Rick Nicholson, Group Vice President at IDC Energy Insights: "Adoption rates for smart water network management solutions will outpace growth rates for smart water metering"
We are happy to host Rick Nicholson, Group Vice President of IDC Energy Insights, a SWAN member who has recently published a paper titled 'Business Strategy: Smart Water Market Overview'. With co-authors Dean Chuang, Daniella Muallem and Marcus Torchia, Mr. Nicholson took a case-study approach to looking at some of the recent developments in the smart water market. In addition to current state of the market, the report highlights key trends and predictions for this emerging market segment.
Q: IDC has recently published its smart water market overview. Can you share with us some of the key conclusions and takeaways of your work?
A: The threat of water scarcity or shortages and the need to manage aging infrastructure are driving water utilities and other organizations responsible for water supply to consider smart technology–based solutions to reduce water losses and enable water conservation. However, current deployment rates of these solutions are low because of a lack of understanding regarding the business case for investment, few successful case study examples, issues with technology availability and maturity, and the fragmented nature of the water utility market. Water utilities considering whether or not to invest in smart water solutions must understand the current and projected capabilities of, the potential benefits and risks associated with, and the experiences of other utilities in deploying these smart water solutions.
IDC Energy Insights believes that:
The growth rates for smart water metering will be slower than the growth rates experienced with smart metering for electricity, at least in the North American and European regions. Smart metering deployments by electric utilities were strongly driven by regulatory or policy mandates and, at least in the United States, by government stimulus funding. Assuming that similar mandates and stimulus funding will not impact the smart water market, growth rates will be driven primarily by business needs, especially by water conservation and leak detection on the customer side of the meter.
Adoption rates for smart water network management solutions will outpace growth rates for smart water metering. The business case for smart water network management solutions is more straightforward since it does not rely upon changes in consumer behavior — just the achievement of loss reduction and energy saving targets. Smart water network management solutions also typically have lower capital costs since they do not require the replacement or retrofitting of all customer meters.
Q: Did you identify any uniformity between the approaches taken by utilities, or are projects still very ‘unique’ and different one from another?
A: There are emerging similarities based on both the type of solution and the business case. For example, there are
similarities among the various smart water metering projects in that they typically include:
● Two-way communications to the meter, typically over a fixed wireless network
● Collection of interval usage data (typically hourly)
● On-demand meter reads
● Meter data management including automated validation, editing, and estimation (VEE) and calculation of billing
● Analytics that can be applied to usage and event data as well as other external data such as weather
● Integration with other utility IT systems such as customer care and billing
There are also similarities among the smart water network management projects in that they typically
● Smart water meters at the district, zone, and point-of-production levels
● Sensors (e.g., pressure, flow, noise) along transmission and distribution mains
● Fixed communications networks connecting meters and sensors
● Hydraulic models that simulate the dynamics of the network including pipes, pumps, valves, and storage to facilitate system optimization
● Analytics that can detect and locate leaks and bursts or provide visibility into other network and equipment anomalies
● Intelligent pressure management applications to self-calibrate and automate pressure optimization
● Integration to SCADA, enterprise asset management (EAM), geographic information system (GIS), mobile workforce management, and other systems
Q: Do you think smart water technologies have ‘crossed the chasm’, or are we still in early adoption phase? What are the key elements that would help the industry move to the next phase?
A: The smart water market is still in an early stage characterized by high levels of interest, low deployment rates, and a certain amount of hype. However, lessons from the development of the smart grid market can be applied to the smart water market to inform its future outlook.
Q: Are there still gaps between what utilities need and what current technologies are providing? Where do you see the biggest opportunities for technology and solution providers?
A: Opportunities start with challenges. Water utilities considering investments in smart water solutions face a number of challenges. First, and in many cases foremost, water utilities are facing large capital requirements for the replacement of aging infrastructure. It is not uncommon for utilities to view capital requirements for infrastructure replacement and smart water solutions as competing with each other. When that is the case, the capital requirements for infrastructure replacement typically "win" the battle for funding. To complicate matters, unlike the capital costs for a new water treatment plant or storage facility, which are incurred for a short duration and then are not faced again for many years, the capital requirements for infrastructure replacement are spread over decades, forcing a "pay as you go" approach that makes this competition for funding a continuous rather than a one-time challenge. However, utilities should take into consideration that smart water solutions such as pressure management can actually help extend the life of existing assets, thus deferring some of the capital requirements for replacement. Additionally, smart water solutions focused on leak detection can help prioritize infrastructure replacement plans, thus improving the overall business case.
Finn Asmussen, Technology and Innovation manager, Copenhagen Water (KE): "Our goal is to lift digitization and standardization to a higher level"
Finn Asmussen, Technology and Innovation Manager at Copenhagen Water (KE), was a key contributor to this year’s SWAN Conference. Finn represented not only the water utility but also DANVA, the Danish water companies association. We are happy to host Finn for this month’s member interview at an interesting timing – in a few weeks, KE will be merging with a few other utilities in the Copenhagen area and rebranding as a regional water utility.
Q: Could you tell us a little bit about your role in KE, and what kinds of initiatives and projects are you responsible for?
A: In the KE organisation, I am today responsible for development of some of the big IT systems like GIS and SCADA. As you know, KE is merging with other companies and a new organisation will be formed on July 1st, 2012. My role will not change much, but technology will be lifted to a higher level and the responsibility of the new Technology department might extend.
Some of the projects / Initiatives I have been responsible for:
- Introducing a new SCADA system – our old system could not be maintained anymore (was based on OS/2 !)
- In connection with the new SCADA, a TAG numbering system was introduced, based on IEC 81346
- Project "One GIS system in Water and Wastewater" - in the past we used to have several types of GIS systems in KE, for Water and Wastewater – this project consolidated all GIS systems into a central one.
- Project manager of a pre-project leading to establishing DDV in the Danish Water and Wastewater Association.
Q: Speaking of DDV, in the SWAN 2012 conference you told the forum about this unique ‘digital water company’ initiative you are involved in. What would you define as the main goal for DDV, and how does DANVA intend to achieve it?
A: The main goal of DDV is to lift digitization and standardization to a higher level within the Water and Waste Water sectors.
The way to achieve it is to create a co-operation between Water companies, suppliers and consultants under the umbrella of the Danish Water and Wastewater Association, where different relevant projects will be carried out by enthusiastic people. DDV is known as the single contact point in the Water and Wastewater segment in Denmark regarding Digitization and Standardization.
Q: The sharing of data is a key element in building a smart water network. Are there any lessons learnt from your experience in Denmark that could be useful for other countries or the industry as a whole?
A: I think it is not easy to take the lessons learnt in Denmark and make them useful in many of the high developed countries, where there are only few big water companies. I could see more use in less- developed countries, which are about to start up digitizing their water pipes. The DANVA models and defined terminology could give them a basis for digitizing the pipes in a structured way, so they would not have to start from scratch.
Q: Finally, what were your main impressions from the SWAN 2012 conference?
A: The SWAN conference was very interesting, and I did meet some nice and exciting people. There was a significant focus on leakage, which I guess is a big problem in many countries. In Denmark we have an average leakage of 5% - 8%, which is much less than in other countries, therefore leakage does not get the center of attention. Our main interest lies in the standardization of data, building a common terminology, and describing the main business processes.
Bear in mind that our need is driven by fragmentation - there are many water companies in our small country, and each of them is doing things in their own way. In the future, through consolidation, there will be a smaller number of water companies, and the merging of water companies will be much more efficient
if they have standardized data, KE strongly supports such standardization of data, and one good reason is, that it will make future mergers of water companies much easier and more efficient.
I was happy that the conference dedicated a session to this topic.
Dr. Mark LeChevallier, American Water: "Looking at untapped data and adapting to the behaviors or needs of the customers - that’s our vision for the future"
A true expert on water technology and champion of innovation, Dr. LeChevallier was announced by the AWWA as the recipient of the 2012 Abel Wolman Award of Excellence. Dr. LeChevallier joined American Water in 1985, and in his current role he serves as the Director of Innovation & Environmental Stewardship. In this role, he directs the research and environmental compliance programs, including the development of environmental management plans for more than 1,000 operating centers, environmental audits to ensure compliance, development of a national cross connection control program, and implementation of environmental stewardship and greenhouse gas control programs. He also leads the company’s Innovation Development Process (IDP), which tests and develops new technologies and processes for use in the company and the water industry.
Q: American Water is one of the largest water companies in the world. Can you give us a sense of the size and scope of your activities?
A: “American Water serves 15 million people in 30 states and parts of Canada, though about 400 owned and operated drinking water utilities and roughly 300 waste-water networks – regulated and non-regulated. Clean water accounts for 85% of American Water’s Revenues, but growth drivers can be found in the additional activities such as reuse, bioenergy, and desalination.”
Q: What are the main challenges faced by American Water, and what role do you see data-driven technologies playing in helping you address them?
A: “The list of challenges is long… I would mention the price of water and the need to invest in infrastructure. Our future investment can’t continue to come from rate increases. We have actually been involved in quite a few rate cases, all of this in an economic downturn. This is no longer sustainable. We need to focus on operational efficiencies so we can continue to improve without raising rates. Delivering capital more efficiently, mainly through pipeline replacement; and operating efficiently (optimized use of power and chemicals, tighter management of leakage and water loss). We have a large IT program focused on improving business processes, rolling out SAP and driving back-office efficiency.
On the asset management side, we have six different streams of information: Procure To Pay (PTP), Hire To Retire (HTR), Record To Report (RTR), Request to Completion (RTC), Customer Information System (CIS) and Enterprise Asset Management (EAM).
All in all, we are not as efficient as we should or could be. We also consider the strategy around condition assessment to be a key element in our activity."
Q: Does American Water have a smart water network strategy? What are the main goals or targets?
A: "We started in 2005 with linking AMR and acoustic monitoring; we set on a vision of looking to provide networks of information. From a pilot rolled out in four states – California, Pennsylvania, West Virginia and New Jersey, we now embarked on a strategic move looking at 8 states (and eventually all 30 states we are in), around accelerating AMR rollout, and using AMI where appropriate. This is augmented by acoustic monitoring. Naturally this is related to water prices. We are improving our ability to measure and report about consumption in different points in the network. We are also in a process of looking into another innovation that will further enhance our ability to use meter data, including our Backflow meters and stop meters."
"There's a lot more that the industry - and we - can do. For example, about 2% of our meters showed evidence of backflow every month. Pressure was highly variable due to lack of pressure management in our distribution systems. In general we have few pressure monitors but many meters. We can leverage the data we do have to get a better grasp of things that are not directly measured."
Q: How do you measure success of this strategy?
A: “Non-Revenue Water is the obvious measure of success; we are gradually moving to ‘total water accounting’ and water audits, but most of the utilities are not fluent in this dialogue yet. The ultimate goal is reduce total volume of water. In places where these new practices have been implemented we are seeing good results.”
Q: There’s a lot of talk about smart water grids – do you relate to the analogy to the electrical grid? Can a water network be managed and controlled in a similar fashion?
A: “Analogies are not very helpful - but that said, one of our innovative solutions together with ENABLA, now being rolled out in 8 other systems –is about the smart electric grid and the smart water grid practically becoming interconnected. We are also looking at ways to make more of the meter data we have. We have a lot of information on how our customers consume our product, and we do very little with it, as is the case with most water utilities. Consumer goods players such as P&G have a very elaborate customer profile. They spend time talking about their customer. We have a lot of information on consumption patterns which we don't look at all. Looking at actual consumption and adapting to the behaviors or needs of the customers – that’s our vision for the future.”
Wils Theagene, Smart Cleantech Partners: "We bridge the gap between emerging water companies and strategic investors"
Wils Theagene of Smart Cleantech Partners was another North American SWAN member to make it to the WWIS conference. We sat down with Wils to hear about his acitivies.
Q: As one of newer SWAN members, can you share with us the unique aspects of your activity in the smart water realm and beyond?
A: "First let me tell you that we are simply thrilled to now be part of SWAN. We are delighted to see such dynamism among industry leaders and are looking forward to contribute to the advancement of smart water networks. Smart Cleantech Partners aims to provide M&A advisory services that go beyond the traditional approach. Our mission is to leverage our domain expertise and solid network to help water companies unlock their full potential and maximize their value. We bridge the gap between emerging water companies and strategic investors using language and actions compatible with their respective cultures and environments. Take a look at our team of strategic advisors… extensive experience with strategic investors and with emerging water companies."
Q: You recently hosted “Canadian Cleantech Investor Day” – an event designed for emerging Canadian cleantech companies. Can you share some of the day’s highlights?
A: "It was a great success! As you know this was the event’s first edition but we really exceeded the initial
expectations. The objective of Canadian Cleantech Investor Day was to introduce selected Canadian Cleantech companies to US investors. The Canadian consulate in Boston joined forces with us and we had 55 participants at the event including some of the leading investors in Cleantech and Water such as GE financial services, Siemens Venture Capital and Rockport Capital. We have received very positive feedback and this is something we plan to repeat in a near future. We invite you to take a peek at the event’s presentations and videos that will be posted on our web site during the week of March 5th".
Q: Your firm is operating both in Canada and in west-coast US. Is there a difference between Canada and other countries in terms of funding activity?
A: "At the moment Cleantech funding is a demanding task for most companies across all geographies; Canada, US or Europe. Investors are looking for capital efficient companies with a strong value proposition. But in spite of the difficult market conditions, companies offering solutions centered on one or more of the following aspects; data monitoring, analysis, control, infrastructure optimization and communication networks, are still able to entice
“strategics” and land significant investments."
Q: Do you see any financing or M&A activity in the smart water space? What is your outlook for investments in this emerging category?
A: "The M&A activity in the water and smart water sector is following what we experienced for the smart grid market 3 years ago. Since the melt down of financial markets and the reduction of corporate overhead, large corporate are looking for acquisition targets to grow their businesses. And what they are looking for is a proven recipe… A compelling value proposition, innovative technologies and a talented management team."
"The outlook for investment in Smart Water is very positive. Everyone in the industry agrees there is water crisis in the making so the value of water can only go but up. Smart water investments are more capital efficient than traditional technologies and have the potential to find their way to the market faster. When you have influential water people like Piers Clark, commercial director of Thames Water, saying at the Global water tech summitt "We have great companies in Smart Water such as Syrinix and TaKaDu", you know that Smart water is on the radar screen of many market leaders."
Q: Do you envision 'non-traditional' players being active in the acquisition side?
A: "On the one side Cleantech companies are covering a very wide spectrum of industries and solutions. On the other, Smart Cleantech is already somewhat non-traditional for the bulk of the industries where cleantech is most active. We already see a number of non-traditional players seeking investment or acquisition opportunities in water and smart water. Therefore we make a point to keep our minds open so we can bridge the gap between our customers and a maximum of potential investors/acquirers."
"Finding a traditional can be more straightforward, like when we were involved in the acquisition of Pathogen Detection Systems (PDS) by Veolia Water. PDS had developed a novel technology for detecting bacteria in water and Veolia Water wanted to use PDS to built a global sensor platform dedicated to delivering sustainable safe water integrity."
"A good example of a non-traditional player we experienced was the acquisition of UIT (Underground Imaging Technology) by Caterpillar. UIT developed a novel solution based on a hardware and software systems for mapping and investigating underground infrastructure such as water or gas pipelines. In this case Caterpillar was seeking a for bolt-on acquisition that demonstrated a compelling value proposition."
Kris Holla, Talis: "Innovative utility companies that adopt modern technology and smart products will have competitive advantage compared to legacy companies"
As part of our monthly interview series with market leaders, we were pleased to have had the opportunity of speaking with SWAN Platinum member, Kris Holla, Chief Sales Officer of TALIS. Kris is responsible for worldwide sales and marketing activities of TALIS. Kris Holla is a well-regarded Senior Executive/Officer and has more than 25 years of experience in international sales and marketing. Until recently, he was president and CEO of NxGen modular, a leading provider of modular mission critical buildings and assemblies. Prior, he served as Executive Vice President and CSO at a number of different companies, including Emerson Network Power, APW and ELMA Electronics Inc. Kris studied mechanical engineering in India and holds a master’s degree in industrial engineering from Oregon State University and an Executive MBA (AEA) from Stanford University in California.
Q. Over the past year TALIS has been active in acquiring technology companies worldwide. Can you share with us your strategy and plans?
A. "TALIS produces a wide range of products and applications for drinking water and irrigation all the way to sewage and waste water treatment. This gives us a clear competitive advantage. We want to leverage this to consolidate our position as leaders in the international water market. We are constantly looking to complete our offering for the entire global water market. Our goal is to become the preferred supplier of water infrastructure products and solutions with a single point of contact. "
Q. TALIS is well known for its valves, but not necessarily for ‘smart’ solutions. Can you share with us your activities in the ‘higher’ layers of the smart water network?
A. "It’s true that we are well known for our valves. We recognise that the market has started looking for "smarter” solutions. TALIS has some of the best brands in the industry such as Bayard, Erhard and Raphael. Bayard as an example is working on next generation smart control valves that can remotely manage pressure and increase efficiency of pumps and other equipment in the network. In addition, we are working on solutions for our butterfly and needle valves to better manage pressure and reduce leakage thereby saving water. To make this all “smart”, TALIS has taken the steps toward combining electronics and communication technology with valves in many of our products and we expect a rapid expansion of this group of products."
Q. Your ‘classic’ market is considered slow and conservative – do you see signs for a change in pace or willingness to innovate on part of utilities?
A. "Utilities today are facing many challenges. The ongoing increase in energy prices and raise in loss of water through leakages well as continuously increasing network operation cost and maintenance cost, the focus for utilities to adopt new technologies is growing. In addition, we believe that utilities will be forced to achieve operational excellence by designing a network that is safer, smarter, optimized with minimum leakage and achieving energy efficiency. Innovative utility companies that adopt modern technology and smart products will be able to offer new services, new revenue models and have competitive advantage compared to legacy companies.
Q. Are there any significant differences between different territories when it comes to technology adoption? Where do you see the biggest change?
A. The obvious difference is between emerging countries that provide significant resources to deploy and where urbanization is happening rapidly. For these brand new installations, latest technologies that are highly efficient, intelligent and optimised are the first choice. For example, China is deploying the latest desalinization technologies, water infrastructure and transmission projects, whereas in developed countries, such as those in Europe, customers are looking at how to easily retrofit old technologies with minimal cost. A major area of change also is in the irrigation market. Over 80% of irrigated areas are using very inefficient methods such as flooding. The trend is to go into highly efficient systems such as sprinkler and drip irrigation with smarter networks."
Q. Kris, you are a fairly new entrant into the water space. Can you share with us some early observations on the water industry in comparison with other industries you worked in?
A. "I have spent a lot of time in the technology industry such as IT-infrastructure, datacenter and telecom. The first thing that struck me is how precious water is and its shortage is a growing problem not only in developing countries but also in developed ones. Another surprise is that actually only 1% of the world’s water is available for drinking, thereof 70% is used for agriculture and 20% in industries. It is also depressing, that still over 1 billion people have no access to drinking water and even more to proper sanitation."
"Often the culprit overexploitation combined with leakage, lack of pressure management, and highly inefficient or even non-existing networks. Another important difference compared to the technology industry is that it is slow to change and adapt. However, I notice that currently the water industry is beginning to change similar to how the IT industry evolved in the last 10 years by focusing on energy efficiency and bringing costs down. My vision is that every water network becomes safer, more efficient, and optimised with use of TALIS products, technology and solutions."
Oliver Grievson, Anglian Water: "In order to get the benefits of the more advanced potential for process automation & control, most water companies have a long, long journey ahead"
One of the most active figures in the 'smart water networks' scene is Oliver Grievson from Anglian Water. Oliver has had a colorful career having worked in several UK and global leaders in the water industry. In his current position at Anglian Water, Oliver leads the company's flow compliance and regulatory efficiency activities. Through his work in Anglian Water and his activities in the WIPAC group on linked in, Oliver demonstrates how the passion for both the water industry and operational efficiency through automation and control can be integrated into how the business operation in a large utility such as Anglian Water.
Q. Oliver, you have been promoting Process Automation and Control through a LinkedIn group called WIPAC – what made you start this activity?
A. "It’s fair to say that considering my career in the water industry, it was witnessing operators in the UK taking samples and analysing them on a daily basis rather than actually operating the plants they managed. My expertise is mainly in wastewater and I’ve seen operators take grab samples of mixed liquor on a daily basis rather than use the readings from the instrument that is in perfect working order measuring 24 hours a day. This is particularly critical in the UK where operator manning is low when compared to other countries and the instrument can free up the operator to really “operate” rather than analyse. This situation is win-win for both operator and water company. Unfortunately, this is not what generally happens, and in most scenarios, the operator becomes overworked and stressed. This means that the plant is not optimized and it’s really a lose-lose all around."
Q. What are your main observations from the discussions in the LinkedIn group?
A. "As I see it, there’s so much potential out there that’s not being tapped, potentially as the water industry just isn't quite ready yet. In order to get the benefits of the more advanced potentials for process automation & control, most water companies have a long, long journey ahead. It begins with a robust network of instrumentation - the eyes and ears of any system - integrated into a data management system, the brain, that converts all of the data into usable information, which when gathered and presented, leads to informed decisions from operator to director. There are people out there that understand this and are waiting for the industry to catch up. The realisation is out there - as evidenced by the UK Water Industry Research studies that are due to commence this year."
Q. UK utilities seem to be spearheading the adoption of advanced technology – can you relate to the reasons for this leadership position?
A. "There’s a genuine need for it. I wouldn't say just in the UK, but certainly in the whole of Europe. The legislation on the wastewater side is driving consents down all the time, to the extent that water companies are finding more ways to operate better – and smarter. This is to minimise costs while maximising the returns from sludge processes to at least partially recoup some of the operating costs. This means that more technology has to be used, for example, the Biothelys process that Yorkshire Water is installing while their treatment works in Bradford. Their aim is to make the plant energy-neutral and to do this - you have to watch your energy balance. To properly manage it, you need to know what’s really required for further instrumentation and control."
Q. In your opinion, what are the key challenges in making water networks smarter?
A. "I’ve always been a treatment works person and the network – and oddly enough, the network I managed was completely manual! To go to the root cause of a problem such as the water & wastewater networks, you need to know what’s really happening – this is vital. On the water side, there’s always a problem and water companies have become much better at managing this, however there are still problems that need to be resolved that allow water
companies to pinpoint leakage points in real time. This can be by increasing the number of meters measuring flow and pressure while managing the data more efficiently, or something completely different that I can’t even imagine. The same can also be applied to wastewater networks where the problem is reversed - water getting into the pipes. Here you are virtually unmonitored as it simply ends up at the treatment works or worst case the river. The cost is in the energy required to pump and treat the water that infiltrates in. The problem is that it’s often cheaper to upgrade the works rather than resolve the root cause of the problem!"
Q. What are the next steps we should take as a global community to address these challenges and capitalise on the opportunities?
A. Like anything else, there are initial steps and recognising how to take them. First, recognize the problem and define it. Globally there’s a drive to decrease the energy that the industry consumes and decrease the impact on the planet while producing more drinking water and discharging cleaner effluents - this is the general problem. Next, work out how to do it. This is where steps are being taken with newer groups like WIPAC and SWAN and the more prestigious groups like the AWWA, WEF and IWA. These groups are spreading the knowledge and experience of everyone in the business - and this can only lead to technologies being adopted by the water industry and hopefully make everyone's lot… a little better."
Markus Gauder, ABB: "New technologies will allow delivery of new services and business models"
In his position as Marketing and Business Development Manager for ABB’s Water Industry Segment Initiative at ABB AG, Markus has been held several roles at ABB, including Sales Manager Water Systems, Business Development Water Systems, and involved in Technology Management for strategic industry segments, after having been an active part of the ABB corporate research team for nearly a decade. Markus holds a B.Sc. in Process Engineering and an Executive M.Sc. Management of Product Development, both from the Universität Karlsruhe (TH), Germany.
Q. ABB is an all-around player. Is there a specific focus on smart network technologies?
A. Looking at smart network technologies, ABB is a world leading supplier of instrumentation, automation, as well as electrical products and systems with an engagement in the water industry for over 50 years. Over the last few years, ABB has run and currently runs various R&D activities to develop solutions to address operational and maintenance issues in the water arena, including how to better use available data to reflect customer needs. This, for example, includes activities to make networks smarter by improved data use for advanced control techniques and optimal management of pressure profiles, resulting in saving energy using our drives. Covering a broader scope, ABB also develops cyber security solutions, considered to be one of the future issues of networked geo infrastructures. Group-wide, there are dedicated global initiatives for water and smart grids in place, forming the basis for synergies and transfer of technologies.
Q. As a multinational player, do you see differences in adoption of data-driven solutions between geographies? Where do you see the most significant traction for smart water networks?
A. Based on our experience and market insight, the short to medium-term geographies have different priorities when it comes to operational and maintenance aspects in water network operations. While in some geographies, the primary focus is towards installation and extending the necessary infrastructure, the objective in other parts of the world is more related to increasing the level of effectiveness and efficiency in operation, such as being related to optimizing the energy consumption. This results in a different spending focus. In order to apply smart technologies, an appropriate level of infrastructure should be in place including, for example, instrumentation, reliable communication and automation. Therefore, we see a stronger focus on smart networks in developed countries where there is already a good level of infrastructure in place. Further, business processes need to be revised and if necessary adjusted as well, as it is important to have well-trained staff available. In the medium to long-term, the differences in adopting data driven solutions will narrow as the learning curve in geographies catching up will become steeper. Here, it is about adopting best practices.
Q. What are the main challenges you identify in the market, and how does ABB address them?
A. "One of the main challenges is to use a holistic, systemic approach when addressing a certain problem or issue. Frequently, a wide range of products are used to tackle related problems, without considering their interactions. ABB delivers integrated solutions addressing customers’ needs as a whole. A proper translation of the jointly agreed solution into a roadmap considering a step-wise, gradually evolving approach to achieve the agreed objective is important as well. To ensure this, an engagement of relevant stakeholders on the customer side is important right from the start. We are working towards long-term partnerships with our customers to address such challenges in an optimal and most effective and efficient way."
Q. Can you tell us about ABB's partnerships and what it means practically to partner with ABB? Can you give specific examples from joint work you have done on smart network solutions?
A. "For example, as I mentioned before, we were and are engaged in various R&D initiatives related to smart network solutions. Some of these involve partners such as universities and/or utility customers, very much depending on the objective. In such partnerships, we contribute with our long-term experience and expertise in water as well as provide access to the latest technologies, not only for water, but from ABB’s broad portfolio covering different industries."
Q. What is your vision for the water network 10 years from now?
A. "The complexity requirements on the efficiency of water network operation and maintenance are increasing, resulting in the demand for more intelligent censoring, advanced control systems and new data analysis technologies supporting real-time operation and increasing the overall level of efficiency. Water network operation and maintenance will be transformed from being "data rich and information poor" to being more knowledgeable, allowing for more informed, in-time decision making. System modeling will play a more important role in achieving operational excellence. Business processes will be streamlined by aligning tactical and strategic decisions based on the smart use of data and information. The need for better asset management will continue to drive the integration of electrical systems. New technologies will find their way into the water business and will allow the delivery of new services and new business models. Complete solutions offering fully integrated functionality benefiting from greater synergies will gradually replace systems built only for one purpose that can be frequently seen nowadays. This all is supported by a stronger focus on water networks as we see it now compared to the past. "
Jamie Longman, Sensus: "Utilities need to actively engage in the validation process of the Smart Water Network"
We first met with Jamie at last month’s SWAN UK conference and had the opportunity to discuss his take on smart water metering. This month, we are pleased to welcome Sensus UK as one of SWAN’s newest members. As one of the world leaders in utility infrastructure systems and resource conservation, Sensus UK, under Jamie’s management, will undoubtedly help to change the future of smart water metering.
A. "None of the smart metering activity in the water industry is mandated and in a regulatory environment this can make the business case for changing the meter challenging. But the drivers for smart metering in water are now proven and the deployment of large scale AMR projects well underway. Sensus though is looking at the underlying business challenges faced by the sector and evolving smart water network solutions that will enable utilities to tackle these head-on. These potentially transform the way the business operates and the underlying business case become really compelling. There are lessons to be learnt from the energy sector and synergies with other ‘smart’ networks which the water sector should look to utilize going forward.
Q. Smart Water Networks are about making more out of the data – what are the key challenges you see for the industry in order to achieve a truly smarter water network?
A. The utilities need to actively engage in the validation process of the Smart Water Network. The availability of near real-time data from sensors within a DMA can transform the business from being predominately reactive to one that is proactive, being able to target repair and maintenance crews more effectively. This technology therefore has an impact across far more than just billing and customer service operations, as in smart metering, but becomes a catalyst for transformation across almost all areas of the business."
Q. You are in charge of the UK market – can you highlight some of the unique characteristics and challenges of this market, in comparison or contrast with other parts of the world?
A. The UK has one of the most diverse geography’s for what is a small country. Some regions have the challenges of water shortages and aging distribution networks, others have expansive rural communities to serve or intense urban networks with multi-occupancy dwellings. One universal point is that consumers are generally not aware of the cost of water as the majority are still not billed on usage. This means small behavior changes that could alleviate peak demand or customer side leakages are not encouraged by wider social awareness or behavior changes. A key driver to promote this wider social responsibility would be universal customer metering and usage based billing, regardless of the local supply conditions.
Q. Everybody is talking about smart metering, but there is a lot of legacy infrastructure in place. Is there any value to be realized from existing sensors and meters, without having to wait until all meters become smart?
A. "The issue of legacy technology is not a new one and should not stand in the way of innovation. The cost of fitting sensors within a DMA to existing infrastructure is probably far outweighed by the long term benefits of managing that asset more effectively for the rest of its service life. Of course fitting at time of renewal has to be the most cost effective but this would mean years before there was any significant scale of deployment."
Q. You have recently joined the SWAN Forum, which now has among its members all of the leading meter vendors – many of which are your competitors. Can you relate to the potential of the industry working as a whole towards a common goal?
A. "This is a really interesting time for suppliers in this space, there’s a real drive to work with companies who can provide complementary technologies. Water is a key part of our social and strategic national infrastructure and it isn’t unaffected by changes to the economic and wider environment in which we operate as an industry. Price predictions for energy over the next few years, which forms a large element of our cost base, is just one example. Together as an industry we have to work with government and the regulator (Ofwat) to shape a vision of the water industry for possibly the next 5, 10, and 20 years, towards which we can work to ensure security of supplies, using the best technologies to manage this efficiently to ensure a price consumers can afford."
Seth Cutler, Frost & Sullivan: "Data and network management providers will see the largest, long-term sustainable revenues from smart water metering"
Seth Cutler was a speaker at the SWAN UK Conference. We caught him for a short interview.
A: "Smart water metering is set to see strong European growth over the next decade which will realise a cumulative investment figure of $7.8b by 2020. Should the current climate improve further, including unforeseen pledges of government support, this figure should increase to $13.2b over the same period. This market’s strength is found in its ability to offer water utilities specific paths towards reducing operating costs and carbon footprints while improving service and supply management. These include identifying end point leakage, gaining clarity between leakage, non revenue water (NRW) and chargeable consumption, establishing consumption patterns and using monitoring and predictive analytics to regulate the network and setting up adjustable alarm notifications to predict/prevent end point anomalies. The regional and global backdrops of economic uncertainty and increasing environmental pressures only serve to enhance the attractiveness of smart water metering."
Q: Seems like there is still a lot of debate around the implementation and the benefits of smart metering. What are the key drivers and challenges in this market?
Q: Can you talk about specific geographies where smart metering is already being massively adopted outside the US?
A: "Looking into the European market (as displayed in the figure below), Germany, France and the UK will be dominant regions for smart water metering with a 57.2% market share by 2020. These countries will enjoy higher adoption rates impacting some of Europe’s most populous nations. The dominance of key players such as Veolia and Suez has provided great ability to roll out smart water metering in France and to a lesser extent other regions such as Spain. Germany, home to multiple smart water meter manufacturers, has a strong history of water metering and hosts the Open Metering System Group, which aims to establish universal standards in smart metering for water, electricity, gas and heat. This has helped put smart water metering on the agenda for many German water utilities. Europe’s Mediterranean regions, Iberia and Italy, Greece & Malta, are located in some of the continent’s most water stressed regions, exacerbated by seasonal tourism. This influences the way in which smart water metering is approached, specifically to address pressing concerns in coastal areas and to reduce the need for future desalination developments. These regions are also at the epicentre of the ongoing European debt crisis. Impacts, however, should be minimal and even drive the demand for smart water metering as this effort will bring about long-term spending reductions. The mandatory roll out of water meters in Ireland as a European Union and International Monetary Fund bailout condition adds weight to this argument."
A: "Data and network management providers will see the largest, long-term sustainable revenues from smart water metering. While smart water meters and installation rates will eventually hit a plateau of routine replacements or upgrades, data and network management services will grow in breadth and depth as greater analytical sophistication is demanded by water utilities. What all of this means for the smart water metering and, by association, the smart water networks markets is that we are seeing industrial and geographic convergence in the deployment of smart infrastructure. Regardless of region, the market is witnessing water utilities, smart water meter manufacturers, installation companies, communications network and telemetry providers, meter data and network management firms, cyber security businesses and others merging and building partnerships to offer smart water metering solutions. Rather than continuing to offer pieces of the smart water network to water utilities, businesses will seek to position themselves centrally in the market as smart water metering and smart water network solutions experts to capture large shares of this expanding market."
Dr. Wilbert van de Ven, Vitens: "Making Our Dreams a Reality - Real-time water quality and asset performance at any point in our network"
With the SWAN UK Conference just a few weeks away, we had the opportunity to chat with one of our guest presenters, Dr. Wilbert van de Ven. Wilbert is the Process Technology Manager at Vitens, a SWAN member company. A water treatment expert, Wilbert joined Vitens in 2008. In his current role, he heads up the company’s process technology department responsible for the design of new treatment works, optimization and troubleshooting of existing assets and R&D in new water technology. Wilbert holds a Ph.D. and M.Sc. in Chemical Engineering, both from the University of Twente, The Netherlands.
A. "There is no wide-spread adoption of intelligent infrastructure as of yet in the Netherlands. Many concepts are still in research phase or are being evaluated by the various drinking water treatment companies. The main reason for this is that the underlying network is of very high quality in the Netherlands (with <5% non-revenue water) and there are relatively few events in our network. Some pilots have been carried out last year with smart metering at PWN. Our service engineers in the field are already equipped with laptop and hand-held devices and their work load is directed from our customer service centre.
Within Vitens, awareness is increasing with regard to these intelligent networks. We are currently planning our strategy to develop the next generation control-room and making our infrastructure more intelligent is an important subject. We see that with a changing world, the role of utilities will change. The developments in the energy market are going to have an effect on the decentralized generation of power and we already see that there are many incentives that aim to reduce water use at our customers, usually with the aim to safe energy. This will have a large effect on the performance of our infrastructure, which is designed with a certain water use in mind (the self-cleaning network). Our research and development program focuses on making the entire chain more intelligent and is at this moment mainly in the technical development phase.
Our ultimate dream is that we get knowledge of the real-time water quality and asset performance at any point in our network. This information will allow us to further improve our service level towards our customers, make our operation more sustainable and safe costs in the long-term. "
Q. Can you share a few examples of data-driven initiatives in Vitens, and some initial results?
A. "Together with the TU Delft, DHV, Logisticon and Perceptive engineering, we have set up a pilot to develop a new way to operate our treatment works. All data from the plant is captured (>2000 RTPM tags) is statistically analysed and linked to laboratory data. This data is translated into data driven models describing the actual status of the plant. Parallel to the data-driven models, we have physical and chemical models of the processes in place that can support the accuracy of the data-driven models, or can be used to predict process adjustments. The first results already show that translating raw data into information is invaluable in further optimization of the plant itself.
In a large research consortium, we are developing quality models for our distribution network. We would like to integrate these models into our current hydraulic model packages for our distribution network. Ultimately, these models will be used to advise our control room in case of a quality issue in the network. The data could be linked to our GIS system and ERP database and automatically inform our customers.
Our laboratory has the vision to bring our standardized analyses into the field. In this regard we have developed new sensor concepts together with innovative SMEs that can be implemented into the network. Just last week we made the step from bringing one of these sensors from the laboratory into our network."
Q. What are the biggest challenges towards achieving the vision, and how do you see the industry’s role in assisting Vitens attain this goal?
A. "For us, the main challenge is that this type of developments requires a different mind-set to get them introduced. The introduction on a large scale of sensors, actuated valves, etc. requires enormous upfront investments while it is not really clear how big the benefits will be. Defining the dot on the horizon and translating this into a business case is not a trivial task, and since we are risk averse moving the adoption forward takes time. The concepts of the intelligent infrastructure requires a multidisciplinary approach where ICT invades the traditional domain of civil and chemical engineers and the results needs to fit your asset management strategy.
As Vitens, we recently decided to break the stalemate. We will be isolating a relevant area of our distribution network and open it up to third parties. We will develop standardized sensor hotspots and integrate the pilot into our ICT infrastructure. We would like to invite parties from industries to share their visions on how we can make our dream reality, SWAN is a perfect example of the networks we enter to get this going."
Graham Symmonds, Fathom: "The Smart Grid: How to adopt its functionality at a reasonable cost"
We recently had the privilege of a one-on-one with Graham Symmonds from GWRI, one of SWAN’s newest member companies. Graham shared his years of experience and hands-on expertise in the water industry, and his views on the value of data on the utility. Prior to joining GWRI, Graham worked at Algonquin Water Resources of America. Earlier in his career, was employed by Hill, Murray & Associates as Director of Operations, specializing in design and operation of membrane bioreactors, and had nearly a decade serving the Canadian Navy in operational and support roles. Graham holds a degree in Mechanical Engineering from the University of Toronto and completed studies at the Royal Naval Engineering College, UK.
The Smart Grid for Water is a data integration and analysis platform. It’s being smart about what data we collect and how we use it. I believe that the Smart Grid for Water is changing the operating system for the utility by increasing the granularity and frequency of data. For the consumer this means an understanding of where, when and why we use water – and how much they are actually using; for the utility, it means resource and financial efficiency. As a result, the Smart Grid for Water fits directly into themes of revenue assurance, responsible water resources management, asset management and consumer engagement in conservation.
Q. The US market seems to be quite focused on consumer metering but not a lot of investment in distribution metering. Can you explain the differences between the US and the rest of the world in this regard, and do you foresee a change?
In part I think the answer lies in the relative costs of water. We know both Canada and the US charge the least amount for water in the industrialized world – fifty cents per cubic meter versus $1.50 and more in Europe. Add to this a belief – misplaced in my opinion – in water abundance. The result is that in the absence of water scarcity as a driver, investment in internal leak detection has not been a priority. However, the recent economic downturn has drastically impacted municipal budgets. This has led to increased scrutiny on low-value activities such as meter reading, the need to ensure all revenue is collected, and to ensure no resources are wasted on non-revenue water. These issues can be addressed at the consumer meter.
Water conservation mandates such as California’s 20x2020 (20% reduction in per capita consumption by 2020) and the aging nature of the entire US water infrastructure are also driving an increased awareness of leaks and their rectification. This will lead to an increased interest in distribution system monitoring.
Q. We often relate to the value of data for the utility – but is there value for the consumer as well?
Without question. The average consumer knows neither how much water they consume, nor the impact that small changes in behavior can have on their own costs. We know that water prices are going up as a result of increasing scarcity, decreasing quality, degrading infrastructure and increasing operational costs. Once the cost of water crosses the “care point” for consumers, they will be demanding more information from their utilities.
Further, consumers are becoming increasingly data-hungry. But they want particularized information specific to their condition. They will want to know: How much water do I use? How much did I use yesterday? Is my consumption statistically different from a week ago? How do I fare compared to my street, my neighborhood, my city? How much water should I use? Based on weather data and evapotranspiration calculations – how much should I have used outside? Information from the Smart Grid answers these questions.
Q. Where do you still see challenges in the Smart Water Grid market space and how can we, as an industry, overcome them?
The Smart Grid for Water is in its infancy. I think most people view the Smart Grid as automated meter reading. But it’s much more about the analytics and engaging the consumer. I think the market adoption comes naturally with utilities realizing that very large financial and resource efficiencies can be gained through the adoption of a Smart Grid approach.
Our challenge is to make the Smart Grid accessible for every size of community. There are over 50,000 community water systems in the US and almost 55% of those serve less than 100,000 people. To get these utilities across technological divide, our servicing models must be capable of providing Smart Grid functionality at a reasonable cost.
Glenn Steiger, Glendale GWP: "Working Towards a Fully Integrated Smart Water Network"
As part of our monthly interview series with market leaders, we were pleased to have had the opportunity of speaking with SWAN member, Glenn Steiger, General Manager & CEO of Glendale Water & Power (GWP). Under Glenn’s leadership, GWP has transitioned the utility through the integration of smart grid technology, water and energy efficiency and a significant increase in the provision of renewable energy. GWP was the first utility in the U.S. to receive DOE stimulus funding for its smart grid initiative and has achieved one of the highest percentages of renewable power within California.
The good news is that a “water smart grid” system is much simpler and is less technologically challenging. Costs are far less than a similar energy system. And, it has greater acceptance among customers. The less than good news is that the system is limited in its ability to provide both customer-focused applications and utility driven operations. While our “in-home devices” show usage patterns and can communicate potential leak situations, vendors are not knocking our doors down with innovative and useful customer applications.
Q. US utilities seem to be more interested in consumer metering than distribution network metering. Do you think this is bound to change? In your opinion, what are the main drivers in this market?
It has to change! Obviously, for the system to gain customer and public acceptance, the applications that are directly related to the metering and its corresponding data output, are crucial. Plus, it is the metering data that forms the foundation for the entire smart grid initiative as we look to the future. Once that foundation is in place, accepted and utilized, the focus will shift toward improving the efficiency and effectiveness of the distribution system; true for both electric and water. Unfortunately, we’re looking at least 5-10 years down the road before we see a significant shift toward focusing on the distribution network. The drivers start with the premise that both electric and water utilities still use technology that has been mostly static for the past 70-100 years; the rest of society has moved ahead exponentially when it comes to technological revolution. Beyond that, we need a far more efficient system than we currently have. 10% electric distribution losses and over 5% water system losses are just not acceptable in today’s world!
Q. Can you share your vision for a "smart water network"? How far is our industry from achieving this vision?
My ultimate vision for a smart water network is one minimizes losses, provides multiple usage applications to consumers, but most importantly fully integrates with the smart electric network. This integration will be critical to the sustainability of water resources over the long-term. The system that we are building in Glendale does just that, in that it integrates the data from both electric and water into a single operating system instantly locates leaks and maximizes the operation of our water system by the and sequencing and regulation of pumping when electric costs and loads are at their lowest point. This is particularly crucial for locations where water supply is scarce such as Southern California. This vision is a short-term one in Glendale. Unfortunately, it will be many years before the rest of the industry buys in to this view and mode of operation.
Pascal Bonnefoi, Schneider-Electric" "We Must Work Together as an Industry"
Pascal has been responsible for Schneider Electric’s water segment marketing since 2001. Recently, he has taken on an active role in the creation and deployment of innovative solutions for water and wastewater within the company. Pascal initiated a water community within Schneider Electric, enabling them to expand their activities, including a Global Strategic Account sales team, responsible for the relationships with world leaders Veolia and Suez Environment.
A. Without question, it was the quality and high level of professionalism of the participants that made the conference a success. We promoted the conference via SWAN members, who in turn, shared the information with their colleagues in the industry. SWAN members and conference participants established close relationships based on competency and mutual understanding before the conference. This resulted in valuable information sharing and networking during the conference.
Schneider Electric’s Energy Management strategy combines energy and process efficiency, in line with the demands of the water market. Conference participants showed a positive view on the importance of innovation and information sharing. Simply put, everyone seemed to be convinced that "I cannot do this on my own” and that joint activities are the real key to success. We must work together as an industry.
Q. SWAN is now gearing up to initiate the SWAN Alliance worldwide. How do you view its structure, objectives and promotion worldwide?
A. SWAN’s structure is just the beginning of the story. It’s the determination and support of its members and contributors that will drive it forward. SWAN is a vehicle here, a strong platform, and I am confident in its active members will take great strides to help it evolve according to real market needs. From our very first brainstorming session and initial organization, we’ve witnessed a snowball effect in conference registration. We filled our quota long before the conference date and regrettably, we had to decline numerous requests to participate.
Q. In your opinion, what does the future hold for the SWAN Forum?
A. Without a doubt, the added-value in establishing the SWAN Forum and hosting this first conference, has addressed a longtime need worldwide. The question here is more along the lines of the format we will use. We plan to set up specialized working groups as a first phase. In a second phase, we might consider sharing our activities with government authorities and universities to broaden our scope, so that our efforts will go beyond a local operation level. For Schneider Electric, we see the SWAN Forum as both a commercial and technical opportunity and discussion are already underway on industry standards and initiating working groups for Smart Water networks.