Industry Market Trends

How 'Smart Water' Technologies Are Helping Manage a Limited Resource

May 20, 2013

Credit: Doug Beckers, CC BY-SA 2.0 Credit: Doug Beckers, CC BY-SA 2.0

Smart electric metering and smart grid technologies are transforming the management of electric power worldwide -- and creating a huge cleantech market in the process. But could the same thing happen in the world of water? Is a "smart water grid" beginning to emerge, along with a market for products to support it?

I put that question to Colin Walsby, vice president for strategic solution development at Sensus, a Raleigh, N.C.-based provider of infrastructure solutions for utilities, including water-metering products and information systems. He told me that "smart water network" is probably a better term, although "grid" is being widely used to describe the increasing efforts of utilities to apply advanced technologies to better manage and conserve water.

Sensus describes a smart water network as "a fully integrated set of products, solutions and systems" that enables a water utility to "remotely and continuously monitor and diagnose problems, preemptively prioritize and manage maintenance issues, and remotely control and optimize all aspects of the water distribution network using data-driven insights." Such a system also should help the utility meet regulatory requirements and give customers "the information and tools they need to make informed choices about their behaviors and water usage patterns."

OMNI Compound advanced water meter. Courtesy of Sensus. OMNI Compound advanced water meter. Courtesy of Sensus.

Walsby told me that Sensus's interest in smart water networks grew out of the company's long-term presence in the water meter business going back over a century, and especially as a provider of automatic meter reading (AMR) and advanced metering infrastructure (AMI). "More recently," he explained, utilities have sought out "a real-time communication infrastructure that allows those meters to be read but that also provides data." Sensus has seen "a shift in the industry where utilities want to start understanding the data coming from the network -- not only for billing customers, but for understanding what's going on in the network, such as trends around leakage."

A Water-Stressed World

The emergence of smart technologies that can help conserve water is a timely development. According to the United Nations,

Around 1.2 billion people, or almost one-fifth of the world's population, live in areas of physical scarcity, and 500 million people are approaching this situation... By 2025, 1.8 billion people will be living in countries or regions with absolute water scarcity, and two-thirds of the world's population could be living under water-stressed conditions.

Worldwide freshwater availability. Credit: United Nations. Worldwide freshwater availability. Credit: United Nations.

Sensus recently released a report in which it cites that grim 1.8 billion figure and asserts that "The human, environmental and financial stakes couldn't be higher."

Smart Water: The Business Case

Credit: Harry Wood, CC BY-SA 2.0 Credit: Harry Wood, CC BY-SA 2.0

In conducting its research, Sensus surveyed and interviewed 182 global water utilities and analyzed their operations to understand the business case for the growing interest in smart water networks. The study found that utilities could rack up $12.5 billion in annual savings through improved management of leakage and pressure; better prioritization and allocation of capital expenditures; streamlined network operations and maintenance; and improved water-quality monitoring.

Utilities are paying attention to this opportunity for savings. According to a recent study by research firm IDC, global spending by utilities on smart water technology is growing at a compound annual growth rate (CAGR) of 18.7 percent and is expected to reach $3.3 billion by 2016. This growth rate is significantly higher than the baseline 5 percent in overall water utility spending, demonstrating considerable interest in this technology. IDC says the smart water meter market is driven by regulatory issues, by water shortages, and by a worrisome "long-term imbalance between supply and demand."

Research also points to the current state of infrastructure as a driver behind smart water. Rick Nicholson, IDC's vice president for Energy Insights said in a company announcement that "The smart water market includes many of the same technology components as the smart grid market and is aimed at addressing global issues like water stress and aging infrastructure." Research by the American Water Works Association (AWWA) has found that, in the U.S., much of the more than one million miles of water supply pipes "is nearing the end of its useful life and approaching the age at which it needs to be replaced," which the association says will cost more than $1 trillion over the next 25 years.

Smart technology can help in flagging the parts of the water network that need to be replaced or repaired, Walsby explained to me: "If you have more data about your network through installing more sensors, you can use that data to make smarter decisions about where to invest in the network." Investment decisions can be based on evidence, whereas "today, utilities are replacing infrastructure more on a reactive basis."

IDC's research also draws an interesting line between water and energy, what the firm refers to as the "energy-water nexus." The reality is that

It takes a large amount of energy to extract, treat, store and transport water. Indeed, approximately 15 to 30 percent of a typical water utility's operations and maintenance expenses are for energy. At the same time, a large amount of water is used in the production of energy -- particularly as cooling water for power plants and for hydraulic fracturing, or "fracking," in oil and gas drilling.

That means that conservation of water results in conservation of energy, providing added incentive for water utilities to add smart metering and analytical capabilities to their water networks.

IDC says that, besides hardware like meters, sensors, and remote terminal units (RTUs), this industry will see significant demand for software systems, especially advanced analytics.

Smart-Water Functionality

Smart water base station. Courtesy of Sensus. Smart water base station. Courtesy of Sensus.

In describing the technologies behind smart water networks, the report from Sensus describes "five interconnected layers of functionality" making up a comprehensive solution:

  1. Physical hardware for measurement and sensing, such as smart meters and other endpoints, designed to collect data on parameters like water flow, pressure, and quality.
  2. Real-time two-way communication channels that transmit data on the functioning of devices and that trigger actions such as remote shutoff.
  3. Data management software and warehousing that help utilities process data and that presents "an aggregated view" through network visualization tools, geographic information systems (GIS), dashboards, spreadsheets, or graphs.
  4. Analytics and modeling applications that deliver "actionable insights from network data." This layer of software enables the utility to monitor the distribution network in real time and identify hazards or anomalies, to model future scenarios, and to predict the impact of changes under consideration.
  5. Automation and control tools that "interface with the real-time data analytics and modeling software" and that enable the utility to "conduct network management tasks remotely and automatically."

Sensus's research finds that lack of a strong business case or unfavorable economics is an obstacle for many utilities in implementing smart water network technologies, 65 percent of respondents citing this as a key barrier to adoption. For many utilities, even with a strong business case, funding simply isn't available. Respondents told researchers that regulatory support and public incentives could help kick-start implementation, especially for municipalities in water-stressed regions. Survey responses also suggest that decision makers see smart water technologies as difficult to integrate because of fragmentation and lack of industry standards.