BMI View: This quarter we have updated and expanded our forecasts across various areas of the water sector. We now cover mains and non mains consumption and extraction, water losses, desalination production and household connections to mains networks. Our new forecasts reflect our overall expectation that water demand in Australia will continue to rise, putting additional pressures on the dwindling freshwater reserves, and stimulating investment in desalination and water treatment and reuse infrastructure.
Heavily dependent on surface water, Australia's water market is increasingly looking to recycled water sources as droughts intensify and ground water resources dwindle. While new reservoirs are being constructed, and large wastewater reuse projects are underway, rising demand for water from mains and non mains users puts increasing pressures on limited resources. Despite the government's ambitious water infrastructure development goals - particularly for desalinated and reclaimed water projects - slow progress suggests that reservoirs and rain water will continue to account for the majority of water produced over our forecast period to 2019.
With scarcity being the key theme in the Australian water landscape the focus is very much on efficiency. As such we are seeing the increased involvement of commercial utilities, including the recent entry of UK's Balfour Beatty. Furthermore we are seeing innovative approaches being adopted, including the recent trial of the River Reach Program, involving the trading of water rights between farmers.
BMI views the evolution of a more regimented and coherent water reuse culture as key to Australia's future water security. Within this, we anticipate the need for new developments in wastewater treatment, collection and redistribution infrastructure and policies. In many places in Australia the reuse of wastewater is unplanned indirect potable reuse (IPR) - such as in Adelaide, where wastewater runs into large river basins and flows downstream and is subsequently re-extracted and distributed to consumers. However planned IPR occurs when water is treated and deliberately released into a storage facility or water source, such as a lake, where it can be contained until it is subsequently extracted and distributed to the consumer, as is the case in Western Australia, where treated sewage is injected into underground aquifers.
Water network maintenance and management varies between states, making for a confusing framework for distribution. In Western Australia, Southern Australia and the Northern Territory, state-owned companies are responsible for water supply and distribution. In Victoria, NSW and South East Queensland local governments are separate municipal retail service providers that cover large areas of each state. Utilities owned by local governments provide services in parts of greater Queensland and Tasmania.
Many of the water service companies are state owned, leaving little room for foreign players. However, there are opportunities in the industry. The increasing openness of the water sector to foreign and private companies is visible in the growing number of contracts awarded to firms such as Veolia, to operate and maintain water and wastewater treatment plants and distribution networks.
Key BMI Forecasts:
We forecast total mains water production to reach 11978mn cubic meters in 2015.
Of this, 3.1% will come from underground sources, equating to 369mn cubic meters.
11054mn cubic meters will come from surface water resources.
A further 351mn will come from desalination, and 248mn from recycled treated wastewater.
Total water consumption will reach 88bn cubic meters
Mains consumption will rise by 1.2% to 10bn cubic meters, and non mains will account for the remaining 78bn cubic meters.
Household consumption will reach 1720mn cubic meters, and the largest non-domestic mains water consumer will be the agriculture sector which will account for a further 6.9bn cubic meters.