Cost-benefit analysis – leakage reduction by rehabilitating old water pipelines: Case study of Oslo (Norway)

Abstract

Water saving is not just the responsibility of the consumer. While demand-side management prescribes several good practices for water-consumers, the supplier also understands that leakage reduction on its part is a more effective mode of saving large quantities of water, by having to abstract, treat and supply less. It is not just water which is saved, but money spent on chemicals and energy expended on treatment and pumping. The economic aspect apart, this also means that there are possibilities of significant reductions of environmental impacts upstream in the chemicals production and energy generation processes. However, it is not an easy task to perform a comprehensive cost-benefit analysis, by taking into account all the direct and indirect costs and benefits. Benefits besides are not just multi-pronged but also distributed over time. In this paper, the author compares the direct costs incurred in rehabilitating old water pipelines in Oslo, with the direct benefits of leakage reduction which accrue therefrom, for the period 2011-2020. Avoided greenhouse gas emissions by virtue of savings in energy and chemicals are compared with the greenhouse gas emissions which occur due to the rehabilitation operations. It is seen that it often becomes difficult to justify rehabilitation economically, if the direct and indirect monetary benefits in addition those accruing from leakage reduction alone are not taken into consideration. Interestingly, the net savings in GHG emissions are significant, even over the 10-year study period.

Cost-Benefit Analysis and Uncertainty Analysis of Water Loss Reduction Measures: Case Study of the Gothenburg Drinking Water Distribution System

“…This finding supports the conclusion of Venkatesh (2012); that even in a system with high leakage rates, repairing broken pipes is more effective than a high replacement rate. The results in Gothenburg were also in line with Sánchez et al (2005) and van der Kleij and Stephenson (2002), who found that having more personnel using traditional methods for leakage detection was more beneficial than installing permanent acoustic loggers.…”

“…when the number of burst pipes exceeded 2 per km per year, considering only direct costs. In Oslo, Venkatesh (2012) performed a CBA case study where the cost of pipe replacement was much higher than the benefits associated with the reduction in leakage; however, this CBA covered only a short period of time; 10 years, and although extending the time period ought to narrow the gap, this would not be enough to justify pipe replacement for the purpose of leakage reduction alone. None of the case studies mentioned took into account health effects due to pipe failure repairs, nor were environmental effects included as costs.…”

A critique of the European Green City Index

“…A low willingness to pay for improvement in environmental performance is clearly a conflict between the environmental goals and the socio-economic ones. However, a controlled reduction of excessive operating pressures in water systems results in a reduction of the volume of leakage and the frequency of burst pipes (Johnson 2012, Venkatesh 2012. If pressure management is adopted as a strategy to reduce water leakages, the need to hike the water/sewage fees would not arise.…”

The Innovation Deficit in Urban Water: The Need for an Integrated Perspective on Institutions, Organizations, and Technology

“…Short-term infrastructure costs to municipalities thus need to be balanced with long-term public good benefits from decreased water withdrawals. Similarly, reductions in imported water, cost savings from lowering pumping costs, reductions in carbon intensity of water systems, and other benefits often accrue to the water provider in response to conservation, but may be hard to measure and credit (Venkatesh, 2012). Aligning incentives properly at different scales is an ongoing challenge for technocratic, deliberative, participatory, collaborative, and market-based methods.…”