Water Conservation Report 2016-2017

Water Conservation Report 2016-2017
Water Conservation Report
2016-2017
Water Conservation Report 2016-2017
Table of contents
Executive summary ...................................................................................................................... 3
    Introduction and regulatory context .................................................................................... 13
  1.1    Approval of the ELWC Methodology ............................................................................................... 14

    Our five-year plan .................................................................................................................. 15
  2.1    The value of water ............................................................................................................................. 15
  2.2    Overview ............................................................................................................................................. 17
  2.3    Projects in the Water Conservation Plan ........................................................................................ 22
  2.4    Programs that have reached maturity ............................................................................................. 43

    Development of the Water Conservation Plan .................................................................... 44
  3.1    The ELWC Methodology ................................................................................................................... 45
  3.2    Quantifying the ELWC ....................................................................................................................... 46
  3.3    Development of the Water Conservation Plan................................................................................ 47
  3.4    Stakeholder Consultation on the Water Conservation Plan ......................................................... 49
  3.5    Alignment with the 2017 Metropolitan Water Plan ......................................................................... 50

    Water efficiency in 2016-2017 ............................................................................................... 51
  4.1    Water Use ........................................................................................................................................... 51
  4.2    Efficiency Programs .......................................................................................................................... 57
  4.3    Leak management ............................................................................................................................. 59
  4.4    Water Recycling ................................................................................................................................. 61

Appendix 1              Our total water savings for 2016-17 .................................................................. 64
Appendix 2              Reporting Requirements.................................................................................... 65
Appendix 3              Levelised costs, assumptions and water savings ........................................... 66
Appendix 4              Valuing and comparing cost and benefits ........................................................ 70
Appendix 5              Correcting for Weather ...................................................................................... 72
Appendix 6              Calculating the Economic Level of Leakage .................................................... 74
Appendix 7              Estimating Leakage............................................................................................ 75
Appendix 8              Glossary.............................................................................................................. 77
Appendix 9              List of acronyms and units ................................................................................ 78




Water Conservation Report | 2016-2017                                                                                                                 Page | 2
Water Conservation Report 2016-2017
Executive summary
Introduction
Each year, we report on how we conserve water in accordance with Section 3 of our Operating
Licence 2015–2020. For the first time this is based on the Economic Level of Water Conservation
(ELWC) methodology, approved by IPART in December 2016.
This report outlines our Water Conservation Plan (WCP) for the next five years and how we
prepared it using the new methodology. It also reports on the costs and water savings from our
water conservation programs run in 2016-17.

Development of the Water Conservation Plan
The WCP describes Sydney Water's plans for water conservation over the next five years.
Development of the WCP has been informed by the new ELWC methodology, as outlined below in
Figure 0-1. It is important to note that not all the projects in the WCP are based purely on
economic efficiency. Some of our water conservation activities are undertaken as commercial
offerings, social programs, and to build and maintain capability.




Water Conservation Report | 2016-2017                                                      Page | 3
Water Conservation Report 2016-2017
•Quantify the volume of water that would be saved over the life of the water
                 conservation project
     Step 1



                •Quantify and value costs over the life of the candidate project, including:
                 •Design and implementation costs
                 •Avoided and/or avoidable costs
     Step 2
                 •Any positive external (social and environmental) benefits



                •Calculate the levelised cost of the candidate project.
     Step 3



                •Compare the levelised cost against the value of water, and only carry forward a
                 project if the levelised cost is less than the value of water.
     Step 4




                •Finalise the list of candidate projects and develop a draft Water Conservation
                 Program.
     Step 5




Figure 0-1 ELWC methodology key steps




The current value of water
The ELWC methodology was by approved by IPART in December 2016. For this report, the short-
run value of water was estimated based on dam levels at the start of January 20171. In future, we
will align the value of water with our business planning and approval processes to ensure
alignment of the program with budget and resources.
At the start of January 2017, the values of water were:
      -   Short-run value of water was $0.56 per kL
      -   Long-run value of water was $2.04 per kL
The period of time over which water savings are assumed to occur for a particular project
determines the value of water against which the project will be evaluated. See Table 0-1.



1   Value from the first weekly verified storage report released in January 2017.


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Water Conservation Report 2016-2017
Table 0-1 Duration of water savings benefits vs the value of water

Duration of water saving benefits                Value of water

 5 years or less                                  Short-run

 6-19 years                                       Intermediate (interpolated between long and short
                                                  run values)

 20 years or more                                 Long-run




Figure 0-2 Replacing leaking taps is part of our Waterfix program




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Water Conservation Report 2016-2017
Our Five-Year Water Conservation Plan
Table 0-2 lists the projects that comprise our Water Conservation Plan for the five-year period
commencing 1 July 2017. In addition to our ongoing and new water conservation projects, the plan
includes projects that may be implemented at a later date depending on future dam levels, as well
as several research and capability building initiatives. Full details of the projects are described in
Section 2.3.

Table 0-2 - Our Water Conservation Plan Projects

    Project status             Project type        Project

                               Water efficiency    Waterfix residential

                               Water efficiency    Waterfix strata
    Ongoing
                               Water efficiency    PlumbAssist

                               Water efficiency    Supporting and research and development projects

                               Leakage             Active Leak Detection Program

    To be implemented in       Water efficiency    Rainwater Tank Repair
    2017-182

                               Water efficiency    Council partnerships
    More viable with an
    increase in the value of   Water efficiency    D&BCS3 Online Monitoring
    water
                               Water efficiency    D&BCS4 Efficiency Audits

                               Water efficiency    Love Your Garden



Our proposed 5-year WCP is based on the value of water and the ELWC methodology. The
levelised cost of each project has been assessed where we have reliable information to estimate
the costs, water savings and benefits (where they can be quantified) of individual projects. This is
detailed in Appendix 3.
Where projects are considered economically efficient at the current value of water, we have
included them in our five-year plan. Our ongoing water conservation projects are our Active Leak
Detection Program, Waterfix Residential and Waterfix Strata. The ELWC also includes one
program (Rainwater Tank Repair) which we will initiate in 2017-18, subject to business case
approval.



2 Subject to business case/funding approval
3 Developer and Business Customer Services
4 Developer and Business Customer Services




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Water Conservation Report 2016-2017
We may also run projects which conserve water for reasons other than water efficiency, such as
commercial offerings, social programs for our customers in hardship, and research and
development. These are detailed in Appendix 3. For example, we will continue our PlumbAssist
program. It is not efficient at the current value of water, however we primarily undertake
PlumbAssist as a regulated social program for our customers in hardship. Our Waterfix programs,
on the other hand, are not only economically efficient, but a commercial offering for our customers.
The projected water savings from projects which are economically efficient are added to calculate
the ELWC in ML/day. Based on the current value of water, our ELWC for the next five years is 23.5
ML/day. Our total water savings are projected to be 23.7 ML/day. Year-by-year savings for each
project are detailed in Table 0-2.
Our actual level of investment in water conservation, and the amount of water savings that result,
will change over time as circumstances evolve, including changes in the value of water. The ELWC
is a forward-looking methodology, and we are not considering ongoing savings from projects
implemented until now, including from our leakage program and our water recycling program.




Figure 0-3 Irrigation with recycled water from Picton Water Recycling Plant




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Water Conservation Report 2016-2017
Table 0-3 Predicted water savings for our forward-looking 5-year WCP based on the current value
of water

Project type   Project                                 Potential water savings (ML)5

                                  2017-       2018-       2019-       2020-    2021-         5-year Total
                                  18          19          20          21       22

    Economically efficient projects

Efficiency     Waterfix
                                   10         20           30          39          49           148
               residential6

Efficiency     Waterfix
                                   193        386          579         772         965          2,896
               strata7

Efficiency     Rainwater
                                  17          34          51          69           86           257
               Tank Repair8

Leakage        Active Leak
               Detection          3,572       5,656        7,861      10,145       12,452       39,688
               Program9

Total predicted ELWC water
                                  3,792       6,096        8,521      11,025       13,552       42,986 ML
savings (ML)

ELWC (ML/day)                                                                                  23.5 ML/day

    Projects we complete for reasons other than water efficiency

Social
               PlumbAssist10       21.2       42.4         63.6        84.8        106.0        318
project

Total potential water
                                  3,814       6,139        8,584      11,110       13,658       43,304 ML
savings (ML)

Total potential water
                                                                                               23.7 ML/day
savings (ML/day)



5 Including water savings benefits expected to last for multiple years.
6 Projections based on average recent data
7 Projections based on average recent data
8 To be implemented in 2017-18, subject to business case/funding approval
9 Projection of savings based on 2016-17 baseline, average leak rate of rise and subject to no change in

internal policies. The savings are calculated in comparison to not implementing a leakage program. In
previous years, reporting of the leakage program included savings from a baseline as of 2002. A new
business case has been developed from 2016-17. Going forward we will be reporting against the 2016-17
baseline. Our total water savings from the program since 2002 will remain at approximately 20 billion litres
per year.
10 Projections based on average recent data




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Water Conservation Report 2016-2017
Our WCP also includes a number of projects which we can implement if water becomes scarcer
and the value of water rises. These are mature projects that have been completed or piloted during
the millennium drought (2003-2009), and we estimate that future investment in these projects will
result in efficient water savings if dam levels drop. These projects are listed in Table 2-3, and full
details are in Section 2.3.3.

Table 0-4 Programs we will implement if the value of water rises

 Program (subject to business case/funding         Levelised       Anticipated Annual Water savings
 approval)                                         Cost            (ML)

 Council partnerships                                 $0.72                      210.4

 D&BCS 11Online Monitoring                            $1.29                      22.8

 D&BCS12 Efficiency Audits                            $3.50                      136.9

 Love Your Garden                                     $12.45                     42.2


The full list of our ongoing programs can be found in Section 2.3.1, and their levelised costs,
assumptions and water savings are detailed in Appendix 3. This includes a range of activities that
support the development of the WCP, 2017 Metropolitan Water Plan and water conservation
projects, such as pilot trials of projects, demand analysis and research. These activities help us to
target future effort and quantify potential water savings to inform levelised cost calculations.
While there was an exhaustive assessment of projects during the millennium drought, new
technologies and drivers may change the viability of projects we have previously assessed, or
provide opportunities for new projects. These projects need to be piloted in order to determine the
true costs and benefits prior to completing the ELWC calculations. Details of these projects can be
found in Section 2.3.4.




11   Developer and Business Customer Services
12   Developer and Business Customer Services


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Water Conservation Report 2016-2017
Figure 0-4 A rain gauge can help you determine how much water your garden needs

Our Water Conservation Plan is made up of three main elements: our water leakage, water
efficiency, and recycled water programs.

Our leakage program is the backbone of our five-year WCP. While this program is primarily
completed for the purposes of water conservation, it also has significant reputational and asset
maintenance benefits. We will adjust the scale of the leakage program annually in line with the
value of water and the ELWC methodology.
On the current value of water, the economically efficient level of water efficiency projects is limited.
However, opportunities for these projects will increase as the value of water increases.
We have not assessed our recycled water program using the ELWC methodology, nor included
water savings from our current schemes in our projected water savings for the next five years. We
consider these schemes to be past investments. While our recycled water program will continue to
save approximately 13 billion litres of water a year, the ELWC is a forward-looking methodology
and is not intended for considering current operational recycled water projects, nor water savings
from past projects.
Review of past recycling projects have generally shown that costs are greater than the value of
water. We will continue to explore new technologies and methods of making recycled water more
efficient. The 2017 Metropolitan Water Plan also acknowledged that there are currently policy,
regulatory and pricing barriers that artificially constrain the use of recycled water when determined
based on an integrated water cycle management approach. The Metropolitan Water Plan
proposed an independent review of the barriers and enablers of recycled water and also proposed
the three-year WaterSmart Cities program to explore opportunities for delivering drinking water,
recycled water, wastewater and stormwater services to new communities in a more integrated,
cost effective and sustainable way.




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We are actively seeking opportunities to leverage the contribution that recycled water can make
within an integrated water cycle approach (for servicing growth in areas such as Greater
Parramatta to the Olympic Peninsula, and Western Sydney, for example) through better
quantifying avoided cost and externalities, seeking opportunities to leverage existing infrastructure,
and exploring new servicing approaches (such as decentralised and precinct based approaches).

The ELWC Methodology
The ELWC methodology is designed to promote economically efficient investment in water
conservation, including water efficiency, leakage and recycling. It evaluates whether the cost to
society of a water conservation project is less than the value of water that it saves. If so, it is
considered economically efficient.
Our ELWC methodology is based on a marginal value framework, where investment in water
conservation could increase until the cost of saving an extra volume of water is just equal to the
cost of supplying an extra volume of water.

Quantifying the ELWC
Once we have determined if our projects are economically efficient (i.e. the levelised cost is less
than the value of water), we calculate the ELWC. This is an estimate of the amount of water that
could be conserved each year by viable projects, based on our economic assessment of costs and
benefits across individual water conservation projects. We calculate the ELWC by adding the total
amount of water that could be saved during the five-year program across all the economically
viable and available projects and converting to an average ML/day basis.
The ELWC for our program based on the January 2017 value of water is 23.5 ML/day. However,
we also plan to continue some projects, such as PlumbAssist, which conserve water for other
reasons.
The ELWC 5-year WCP and ELWC methodology only considers new and ongoing water
conservation programs. It does not consider ongoing savings from previously completed programs,
even though these may be significant.

2016-17 Water Use and Water Conservation Program
Total water use13 for 2016–17 was 557,807 million litres compared to 529,939 million litres in
2015–16. This includes water used by the residential sector, businesses, industry, irrigation and
leaks. This amount is similar to total water use in 2003–04, when the population was around 20%
lower than now and water restrictions were in place. On a per person basis water use continues to
remain at a similar level to when Level 3 water restrictions were replaced with Water Wise Rules.
Despite the warmer than average weather, average water use per person for 2016–17 was
estimated to be 307 litres a day14. When corrected for weather impacts, average per person water
demand reduces to 302 litres a day (Appendix 5).


13 Total water use includes potable water and unfiltered water provided for industrial use in the Illawarra.
Recycled water is not included.
14 Observed demand not corrected for weather impacts.




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We estimate that we saved 11,091 ML in measurable water savings in 2016-17. Our efficiency
program included PlumbAssist, Waterfix Residential and the new Waterfix Strata. Our leakage
program saved 1,38715 million litres, and our ongoing recycled water projects saved 9679 million
litres of water in 2016-17. A summary of our total costs and water savings from 2016-17 can be
found in Appendix 1.




Figure 0-5 — Active leak detection is a key part of maintaining low levels of leakage.


15 This is much lower than previous years as it is based on a 2016-17 baseline. In previous years, reporting of the leakage program
included savings from a baseline as of 2002. A new business case has been developed from 2016-17. Going forward we will be
reporting against the 2016-17 baseline. Our total water savings from the program since 2002 are 19,565 ML/year..



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Introduction and regulatory context
Each year, we report on how we conserve water in accordance with Section 3 of our Operating
Licence 2015–2020. For the first time this is based on the Economic Level of Water Conservation
(ELWC) methodology, approved by IPART in December 2016.
In the past, obligations in Sydney Water’s Operating Licence regarding water conservation have
been fixed and prescriptive. From 1995 we were required to achieve a per capita reduction of
water use to 329 litres per person per day (LPD) by 2011. From 2011, we were required to ensure
that water use did not exceed this limit. This approach was not dynamic in that it did not vary with
our dam levels, which may not have always incentivised the most efficient water conservation
investment decisions.
The new methodology promotes economically efficient decisions in water conservation which can
consider social and environmental costs and benefits in addition to the cost of the program and the
water saved. It is also adaptable, meaning that we are prepared for a range of dam levels, demand
conditions, and climatic factors.
This report outlines our plan for the next five years and describes how we prepared it using the
new methodology. It also reports on the costs and water savings from our water conservation
programs run in 2016-17.
Appendix 2 outlines how this report meets specific requirements in the Operating Licence
Reporting Manual.




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1.1 Approval of the ELWC Methodology
The ELWC was introduced in the Operating Licence 2015–2020, with the new requirements for
water conservation, reproduced below:

                 3.2 Economic level of water conservation
                 3.2.1 By 1 November 2015, Sydney Water must submit to IPART (for
                       IPART’s approval) a report outlining Sydney Water’s approach
                       to, and principles for, developing a methodology for
                       determining its economic level of water conservation, including
                       (at a minimum) each of the following elements of water
                       conservation:
                     a) water leakage
                     b) water recycling; and
                     c) water efficiency (including demand management)
                 3.2.2 Once the approach and principles referred to in clause 3.2.1
                       are approved by IPART, Sydney Water must develop a
                       methodology in accordance with the approach and principles.
                 3.2.3 By 31 December 2016, Sydney Water must obtain IPART’s
                       approval for the Methodology.


In 2015 the Independent Pricing and Regulatory Tribunal (IPART) approved the approach and
principles that Sydney Water used to develop a methodology to determine its Economic Level of
Water Conservation (ELWC).
An industry reference group including Hunter Water, the Metropolitan Water Directorate and Water
NSW met periodically to provide guidance to the project.
In April 2016 Sydney Water released an issues paper to seek feedback from stakeholders on the
various methodology options. These were incorporated into the final report, as well as comments
from a public forum held in October 2016 to consult with interested parties.
The ELWC methodology was approved by IPART in December 2016.




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Our five-year plan
This section outlines the projects included in the Water Conservation Plan. We undertake water
conservation programs in three main areas: water efficiency, water leakage and water recycling .
Water efficiency projects primarily aim to conserve water through efficient technologies, behaviour
change, metering, voluntary use reduction and efficiency audits.
Our leakage program is made up of operational projects completed by Sydney Water to reduce
water leakage in our system. This may include proactive leak detection and repair, new
technologies, and pressure reduction projects.
Our water recycling program aims to reuse water, whether it be wastewater or stormwater. These
projects can range from large scale wastewater recycling, to sewer mining to stormwater
harvesting. These projects are considered to be water conservation projects when they reduce
demand on our surface water supplies.
When the levelised cost of a project is lower than the value of water, we will implement it, subject
to business case for funding approval. We have included projects which are ongoing, as well as
projects we can implement if water becomes scarcer. We have also included projects we need to
pilot to be able to estimate costs and benefits. However, we also undertake some projects for
reasons other than water conservation alone. These could be commercial offerings, social
projects, or research projects. An explanation of these types of projects is in Appendix 3.


2.1 The value of water
The ELWC methodology was approved by IPART in December 2016. For this report, the current
short-run value of water was estimated based on dam levels as at the start of January 201716.
Dam levels in early January 2017 were at 89.7%. The value of water is dependent on its scarcity,
so a high dam level results in a low short run value of water. In future, we will align the value of
water with our business planning and approval processes.
The long run value of water, which is intended to reflect long term investment in infrastructure and
supply, is not directly affected by dam storage levels. The long run value of water used for this
report reflects the regulated retail price of water that will apply during the 2017-18 financial year.
At the start of January 2017, the values of water were:
      -   Short-run value of water was $0.56 per kL
      -   Long-run value of water was $2.04 per kL




16   Value from the first weekly verified storage report released in January 2017.


Water Conservation Report | 2016-2017                                                          Page | 15
The period of time over which water savings are assumed to occur for a particular project
determines the value of water against which the project will be evaluated. See Table 2-1.

Table 2-1 Duration of water savings benefits vs the value of water

 Length of water saving benefits                                          Value of water

 5 years or less                                                          Short-run

 6-19 years                                                               Intermediate

 20 years or more                                                         Long-run



Projects which fall into the Intermediate category will be assessed against a linear interpolation of
the short- and long-run values of water. This is shown in Figure 2-1.



                                              Economic Level of Water Conservation 2017 - Value of Water
                                   $2.50




                                   $2.00                                                      $2.04
                                                                                           $1.94
  Value of water ($ / kilolitre)




                                                                                        $1.84
                                                                                     $1.74
                                                                                  $1.64
                                                                               $1.55
                                   $1.50
                                                                            $1.45
                                                                         $1.35
                                                                      $1.25
                                                                   $1.15
                                                                $1.05
                                   $1.00
                                                             $0.95
                                                          $0.85
                                                       $0.75
                                            $0.56   $0.65

                                   $0.50




                                     $-
                                           1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
                                                                     Duration of water savings (years)


Figure 2-1 - Short-run to Long-run values of water




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2.2 Overview of the Water Conservation Plan
Table 2-1 lists the projects that comprise our Water Conservation Plan for the five year period
commencing 1 July 2017. In addition to our ongoing water conservation projects, the plan includes
projects that may be implemented at a later date depending on future dam levels, as well as
several research and capability building initiatives.

Table 2-2 - Water Conservation Plan Projects

 Project status              Project type         Project

                             Water efficiency     Waterfix residential

                             Water efficiency     Waterfix strata
 Ongoing
                             Water efficiency     PlumbAssist

                             Water efficiency     Supporting research and development projects

                             Leakage              Active Leak Detection Program

 To be implemented in        Water efficiency     Rainwater Tank Repair
 2017-1817

                             Water efficiency     Council partnerships
 More viable with an
 increase in the value of    Water efficiency     D&BCS18 Online Monitoring
 water
                             Water efficiency     D&BCS19 Efficiency Audits

                             Water efficiency     Love Your Garden



Our proposed 5-year WCP is based on the value of water and the ELWC methodology. The
levelised cost of each project has been assessed where we have reliable information to estimate
the costs, water savings and benefits (where they can be quantified) of individual projects. This is
detailed in Appendix 3.
Where projects are considered economically efficient at the current value of water, we have
included them in our five-year plan. Our ongoing water conservation projects are our Active Leak
Detection Program, Waterfix Residential and Waterfix Strata. The ELWC also includes one
program (Rainwater Tank Repair) which we will initiate in 2017-18, subject to business case
approval.
We may also run projects which conserve water for reasons other than water efficiency, such as
commercial offerings, social programs for our customers in hardship, and research and

17 Subject to business case/funding approval
18 Developer and Business Customer Services
19 Developer and Business Customer Services




Water Conservation Report | 2016-2017                                                        Page | 17
development. These are detailed in Appendix 3. For example, we will continue our PlumbAssist
program. It is not efficient at the current value of water, however we primarily undertake
PlumbAssist as a regulated social program for our customers in hardship. Our Waterfix programs,
on the other hand, are not only economically efficient, but a commercial offering for our customers.
The predicted water savings from projects which are economically efficient are added to calculate
the ELWC in ML/day. Based on the current value of water, our ELWC for the next five years is 23.5
ML/day. Our total water saving are projected to be 23.7 ML/day. Year-by-year savings for each
project are detailed in Table 2-3.
Our actual level of investment in water conservation, and the amount of water savings, will adjust
over time as circumstances evolve, including changes in the value of water.
The ELWC 5-year plan only considers new and ongoing water conservation programs. It does not
consider ongoing savings from previously completed programs, even though these may be
significant.




Figure 2-2 The Love Your Garden Program includes advice on how and when to water your
garden




Water Conservation Report | 2016-2017                                                       Page | 18
Table 2-3 Predicted water savings for our forward-looking 5-year WCP based on the current value
of water

Project type   Project                                 Potential water savings (ML)20

                                  2017-       2018-       2019-       2020-    2021-         5-year Total
                                  18          19          20          21       22

     Economically efficient projects

Efficiency     Waterfix
                                   10         20           30          39           49          148
               residential21

Efficiency     Waterfix
                                   193        386          579         772          965         2,896
               strata22

Efficiency     Rainwater
                                  17          34          51          69           86           257
               Tank Repair23

Leakage        Active Leak
               Detection          3,572       5,656        7,861      10,145       12,452       39,688
               Program24

Total potential ELWC water
                                  3,792       6,096        8,521      11,025       13,552       42,986 ML
savings (ML)

ELWC (ML/day)                                                                                  23.5 ML/day

     Projects we complete for reasons other than water efficiency

Social
               PlumbAssist25       21.2       42.4         63.6        84.8         106.0       318
Project

Total potential water
                                  3,814       6,139        8,584      11,110       13,658       43,304 ML
savings (ML)

Total potential water
                                                                                               23.7 ML/day
savings (ML/day)



20 Including water savings benefits expected to last for multiple years.
21 Projections based on average recent data
22 Projections based on average recent data
23 To be implemented in 2017-18, subject to business case/funding approval
24 Projection of savings based on 2016-17 baseline, average leak rate of rise and subject to no change in

internal policies. The savings are calculated in comparison to not implementing a leakage program. In
previous years, reporting of the leakage program included savings from a baseline as of 2002. A new
business case has been developed from 2016-17. Going forward we will be reporting against the 2016-17
baseline. Our total water savings from the program since 2002 will remain at approximately 20 billion litres
per year.
25 Projections based on average recent data




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Our WCP also includes a number of projects which we can implement if the value of water rises.
These are mature projects that have been completed or piloted during the millennium drought, and
we estimate that future investment in these projects will result in efficient water savings if dam
levels drop. These projects are listed in Table 2-3 and Section 2.3.3.

Table 2-4 Programs we will implement if the value of water rises, subject to business case/funding
approval

 Program                         Levelised Cost              Anticipated Annual Water savings (ML)

 Council partnerships                       $0.72                             210.4

 D&BCS26 Online Monitoring                  $1.29                              22.8

 D&BCS27 Efficiency Audits                  $3.50                             136.9

 Love Your Garden                          $12.45                              42.2


The full list of our ongoing programs can be found in Section 2.3.1, and their levelised costs,
assumptions and water savings are detailed in Appendix 3. This includes a range of activities that
support the development of the WCP, 2017 Metropolitan Water Plan and water conservation
projects, such as pilot trials of projects, demand analysis and research. These activities help us to
target future effort and quantify potential water savings to inform levelised cost calculations.
While there was an exhaustive assessment of projects during the millennium drought, new
technologies and drivers may change the viability of projects we have previously assessed, or
provide opportunities for new projects. These projects need to be piloted in order to determine the
true costs and benefits prior to completing the ELWC calculations. Details of these projects can be
found in Section 2.3.4.




26   Developer and Business Customer Services
27   Developer and Business Customer Services


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Our Water Conservation Plan is made up of three main elements: our water leakage, water
efficiency, and water recycling programs.
Our leakage program is the backbone of our five-year WCP. While this program is primarily
completed for the purposes of water conservation, it also has significant reputational and asset
maintenance benefits. We will adjust the scale of the leakage program annually in line with the
value of water and the ELWC methodology.
On the current value of water, the economically efficient level of water efficiency projects is limited.
However, opportunities for these projects will increase as the value of water increases.
We have not assessed our water recycling program using the ELWC methodology, nor included
water savings from our current schemes in our projected water savings for the next five years. We
consider these schemes to be past investments. While our recycled water program will continue to
save approximately 13 billion litres of water a year, the ELWC is a forward-looking methodology
and is not intended for considering current operational recycled water projects, nor water savings
from past projects.
Review of past recycling projects have generally shown that costs are greater than the value of
water. We will continue to explore new technologies and methods of making recycled water more
efficient. The 2017 Metropolitan Water Plan also acknowledged that there are currently policy,
regulatory and pricing barriers that artificially constrain the use of recycled water when determined
based on an integrated water cycle management approach. The Metropolitan Water Plan has
proposed an independent review of the barriers and enablers of recycled water and also proposed
the 3 year WaterSmart Cities program to explore opportunities for delivering drinking water,
recycled water, wastewater and stormwater services to new communities in a more integrated,
cost effective and sustainable way.
We are actively seeking opportunities to leverage the contribution that recycled water can make
within an integrated water cycle approach (for servicing growth in areas such as Greater
Parramatta to the Olympic Peninsula, and Western Sydney, for example) through better
quantifying avoided cost and externalities, seeking opportunities to leverage existing infrastructure,
and exploring new servicing approaches (such as decentralised and precinct based approaches).




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2.3 Projects in the Water Conservation Plan
2.3.1    Ongoing program
Our Water Conservation Plan includes a number of current projects that we plan to continue. This
section details these projects and their role in the plan.

WaterFix Residential
The residential Waterfix program allows customers to choose the type of plumbing service they
need to improve water efficiency in the home, providing customers with a choice of services to suit
their individual needs. This service includes replacing showerheads, toilets and taps, and repairing
leaks by a qualified plumber.
The program has been very successful since its inception in 1999. Initially offered as a subsidised
service, since 2011 we have offered the service to residential customers at cost recovery rates.
Costs to the customer vary, depending on the type of service selected. In 2016–17, the WaterFix
service offered:
     •   all types of tap and toilet leak repairs
     •   installation of WELS (Water Efficiency Labelling Scheme) 3-star showerheads
     •   installation of WELS 4-star dual flush toilets
     •   installation of WELS 3-star flow regulating aerators or WELS 4-star in-body flow regulators.
Initially the program was primarily designed to promote water efficient products in customers’
homes. However, a change in customers’ attitudes to water efficiency since the millennium drought
means that the focus of the program has shifted to a leak identification and repair service.
The size of the project every year is highly dependent on customer uptake. However, we service
around 40028 customers per year, on average. Since 2011, we have serviced over 3200
customers, and we estimate that program has saved approximately 304 million litres of water. For
the next five years, we predict that Waterfix residential will save an additional 9.729 million litres of
water every year.
These water savings are estimated to last up to 17 years after the service30. For this period of
water savings benefits, the current value of water is $1.74. Because the program is currently run at
commercial rates, the levelised cost for the residential WaterFix program is less than zero. This is
below the value of water, and therefore economically efficient.
Currently we only promote Waterfix through our website. However, because the levelised cost of
the program is well below the current value of water, in 2017-18 we will investigate whether
additional marketing sources will enable us to increase our water savings while ensuring that the
program remains economically efficient.


28 Based on average number of customers for 2013/14-2016/17
29 Based on weighted average water savings for 2011/12 to April 2016
30 Based on seven years of full water savings and a 10% annual decay in savings thereafter.




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WaterFix Strata
The WaterFix Strata program was introduced as a pilot in 2016 as an addition to the residential
WaterFix program. We identify strata buildings with high water use using a unique benchmarking
tool which provides a comparison of the water use of an apartment.
Typical water use for an efficient apartment building is 200-300 litres per bedroom per day. We
have identified that more than 20 of Sydney’s largest strata complexes have very high water use of
greater than 600 litres per bedroom per day. However, with only a single meter serving the majority
of Sydney’s residential strata buildings, the incentive for individual apartment dwellers is limited.
To incentivise this, the WaterFix strata program is based on a performance guarantee. Under this
agreement, the strata body pays no upfront costs, instead repaying costs of services with the
savings achieved by WaterFix. That is, the water bill of the account is held static until the costs of
the service are recovered; typically around three years.
The project was started as an 11-building pilot program. The first year of the pilot, 2016-17, was
successful, with significant water savings from the first building completed. We completed work in
all 154 units. Like Waterfix Residential, these water savings are expected to last for up to 17 years
after the work was completed. The ongoing pilot program aims to deliver the service to 10 Strata
buildings in the 2017-18 financial year.
This program is also run on a commercial basis, and the levelised cost is calculated to be less than
$0.00. This is below the value of water at $1.74, and therefore economically efficient. If the second
year of the pilot is also deemed successful, we anticipate that we will run this project for at least
the next five years. Based on the pilot and additional buildings that have been assessed, we
anticipate that this program will save an additional 193 million litres of water every year.




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PlumbAssist
PlumbAssist provides a proactive, tailored water efficiency service for high use customers
experiencing financial hardship. PlumbAssist is offered through our BillAssist program; customers
having difficulties paying their bills are referred to BillAssist by the Sydney Water Contact Centre or
external community service agencies. Other customers identified with high and/or long-term debt
are proactively offered assistance by our BillAssist team.
BillAssist staff offer customers case management and a range of assistance options. As part of the
assistance package, staff do an initial plumbing assessment which includes a check for high water
use or a sudden increase in use. Eligible customers with high water use or who cannot afford to fix
essential plumbing services are then referred to PlumbAssist.
PlumbAssist aims to rectify problems customers may have with:

   • high water use
   • wastewater systems
   • hot water systems.
Plumbers may also:
      •   fix tap and toilet leaks
      •   replace taps
      •   find and repair concealed leaks
      •   replace inefficient toilets
      •   replace failed hot water systems.
PlumbAssist reduces water waste and the cost of future water bills, and alleviates financial stress
for vulnerable customer groups. Since starting in 2011, 1404 customers have had a plumbing
issue resolved through the PlumbAssist service.
The range of services offered is similar to WaterFix, but the standard of plumbing fixtures prior to
our visits is typically very poor meaning the potential for greater savings and costs per fitting
installed is higher.
PlumbAssist is a carefully targeted service for the most vulnerable households so it is difficult to
predict customer uptake. However, on average, 170 customers per year will have an issue
resolved through PlumbAssist31. Savings also vary significantly from house to house due to the
variety of plumbing issues repaired through the program. We estimate that this program has saved
over 501 million litres so far, and will continue for at least another five years, with anticipated
annual water savings of 21.2 million litres per year. Like the Waterfix programs, water savings are
estimated to last up to 17 years after the appointment.
The PlumbAssist program has a levelised cost of $3.38. While this is above the value of water,
which is $1.74 for a program with water-saving benefits of up to 17 years, this program is run
primarily as a social program to help customers in hardship. Social benefits of the program include
alleviating financial stress and ensuring that vulnerable customers have access to basic amenities.



31   Based on average numbers from 2013/14 to 2016/17


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These benefits are not easy to quantify; externalities have therefore not been reflected in the
calculation of the levelised cost.
However, our three residential water efficiency programs all offer similar services, and share
program management resources. When considering the total costs and water savings of
PlumbAssist and Waterfix Residential and Strata, the total levelised cost of the combined water
efficiency program is approximately $0.06. As a total program, this is below the value of water at
$1.74.




Figure 2-3 We work with our partners to enable water sensitive cities of the future




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Education Initiatives
We invest in and support education programs that promote water efficiency – with a broader focus
on the urban water cycle. Initiatives are guided by the Sydney Water Education Plan 2012–16.
This Plan will be updated in 2017-18.
We run educational tours at seven operational sites, which include water filtration, water recycling
and wastewater treatment plants and an advanced water recycling plant. We also have a specially
designed Water Recycling Education Centre at St Marys.
Our tours promote responsible water use and efficiency and we engage with people from
secondary schools, TAFE colleges, universities, technical and international delegations, and other
key stakeholders.
Every year, approximately 4,000 people participate in a treatment plant tour and presentation.
About 2,000 people per year also visit the Water Recycling Education Centre to learn about
recycling, sustainable water management and water recycling treatment technology and
innovation.




Figure 2-4 Students on a tour of the water recycling plant and education facility at St Marys




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Regulatory measures
Two external regulatory measures, implemented during the millennium drought, remain in place:
the Water Efficient Labelling and Standards (WELS) scheme and the Building Sustainability Index
(BASIX). Both measures continue to improve the water efficiency of homes.
BASIX is a state-wide planning policy that sets water use and greenhouse emission targets for
residential dwellings. BASIX aims to reduce the volume of drinking water used and greenhouse
gas emissions produced by new dwellings and existing dwellings with extensions and alternations.
WELS is a national scheme that involves mandatory water efficiency rating and labelling for a
range of appliances and fittings. It also sets minimum water efficiency standards for some
appliances, such as washing machines. Sydney Water worked closely with regulatory bodies
during the millennium drought (2003-2009) to implement this legislation.




Figure 2-5 Our network technicians assess reports of leaks and breaks and prioritise jobs to
ensure we respond with the appropriate resources




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Leakage management
Sydney Water owns and maintains about 25,000 km of pipes that deliver water to customers. We
also maintain the connections to customer properties.
All pipe networks are vulnerable to leaks and breaks. Water mains leak or break for a number of
reasons and age is usually not the determining factor. Many things can cause leaks, such as:

      •    deteriorating joints and fittings
      •    ground movement cracking pipes
      •    changes in water pressure
      •    changes in rainfall and temperature.
Sydney Water implements a number of programs to reduce the likelihood of leaks and the amount
of water lost when they happen. These programs include:
      •    Active leak detection and repair.
      •    Pressure management.
      •    Optimised response times to repair leaks and breaks.
      •    Improved flow metering.
Leakage programs are justified and implemented based on the Economic Level of Leakage (ELL).
The ELL aims to achieve a balance between keeping costs low for customers and reducing
leakage levels. The ELL methodology is consistent with the ELWC methodology. However, while
the ELL reflects the level of leakage from the system at the point where the cost of leak reduction
activities equals the savings from reduced leakage, the ELWC methodology is used to determine
the investment and volume of water savings (from a baseline level of leakage) that is economically
efficient.
We will update the forward-looking ELL on an annual basis in line with the value of water and the
ELWC methodology. An explanation of the ELL methodology can be found in Appendix 6. The ELL
for the 2017-18 period is estimated to be 108 ±1632 ML/day.
The leakage program is also supported by our ongoing Pipe Renewal Program as part of our asset
maintenance program. By replacing pipes that have reached the end of their life, this program aims
to minimise leaks and breaks. Research is also being done on whether leaks lead to pipe breaks. If
there is evidence to support this hypothesis, this research will inform the leakage program’s size
and scope by allowing us to calculate the avoided costs of addressing leaks before they turn into
breaks. Sydney Water has reduced breaks by 50% over the last 10 years.
We monitor leakage on a quarterly basis and adjust our programs in response to these results.
When we increase the amount of active leak detection in response to increased leakage there can
be a delay of several months before there is a noticeable effect. Over the last four years we have
aimed to manage to our target and provide value to customers.




32   In line with the uncertainty band.


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The active leak detection and response is a short-term program of less than five years, as the
water savings achieved by active leak control would continue for a period after the program was
stopped, but the savings will decay over time as new leaks emerge (or re-emerge).
Approval for a five-year business case for the active leak detection program is underway. Based
on the ELWC methodology, and the corresponding short-run value of water at the time ($0.56 a
kilolitre), the efficient level of investment in reducing leaks was around $1.7 million a year. This is
equivalent to water savings of around 9.8 ML a day, and a levelised cost of around $0.30 a kilolitre.




Figure 2-6 To inspect for hidden leaks Sydney Water uses acoustic devices that pick up the noise
water makes as it leaks from a pipe


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Water Recycling
Our water recycling program aims to reuse water, whether it be wastewater or stormwater. These
projects can range from large scale wastewater recycling, to sewer mining to stormwater
harvesting. These projects are considered to be water conservation projects when they reduce
demand on our surface water systems.
Recycled water can be used to:
   •   water gardens, golf courses and parks
   •   flush toilets
   •   wash cars
   •   fight fires.
It can also be used for some industrial purposes and to supplement river flow in the Hawkesbury-
Nepean River.
We currently operate 23 recycled water schemes, including 15 irrigation schemes. However, we
also provide recycled water for use at our own wastewater treatment plants.
Our recycled water schemes currently produce approximately 42 billion litres a year. We calculate
our water savings based on whether potable water would have been used for the intended
purpose. This is approximately 13 billion litres annually. Details on our recycled water savings in
2016-17 can be found in Section 4.4.
The ELWC is a forward-looking methodology. In future, we will proactively evaluate recycled water
opportunities as part of an integrated water cycle management approach when planning recycled
water services on our own sites, as well as recycled water services for customers. This approach
is consistent with the concept of “one water” where we holistically consider all sources and end
uses for water, and the benefits and costs of managing water, energy, and nutrients. Such an
approach will ensure that we use the right water, of the right quality for the right purpose.
Recycled water will be provided when:
   -   it is economically efficient to do so,
   -   it is in the interests of customers
   -   Sydney Water can recover its capital and operating costs.
In line with the ELWC methodology, assessments of economic efficiency can include avoided
costs in water security and supply, wastewater transfer and treatment, nutrient management and
other externalities where they can be adequately quantified. We will explore how our water
servicing solutions can provide wider economic benefit and how this may be harnessed.
We know that when we are not in drought surface water is a lower cost and lower energy intensity
source of water, so planning for recycled water schemes will account for the variation in the need
for, and value of, recycled water as a substitute for potable water. However, other benefits of
recycled water such as reduced nutrient and flow impacts may be sustained on an ongoing basis.




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We will continue to explore new technologies and methods of making recycled water more
efficient. Currently there are policy, regulatory and pricing barriers that artificially constrain the use
of recycled water when determined based on an integrated water cycle management approach.
The 2017 Metropolitan Water Plan proposed an independent review of the barriers and enablers of
recycled water and also proposed the three-year WaterSmart Cities program to explore
opportunities for delivering drinking water, recycled water, wastewater and stormwater services to
new communities in a more integrated, cost effective and sustainable way.
We are actively seeking opportunities to leverage the contribution that recycled water can make
within an integrated water cycle approach (for servicing growth in areas such as Greater
Parramatta to the Olympic Peninsula, and Western Sydney) through better quantifying avoided
cost and externalities, seeking opportunities to leverage existing infrastructure, and exploring new
servicing approaches (such as decentralised and precinct based approaches).




Figure 2-7 - Saw tooth weir on the tertiary clarifier at the Rouse Hill Water Recycling Plant




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Sewer mining
Sewer mining, a specific form of recycling, is the process of tapping into a wastewater system,
(either before or after the wastewater treatment plant), and extracting wastewater, which is then
treated on-site and used as recycled water.
There are currently eight sewer mining schemes operating in Sydney Water’s area of operations.
These schemes are owned and operated by organisations including councils, golf clubs and
commercial building owners.
We support the provision of recycling by sewer mining projects in accordance with our sewer
mining policy. Our objectives are to:

   •   facilitate sewer mining by providing timely information, advice and responses to sewer
       mining enquiries and applications

   •   encourage improved water efficiency and sewage management outcomes
   •   ensure the operation of the sewerage system is not compromised
   •   ensure that the extraction and use of sewage for sewer mining only exposes Sydney Water
       to business or legal risks that can be managed.

Private onsite reuse schemes
There are currently eight private onsite reuse schemes currently in operation. Recycled water is
produced by capturing, treating and re-using wastewater from a site’s buildings or facilities. This
includes Sydney Water’s head office building at 1 Smith Street, Parramatta. Recycled water
volumes from these schemes are not reported to Sydney Water.

Stormwater Harvesting
Stormwater harvesting involves collecting, storing and treating stormwater from urban areas, which
can be used as recycled water. The stormwater is collected from stormwater drains or creeks,
rather than roofs. Recycled water is treated so it’s safe to use. Recycled water produced from
stormwater harvesting can be used to provide water for public parks, gardens, sports fields, toilet
blocks and golf courses.
Typically, stormwater is under the domain of local councils. However, we may work with them to
improve the health of our waterways, provide opportunities for stormwater re-use and/or protect
people and properties from flooding.




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Figure 2-8 Kiama Golf Club uses recycled water for irrigation




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Current research and development activities
We are currently undertaking a number of research projects which will feed directly into water
efficiency projects or inform related strategy. Most of our research into water efficiency and water
conservation build on our relationships with key universities and institutions.
Leak detection trials
We are always investigating and scanning the market for new technologies which will can improve
the way we operate. Currently we are undertaking two leak detection technology trials: TaKaDu
and Utilis.
Takadu is a "software as a service" solution which continuously monitors flow, pressure and other
available network data to identify deviations from normal pattern for the early detection of leaks
and other system anomalies.
We initiated a trial of TaKaDu in 2015. The trial has been extended for another 12 months, with a
reduced scope. Verification of TaKaDu events against reported breaks and leaks will no longer
continue, as this has been adequately tested. Results from TaKaDu will be compared against
similar products Innoyvse (IWLive) and Aquis which are also being trialled by Sydney Water in
2017 (Jun-Dec).
Utilis analyses satellite imagery to identify water below ground level that matches a certain
chemical signature typical of drinking water. It identifies potential leaks taking images covering
hundreds of square kilometres at once. This raw imagery is then overlaid on GIS systems including
street locations. Based on suggested locations, only a few leaks were found, so there was
insufficient evidence to prove there was a significant benefit with the detection method. Sydney
Water experienced some issues that delayed the start of the trial, and as a result the trial was
ceased at 50% completion.




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End use study: Understanding how customers use water at home
The end use study will develop Sydney-specific detailed estimates of how customers use water for
specific purposes, such as showering, toilet flushing and clothes washing. The project was started
in 2017 and will continue into 2018.
This large-scale project involves installing special high resolution, high frequency meters on over
400 properties to collect water consumption data that will be broken down into various end use
parameters. This metering project will be supported by a customer survey providing information on
the types and efficiency of water using appliances present and other factors that influence their
water use.
Information collected from this project will help inform future water conservation projects and
forecasting future water demand.




Figure 2-9 Keep a jug of cold drinking water in the fridge




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