Carbon - Like Water off a Duck's Back
There is little doubt the water industry will have to succumb to the carbon crunch, but as Dr Gareth Evans discovers, the benefits could outweigh the cost with the right approach.
The water industry is no stranger to the need to control emissions and since the regulatory landscape has almost always been in a state of flux, increasingly stringent legislation and shifts in public expectation are really nothing new. While this has often represented a significant challenge - and at times predicated the application of innovative solutions to some fundamentally old problems - it scarcely constitutes novel ground for water providers.
Against the backdrop of a burgeoning duality of emphasis on carbon control on the one hand, and establishing a carbon economy on the other, the game has now been taken, however, to a new level.
The traditional influences of mounting regulation and growing cost constraints remain, of course, but henceforth, the need to deliver an ever-diminishing carbon footprint stands alongside them. In the UK, for instance, initiatives such as the Climate Change Act, which was passed into law at the end of November 2008, and the Carbon Reduction Commitment (CRC) have major implications for the industry as a whole.
The carbon opportunity
Water ranks as Britain’s fourth most energy-intensive sector, representing around 3% of the country’s total electrical demand.
According to government figures for 2005-06, water was responsible for the release of more than four million tonnes of greenhouse gases - nearly 1% of the entire UK total – with wastewater treatment alone accounting for just over 50% of the sector’s emissions.
With statistics like these, the logic of including water companies among the group of large public and private organisations that will be subject to the provisions of the mandatory CRC strategy when it comes into effect next April is inescapable.
Even so, in the words of Nyla Sarwar of environmental engineering consultancy firm Aqua Enviro, "it is important that the water industry strikes a balance between reducing emissions and increasing water quality", something UK water regulator Ofwat’s climate change policy statement recognises. Such conflicting pressures are inevitable.
At first sight, the additional costs of compliance may appear to be an additional overhead during a recession, adding a further call on already stretched and overburdened resources – but that may simply be an issue of perception.
There are voices in the industry that welcome the opportunity that carbon control represents for competitive cost cutting and the potential enhancement of ‘green’ credentials. For Dene Clackmann of Constancy Clackmann Associates, carbon reduction could be a massive force for change.
"Take sludge treatment, for example. Thickening is hideously energy-intensive and it accounts for something like a third of the capital costs at a plant and half of its operating costs," Clackmann says. "Start looking at ways to reduce carbon consumption and you’re bound to be finding ways to reduce those costs too. CRC is going to drive a major step-change."
Clackmann is not alone in her sentiments; Liam McDonagh, head of consultancy at Ener-G, has described CRC as "a springboard to boost bottom-line performance".
Under the terms of the UK CRC, every April, water companies will have to buy allowances to meet their CO2 emissions for the coming year and for the first three years to March 2013, the cost of these will be £12 per tonne. Beyond that period, the purchase price will be set by means of a sealed bid auction and the total of allowances capped across the scheme.
Under the scheme, a penalty/bonus system also forms part of the incentive to control carbon, which has been set at 10% of the traded allowance value for 2010-11 and is widely expected to leap to 50% by 2015.
While Clackmann and McDonagh may well be right about the competitive advantages that this could bring, it seems pretty clear that the water industry is unlikely to be able to make the necessary cutbacks if it relies extensively on existing arrangements and current technologies.
If spending on low-carbon technology R&D rises to meet this new challenge, then improving energy efficiency and the development of industry-relevant alternative sources seem two areas where money would be well spent.
With carbon set to become a major influence on investment decisions for new equipment and processing systems, the benefit of adopting increasingly efficient technologies which simultaneously offer reduced embedded carbon and lowered whole life carbon costs is clear. However, improving energy efficiency alone is unlikely to bring the scale of carbon mitigation that is required in an industry which, within the UK alone, routinely consumes over 7,500 GW/h a year.
One thing that the water industry has in its favour is that it is uniquely placed to benefit from the intermittent generation of renewable energy sources which often makes the likes of wind or solar so problematic for other sectors. Storage pumping, for example, is not a time-sensitive activity. This means that alternative power can be used when it is available although more traditional means will obviously still be necessary at times.
Around the world many water plants have already made moves in precisely this direction; Western Australia's seawater desalination plant in Perth, for instance, has been powered by the 80MW Emu Downs Wind Farm since 2006. In January 2009, the United Arab Emirates opened the region's first solar-powered desalination plant at Umm Al Zamoul, nearly 200 miles from Abu Dhabi and at the end of May the switch was thrown on the Lake Skinner water treatment plant in Temecula, California, powering 10 acres of solar panels capable of generating more than two million kilowatt hours of electricity a year.
While April’s report by the UK Council for Science and Technology calls for the water industry to identify alternative and sustainable energy sources, few think that this is likely to lead to a sudden surge of wind turbines appearing among company assets.
In many ways, there may simply be no need, at least if projects recently begun by Dwr Cymru Welsh Water prove to be as effective as anticipated. Once completed in 2011, its two advanced bio-digestion plants are intended to produce 5MW of power and, most crucially, slash the company’s carbon footprint by 15% – a reduction of 35,000t of CO2 equivalent. Enhancing the traditional approach of on-site utilisation of biogas may yet provide a significant part of the answer.
Developing carbon trading
The wider ramifications of this aspect of carbon control for the global water industry could, however, shape up to be even more profound.
Having first arisen out of the growing awareness of the need to mitigate greenhouse gas emissions, the carbon credit concept provides a mechanism to reward the environmental benefits of applying anaerobic processes to wastewater treatment – both in terms of energy recovery from biogas and by the reduction of emissions. For developing countries, this could represent a vital financial lifeline – and a potentially significant source of finance for further water and wastewater treatment plants – under the Kyoto Protocol's Clean Development Mechanism (CDM).
The Andean Development Corporation, for instance, is currently working with Sedapal – Peru’s state-owned water utility – to investigate the possibility of using CDM carbon credit sales to provide the financing for a pilot project at Carapongo, in the Ate Vitarte district of Lima. Similar projects are being developed elsewhere.
There are those who criticise the idea of carbon credits as encouraging the world’s industrialised nations to adopt a "business-as-usual" approach while others effectively clean up their mess, but from a practical point of view, it is hard to argue against something which offers so many benefits to those who need them the most. Besides, there is something apt and circularly ironic about funding the betterment of local water/wastewater facilities on the back of the abilities of those same plants to meet a wider global need.