Water Sector. Business Case for Private Sector Intervention in Water Supply. Sustainability Week June Raldo Kruger. In partnership with

Transcription

1 Water Sector Business Case for Private Sector Intervention in Water Supply Sustainability Week June 2018 Raldo Kruger In partnership with

2 GreenCape 2

3 GreenCape Demand Water User drought support Supply Technology / solution providers market intelligence Regulatory / Research / Finance Unlocking opportunities 3

4 Dam levels of the biggest six dams (26 Feb 2018) % 103.5% 72.4% 60.1% 34.7% 20%

5 Day Zero January 2018 Source: Water Outlook 2018 ( ) 18/06/12 5

6 Day Zero April 2018 Source: City of Cape Town Water Dashboard ( ) 18/06/12 6

7 Day Zero 2019? 80% capacity 37% capacity With restrictions 23% capacity Oct Nov Dec Jan Feb Mar Apr Source: City of Cape Town Water Dashboard ( ) 18/06/12 7

8 City of Cape Town current augmentation programme Source Target yield (MLD) Cost / 1000L Notes Ground 100 R7.50 R10 More could be abstracted from ground water sources in dry years Re-use 70 R8 R11 One large-scale reuse reclamation plant (economies of scale) Desalination 120 R12 R18 Optimal scale for desalination is MLD Surface water 60 R5 R7.50 Lower Berg River Voelvlei Augmentation Scheme Total (diverse sources) 350 For City s water management plans see: 8

9 Opportunities - General Drivers Risks of insufficient water supply Tariffs historically too low to drive market, but increases have improved the business case Commercial and industrial water and sanitation tariffs (City of Cape Town): Water restrictions Social responsibility 9

10 Report Outline Aimed at investors highlights key opportunities in the SA urban water sector Sector Overview Policy and Regulations Opportunities and Barriers Industrial Commercial Residential Municipal markets Funding and Incentives Download: 10

11 Key opportunities in the urban water sector Water metering & monitoring Water efficiency Water reuse Alternative water supply Market Water metering and monitoring Water efficiency and reuse Alternative water supply Industrial Commercial Residential Municipal

12 Key opportunities in the urban water sector Water metering & monitoring Water efficiency Water reuse Alternative water supply Market Water metering and monitoring Water efficiency and reuse Alternative water supply Industrial Commercial Smart water metering Water quality monitoring Residential Municipal Non-revenue water SA metro market: R2 billion p.a. Non-revenue water tool

13 Key opportunities in the urban water sector Water metering & monitoring Water efficiency Water reuse Alternative water supply Market Water metering and monitoring Water efficiency and reuse Alternative water supply Industrial Commercial Smart water metering Water quality monitoring Industrial effluent treatment Upgrading treated effluent Water exchange networks (~2300 manufacturing sites in CT) Onsite reuse Water efficient devices Residential WC new development market: R900m (2018) Municipal Non-revenue water SA metro market: R2 billion p.a. Potable water reuse CT market: ~R2 billion

14 Key opportunities in the urban water sector Water metering & monitoring Water efficiency Water reuse Alternative water supply Market Water metering and monitoring Water efficiency and reuse Alternative water supply Industrial Commercial Residential Smart water metering Water quality monitoring Industrial effluent treatment Upgrading treated effluent Water exchange networks (~2300 manufacturing sites in CT) Onsite reuse Water efficient devices WC new development market: R900m (2018) Groundwater supply Rainwater harvesting Seawater desalination WC residential market R5.8 billion Municipal Non-revenue water SA metro market: R2 billion p.a. Potable water reuse CT market: ~R2 billion Groundwater Seawater desalination

15 Medium sized manufacturing company Project payback period (years) Metering Inorganic Effluent Reuse Payback period for Level 1 restrictions Treated effluent Rainwater harvesting 4,50 4,00 3,50 3,00 2,50 2,00 1,50 1,00 0,50 - Project cost (Million Rands) Payback period for Level 6 restrictions Achieved % Water Project municipal water savings Smart Water Metering 5 Inorganic Effluent Reuse 70 Treated effluent 50 Rainwater harvesting 44 2 main meters and 4 sub-meters were taken into account and it was assumed that a 5% reduction A 70% water recovery from the treatment of the inorganic effluent was achieved. Capital costs are approximately R10-15 million/mld. For this modelled scenario, a basis of 100 kl/day production capacity was used. The estimated roof size was m 2 and storage 400Kl. Project Cost Understand water uses and risks Reuse water Alternative water source Restriction tariffs level 1: R22.78/kl consumptive, R20.47/kl sanitation; Level 6: R52.61/kl consumptive, R44.56/kl 15

16 Large manufacturing company Project payback period (years) 12,00 10,00 8,00 6,00 4,00 2,00 0,00 Metering Organic Effluent Reuse Groundwater production Payback period for Level 1 restrictions Payback period for Level 6 restrictions Project Cost (Rands) Project cost (Million Rands) Water Project Metering 5 Organic Effluent Reuse 70 Groundwater production 20 Achieved % water savings 4 main meters and 8 sub-meters were taken into account. A 70% water recovery from the treatment of the organic effluent. Project capital costs range between R20 million 60 million. For this scenario, a basis of 200 kl/day groundwater production capacity was used. Understand water uses and risks Reuse water Alternative water source Restriction tariffs level 1: R22.78/kl consumptive, R20.47/kl sanitation; Level 6: R52.61/kl consumptive, R44.56/kl 16

17 Case Studies Textile manufacturing Hospitality industry Commercial offices / office parks Commercial retail Pharmaceutical industry Beverage industry Cement manufacturing 17

18 General barriers Municipal market: Access to suitable off-budget funding Creditworthiness of the municipality Capacity constraints Procurement processes Private sector market: Access to capital Property leasing Regulations (e.g. Water Use Licence timeframes, brine disposal) 18

19 Outlook There are good prospects for investment in the Western Cape and, current tariffs make projects financially feasible with decent payback periods. Technical, financial, regulatory barriers can be overcome, but some will take time.. 19

20 Thank You Raldo Kruger Water Sector Analyst