26 October 2016 / Reese Tisdale
Big Data and Water – Are Utilities Missing the Boat?
The vision for an end-to-end, “smart water utility” has been slow to emerge as the internet-of-things envelops our daily lives. For water utilities, unfavorable economics, labor challenges, technology aversion, and cultural resistance to change, are often flagged as barriers too large to overcome. In a vacuum this may make sense, but the reality is that we live in an ever-connected world with a dynamic range of challenges, solutions, and, in this case, opportunities.
Fortunately, seeds are being sown by European utilities that could have a far-reaching, global impacts. Europe’s municipal water sector is on pace to lead the world toward smarter municipal networks by leveraging a holistic approach — factoring in both CAPEX and OPEX, or total expenditures (TOTEX). By zeroing-in on supply management, metering, leakage, and energy efficiency, utilities across the continent are optimizing their operations through a host of demonstrated hardware and software solutions that are capable of measuring, monitoring, and analyzing the networks as a whole.
Highlighting this shift to Big Data:
- Non-revenue water and leakage management are key issues plaguing the water industry. Europe’s urban non-revenue water stands at nearly 20%, on average, and exceeds 50% in select cases. This means that 500 of every 1,000 gallons are lost to leakage or unbilled. Bluefield Research’s bottom-up analysis of operational metrics indicates that some of the region’s utilities have already achieved an economic threshold for losses, thereby making operations & maintenance solutions, such as real-time monitoring, even more critical.
- Advanced meter rollouts– an important step in harnessing data at the network and customer interface– are expected to reach US$13 billion from 2016 and 2025, or 7% of overall utility CAPEX. While only a piece of the puzzle, smart meter adoption serves as a key entry point and industry bellwether for more sophisticated data and analytics platform opportunities to improve billing, tariff forecasts, network efficiency, and customer management.
- Smart water forecasts for Europe show the sector to surpass US$30 billion from 2016 and 2025. In some instances, Bluefield’s forecasts show OPEX reductions for utilities to surpass 30%. Beyond metering, utilities are implementing high resolution condition monitoring, event management systems, and back-end analytics capabilities.
More broadly, recently released forecasts by Bluefield Research detail CAPEX for Europe’s municipal utilities exceeding US$536 billion— so the need for more efficient spending from treatment plants and across pipe networks to the customer is paramount to meeting demand and water quality standards. The bottom line is that water sector players will face strong headwinds by adhering to the status quo, which will be exacerbated by scaling urban populations and deteriorating infrastructure already straining utility budgets.
Unquestionably, water utilities are a long way from the data driven panacea espoused by data-driven silicon valley, but a lack of information is no longer an excuse. “Smart” solutions do exist.
In today’s rapidly changing information technology landscape, the prudent strategy would be to put your money where the data is…
What’s your bluefield strategy?
Reese Tisdale is the President of Bluefield Research, a market research and insight firm focused exclusively on supporting companies addressing opportunities in water.