anglia.

By 2050, to support a growing population, we will need about five billion litres a day more water. Water companies are hoping that changing the way customers think about and consume water will help drive down per capita consumption overall.

That means that after a long period of homogeneity, there’s growing interest in creating greater diversity in tariffs across the water sector, which is what our recent Utility Week Intelligence report with our partner Gentrack explores.

Here’s five things we learnt from the research:

While the last 18 months have been very wet by historical standards, population growth and climate change mean there are already significant shortages of water in parts of the South East and East Anglia.

By 2050, to support a growing population, we will need about five billion litres a day more water. Water companies are hoping that changing the way customers think about and consume water will help drive down per capita consumption overall.

That means that after a long period of homogeneity, there’s growing interest in creating greater diversity in tariffs across the water sector, which is what our recent Utility Week Intelligence report with our partner Gentrack explores.

Here’s five things we learnt from the research:

Paying for water in the first place can seem irksome. “Because water is a basic necessity, there is a public sentiment that paying for it can feel burdensome, or challenging to justify,” explains Charlotte Glass, innovation leader at Gentrack. “A shift in perception is needed where consumers recognise that if they use too much water, they should pay a bit more. If people adopt water-conscious habits, their bills may stay the same – or even decrease.”

There aren’t many good examples of water industry tariff innovation. Mark Wilkinson, head of income & wholesale at Northumbrian Water, says successful use cases of new types of tariffs among water companies are rare. “I thought when I started digging into this there would be more. We talk about tariff innovation, but there aren’t actually many examples around!”

The jury is out on whether rising block tariffs are effective. Anglian Water told Utility Week that it felt rising block tariffs which provide free water to some households were incompatible with its messaging about water conservation. The utility has instead adopted seasonal tariffs, with different charges in the summer and winter. “We are open-minded about the benefits of rising block tariffs, but we can’t quite see them ourselves,” explains Pete Holland, director of customer and wholesale services at Anglian.

Smart meters are a crucial tool for reducing water consumption. Smart meters are improving leakage detection and enabling a better understanding of water usage at Yorkshire Water. The utility is targeting a 27.2% reduction in leakage. “We have projected at least 8.9% reduction per capita consumption post smart meter installation. For customers, they’ll get more accurate billing, more visibility, and more information about their own water usage and its impact.”

Sustainability-oriented tariffs could be introduced that reflect the energy consumption involved in pumping water. “Water usage could be combined with energy-efficient times for running pumping stations,” believes Matt Rouse, head of the Gentrack water business unit. “These types of greener tariff would combine information from both the energy and water industries.”

What’s the state of play with water tariff innovation?

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