Thinking Out Loud About The Return on Investment of Water Infrastructure Monitoring: Post Number 1

June 7, 2010 at 8:43 am 2 comments

We’re about to begin a series of posts about quantifying and measuring the return on investment of water infrastructure monitoring. Admittedly, our discussion may focus more on the water loss prevention side rather than the less quantifiable aspects of water infrastructure monitoring. This doesn’t mean that the less-quantifiable parts are not important. The more we talk to water utilities the more justified we are in our hunch that the less quantifiable benefits matter much more.

We think it’s a worthwhile discussion. Utilities should make choices that make sense. If the pipe replacement era is indeed upon us, with a large investment requirement, we better make sure that all investments are justified; even software investments. For instance, take a look at the plans Thames Water has to invest in infrastructure in the coming years to serve what it calls “water-stressed London” and replace victorian-era pipes.

What’s more, since water cost and availablity vary considerably across the globe, as do regulatory requirements and pipe infrastructure, the cost of water loss varies in the same way.

The common way of justifying return on investment is to break the return into value points: for instance, most utilities that choose Water Infrastructure Monitoring use it to address water leaks, in the belief these will pre-empt future bursts. If we can determine the monetary value of a leak or a burst – and we can – we can then calculate how much money was saved by avoiding leaks, detecting them and fixing them. If we could estimate how many leaks occur per pipe kilometer per year, we would have a good estimate of how much money and water will be saved in a year.

Nevertheless, it is important to remember that even if we list all the use-cases in which Water Infrastructure Monitoring is useful to the water utility, the new level of network visibility that is created is not measureable. The main value is that Water Infrastructure Monitoring lets water utility executives and operators see things that they could not see before and reduce costs associated with water production across the board. Less water lost means less water produced, which in turn means lower maintenance, energy, plant and personnel costs. It also saves the investments required to grow water production for growing cities and industry.

We’ll begin by listing some of the cases where the ROI is obvious:

  • Leak Detection: cases where there are invisible leaks in the network.
  • Burst Prevention: The ability to prevent bursts that are a result of underlying leaks and deterioration.
  • Burst Asset Allocation: In cases of bursts, the ability to indicate the likely pipe related to the burst when several pipes are in a certain location.
  • Abnormal Consumption: where such consumption has theft, faulty meters or leaks as the underlying cause.
  • Quality Issues: dealing with too-often quality notifications coming  from fixes, know issues or faulty quality sensors.
  • Operations Issues: faulty meters and plant that create excessive pumping, over or under filling of reservoirs and other measurement issues.
  • Blind Spot Coverage: cases where water mains and rural networks are not monitored by analytics staff, creating a risk of large leaks and even bursts that go unnoticed.

In our next post we’ll talk about how the measure the ROI of these items (energy, labor costs and damages play a large role, not just water cost), and also how to quantify the benefits of early detection of smaller leaks.

Hope you’ll join our discussion. Comments anyone?


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2 Comments Add your own

  • 1. Jenny  |  June 7, 2010 at 12:08 pm

    Nice post, water infrastructure is more important than most people think. There are so many third world countries which need fresh water but have no infrastructure present for facilitating its delivery.

    • 2. TaKaDu  |  June 17, 2010 at 8:11 am

      Thanks, Jenny. Unfortunately this situation will just get more accute with time. We see Water Infrastructure Monitoring as a key building block in the next generation of water infrastructure, which will allow cheaper and more efficient delivery of water to more people.


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