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Water infrastructure: Smart meters to manage an essential commodity
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Top Stories |
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SME Times News Bureau | 11 Jul, 2018
The "Composite Water Management Index" report released by the NITI Aayog
recently highlights the issues confronting water management in India. A
multi-pronged approach to tackle these problems is warranted. In a
world where technology and infrastructure create synergies, smart water
meters are one component of the strategy that can help us mitigate the
water crisis.
Smart water meters have the potential to assist in
efficient water usage because they primarily help utilities to bill
their customers the correct amount, identify and resolve system issues
that lead to water wastage and assist in creating a water ecosystem that
is conducive for efficient usage.
To understand this better, one
needs to look at the two components of water produced by utilities: (i)
the part that generates revenue and (ii) the "non-revenue" part, or
water generated by utilities that is not revenue earning. The
criticality of reducing the element of non-revenue water in achieving a
more sustainable water management system in India cannot be
overemphasised.
To better appreciate the way smart meters assist
in creating a more robust water management system, one needs to
understand both "apparent" and "real" losses that lead to non-revenue
water.
As defined by the American Water Works Association,
"Apparent losses are the non-physical losses that occur in utility
operations due to customer meter inaccuracies, systematic data handling
errors and unauthorised consumption (and...) real losses are the
physical loss of water from the distribution system, including leakage
and storage overflows."
In common parlance, "apparent losses"
lead to utilities suffering revenue loss because of information
asymmetry whereas "real loss" is wastage of water for which the
production cost is incurred but it fails to reach the end-user. Smart
meters, if implemented well, have the potential to resolve a large part
of these two issues.
Beyond smart meter rollouts, water utilities
in India will also have to start focussing on water "asset management"
in a holistic manner. Better data, data analysis and capacity-building
will be required to train and equip utility staff to use the surfeit of
data that will gradually be available to make more informed decisions.
Capacity-building amongst utility workers will be a critical component
of delivering results through smart water meter infrastructure.
Apart
from the operational aspects, the financing mechanism employed to
deploy the high upfront cost smart water meters will be crucial. At its
very core, water infrastructure assets have three sources of financing
available in taxes, water tariffs and subsidies.
Given the
contribution of water towards society and the increased urbanisation in
India (according to the UN 2018 Revision of World Urbanisation
Prospects, 34 per cent of India's population lives in urban areas, a
number expected to be well above 50 per cent by 2050), government
expenditure will the critical component to finance smart meter
infrastructure.
In this regard, one will have to price in the
improvement in profit margins for water utility businesses from the new
infrastructure, margins that can hopefully be utilised to create more
infrastructure.
Smart meter infrastructure also provides an
opportunity to multilateral banks and development agencies to assist in
creating and expediting much-needed water infrastructure through grants
and low-cost loans. The decision by the European Investment Bank (EIB)
last year to fund the E-Distribuzione's electric smart meter rollout in
Italy through a Euro 1 billion loan is an example of the long-term
lending support required.
While granular operational expertise at
the ground level will be required to execute the project successfully,
it will be equally crucial that smart meters at an aggregate level are
viewed as an infrastructure asset to create financing mechanisms best
suited to reduce barriers to usage.
As the smart meter roll-out
gathers steam, it must be underscored that the implementation will be a
long-term project. It will be necessary that learnings along the way are
used to improve impact. It will be vital that the "input, process,
output, outcome and impact" model is fully utilised. A robust policy
framework that looks to improve on both the operational and financial
aspects of the business will contribute very significantly towards India
using its water resources prudently.
As city-wide roll-outs of
smart water meters gather momentum, it will be mission critical that
learnings are utilised to improve the future deployments. Besides, the
ability of policymakers to create an environment where the public
understands better the usage and benefits of smart water meter
infrastructure will go a long way in creating a mechanism to manage
water better.
However, managing non-revenue water better through
smart meters is one part of a multi-pronged approach required to deal
with the impending water crisis. Better policies for both groundwater
and surface water management are necessary conditions for smart water
meters to deliver their full potential.
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