The historically low cost of water is soon to be a thing of the past as the water price tracks the trend seen in the electricity sector, as attempts are made to better conserve this scarce, finite resource.
Water prices are expected to soar as treated water supplies come under pressure and, with South Africa’s dams, rivers, wastewater systems and water distribution systems in a dire state, it is crucial that action is taken.
“Unlike electricity, which you can generate yourself when supplies are not available, water cannot be generated. It is a resource that is already under a great deal of pressure and it will become increasingly scarce,” says South African water and wastewater solutions provider Talbot & Talbot CEO Carl Haycock.
The increasing pressure on water resources is leading to a global rise in supply risk and the cost of total water management, and, while there has been a lag, Haycock expects to see fairly steep price increases over the next few years as government seeks to generate more revenue and increase its margin.
“We have done a lot of data modelling and found that, over the last five years, most municipalities have seen increases of between 10% and 14%,” Haycock points out.
“We have seen water as a relatively cheap resource in the past, and we have not implemented appropriate measures. With consumers expected to start paying for water infrastructure, we can expect double-digit price increases for many years to come,” he says.
The total cost of water is projected to increase significantly above the consumer price index for the foreseeable future.
With increasing water scarcity and the investment required to sustain future demand, the Department of Human Settlements, Water and Sanitation (DHSWS) has had to re-evaluate the true cost of water.
“The majority of our dams, water treatment facilities and wastewater systems are decades old, while inadequate maintenance has been done in the past 20 years and the population has virtually doubled since this infrastructure was installed, so the existing infrastructure cannot cope with demand.”
This is exacerbated by droughts in the Western Cape and KwaZulu-Natal.
In addition, Talbot new business director Helen Hulett points to a significant backlog in reliable water supply.
Based on current demand projections, and without effective interventions, the water deficit in the country could be between 2.7-billion cubic metres and 3.8-billion cubic metres, a gap of about 17% of the available water sources by 2030.
Service provider reliability is having a significant impact on industry, including loss of production, shutdowns and standing costs, and process damage, with current multibillion-rand backlogs in refurbishment and renewal.
Although water reconciliation strategies have been identified, these will require significant investment and prioritisation.
The strategies include desalination, reuse, projections of availability and water restrictions, increased dam storage, conservation and demand management, besides others.
Over half the country’s water treatment works produce poor-quality water, with 44% of water treatment works in poor or critical condition and 11% dysfunctional.
This has further impacts on costs and contributes to the rising water price.