The Greater Melbourne Alternative Water Plan

The RHAA is pleased to present this blog authored by Urban Water Cycle Solutions and Thirsty Country. Building design can fundamentally change how Melbourne households use water and how urban water is provided.

There are three take-home messages from the Water Plan.

  1. The major determinant of Melbourne’s water use is the behaviour of buildings and particularly residential buildings. Land use planning and building controls are a key determinant of household welfare, the viability of utilities and urban water use.
  2. The impact of water service costs on household welfare is affecting the entire economy.
  3. Regulated building design fundamentally changes how Melbourne uses water, with long term nett savings to householders, utilities and government.
Figure 1: Household Expenses 2003-2016

Figure 1: Household Expenses 2003-2016

 

Figure 1 shows household expenses for water and sewerage bills have increased dramatically (143%), but water use has only increased by 2%.  Related research shows households provide a major proportion of utility revenue – increasing from 67% to 74%, households are a dominant driver of impacts on urban water supplies.

Where does the Water Plan come from?

Kingspan Environmental has commissioned the plan and is a multinational building company growing rapidly on the back of the rise in renewables, including rainwater harvesting, and energy efficiency. A perspective from an industry outside the traditional water industry can provide key insights that change our understanding of what is possible. Professor Coombes of Urban Water Cycle Solutions is the leading integrated water expert in Australia, a Fellow of Engineers Australia, former Chief Water Scientist for Victoria, a member of Standards Australia, former member of the Prime Ministers Science and Engineering and Innovation Council and advisor to the United Nations. Thirsty Country P/L provides an economic, town planning and resource management context for policy development.

What is the Water Plan based on?
Values and evidence. The values are fairness, transparency and public benefit. The process of collecting evidence and analysis was overwhelming and used a systems approach to analyse massive data sets to simulate different options. Professor Coombes paper on Big Data was voted one of the 5 most important papers in Australia in 2015 by Engineers Australia. (Coombes P.J., and Barry M.E (2015), A Systems Framework of big data for analysis of policy and strategy”, 2015 WSUD & IECA Conference. Engineers Australia. Sydney.) The Water Plan relies on public data sources, ABS, BOM, Annual Report and regulator reports. The process of scenario evaluation and systems based analysis as recently recommended by APRA for prudential management provides an independent analysis of options and system-wide costs and benefits. The process took six months of intensive data analysis.
What did the Water Plan Research find?
• Household expenditure for water services in Greater Melbourne has risen from $500/household in 2003/4 to $1000/household in 2015/16. Water Utility operating costs/property have increased by up to 199%.
• The water utility impacts on Household Welfare have risen from $1.2B to $2.5B which is a 143% increase for only 2% more water use and is relative to growth in CPI of only 38%. This is affecting the entire Victorian economy.
• The Business as Usual Option is projected to increase household expenditure on water and sewerage services to over $3 billion annually by 2050.
• The Sustainable Building option will save households $1 billion on expenses for water and sewage services every year after 2035. The water utility impact on household expenditure is projected to fall to $800/household in real terms.
• The sustainable buildings option provides a net present benefit of $1.15 billion, and contributes to stormwater management, protection of urban waterways and amenity with urban catchments by reducing
o stormwater runoff volumes by 14% (94 GL/annum);
o nutrient loads discharging to waterways by 17%; and
o risk of flood damage by 5%.
• Sustainable Buildings in NSW currently save 15% of potable water use or 90 GL annually.
• Nett whole of system cumulative savings for Greater Melbourne from the Sustainable Buildings option, including the costs of upgrading buildings, are $16B by 2050. This is a net present value of $5.75 billion.

What does the Water Plan recommend?
• The Minister for Planning request a State Planning Policy for Sustainable Buildings in Victoria incorporating performance-based targets for all new buildings and renovations. The performance-based targets would include water (40% reduction), energy (40% reduction), stormwater (30% reduction in volume) and green infrastructure.
• In the interim and prior to June 2018, the Victorian 6 star building requirement should be expanded to ensure rainwater harvesting on all new developments until a permanent strategy is implemented.
• The Minister for Planning and the Minister for Water request the Department convene a working group, independent of state monopoly interests, for a Systems Approach analysis of Melbourne’s future water challenges and water future options and their impact on household welfare and overall community benefit.
• The Minister for Finance request a review by the ACCC of Victorian water services and pricing mechanisms to explore competitive arrangements that may deliver more efficient service delivery.
• The Minister for Water amend the Water Act to allow local government to appoint current Councillors to their local Water Authority Boards.
• The Victorian government should explore new economic approaches to provision of water cycle services that eliminate fixed tariffs to provide better economic incentives and market signals for a water efficient Melbourne
• The Victorian government should develop a system of charges for stormwater runoff volumes that act as an economic incentive to reduce stormwater runoff from properties. Properties that generate stormwater runoff volumes that are similar to a local environment should not pay any tariffs and higher runoff should attract proportionally higher charges. This policy should be implemented by the EPA and local government.

Key Concepts

Figure 2: Water Behaviour in Melbourne

Figure 2: Water Behaviour in Melbourne

Figure 2 demonstrates that utility water meets about 70% of water demand in Melbourne and a range of other sources and behaviours are already viable options and important elements.

Figure 3: Current Building Performance - Sydney vs Melbourne

Figure 3: Current Building Performance – Sydney vs Melbourne

Figure 3 demonstrates that building performance in Sydney is very different to Melbourne. Savings from water efficient appliances and rainwater harvesting generate 90GL each year, equivalent to the capacity of the Sydney desalination plant. Savings compliance is achieved through the BASIX State Environmental Planning Policy

Figure 4: Water Utility Operating Costs in NSW, Victoria and SEQ

Figure 4: Water Utility Operating Costs in NSW, Victoria and SEQ

Figure 4 demonstrates NSW has substantially decreased utility operating expenses in comparison to other regions (Coombes P.J., Smit M., and MacDonald G., (2016)). Related research shows that NSW has experienced over $4 billion cumulative benefits to date from the BASIX program.

Figure 5: Business as Usual vs Sustainable Buildings

Figure 5: Business as Usual vs Sustainable Buildings

Figure 5 demonstrates the sustainable buildings option improves household welfare by reducing household expenses by $1B/year.  Nett cumulative benefits of the sustainable buildings option across Melbourne are $16B to 2050 to households, utility and government.

Figure 6: Rainharvesting vs catchment

Figure 6: Rainharvesting vs catchment

Figure 6 illustrates one of the most important concepts in urban water security in Australia. Traditional catchments stop harvesting water when annual rainfall drops below about 500mm each year. Rainwater Harvesting continues to capture runoff in drought conditions, precisely when it is most needed (Coombes P. J., and Barry M. E., (2008), The relative efficiency of water supply catchments and rainwater tanks in cities subject to variable climate and the potential for climate change, Australian Journal of Water Resources, 12 85-100)