Thursday, 9 February 2017

Water prices set to increase for the first time in 17 years

Price of water will go up to ensure sustainable supply
Details of first price increase in 17 years to be included in upcoming Budget, says Masagos
By Lin Yangchen, The Straits Times, 8 Feb 2017

For the first time in 17 years, Singapore residents will have to pay more for water, as the nation seeks to ensure long-term water security.

Details of the increase in water prices for both domestic and non-domestic users will be in the upcoming Budget to be announced on Feb 20, said Minister for the Environment and Water Resources Masagos Zulkifli.

He said on a visit to Singapore's partially completed third desalination plant in Tuas yesterday that water has to be priced correctly to ensure a sustainable supply and reflect the scarcity of the resource.

The tariffs for domestic potable water, calculated monthly, stand at $1.17 per cubic m for the first 40 cubic m, and $1.40 per cubic m thereafter, excluding taxes.

The last price increases were introduced progressively between 1997 and 2000, when tariffs went up by 20 per cent to 100 per centon a sliding scale depending on usage.

The cost of producing and supplying water has increased, because of reliable but more expensive methods such as desalination and the need to renew ageing infrastructure like old production plants and pipes.

"In many countries where it is not priced properly, the water ministry is not able to recoup cost enough to build new assets to replace old assets, and sometimes, assets are just left in disrepair to the extent that even though they may have water, the water cannot get to where it is needed," said Mr Masagos.

"Water is a very critical asset that we have to take care of."

Experts have long called for the relatively inexpensive water prices to be raised in Singapore, as this would encourage people to reduce consumption.

Mr Masagos also noted the importance of diversifying water production methods. "If there is a more prolonged dry season affecting the region, Linggiu will actually run out in about two years. And therefore, we always must be ready to ensure that we have enough assets... to supply water to Singapore."

The Linggiu Reservoir in Johor supplies Singapore with up to 250 million gallons of water a day under an agreement with Johor.

Mr Masagos said that even in a worst-case scenario, Singapore should not need to resort to water rationing, due to its diversified sources.

Desalinated water is the most expensive of Singapore's four National Taps - with the other three being imported water, water from local reservoirs and Newater - given the energy needed to extract salt from seawater at high pressure.

Nonetheless, said Mr Young Joo Chye, director of engineering development and procurement at national water agency PUB, it remains a key pillar of Singapore's water supply strategy. "As a source of water that is independent of rainfall, it bolsters the reliability of our water supply against prolonged periods of dry spells and droughts."

Two desalination plants are now in operation here, meeting up to 25 per cent of Singapore's water demand of 430 million gallons per day. Desalination will meet up to 30 per cent of demand by 2030, when at least five plants are expected to be operational.

Water price hike: Water users worried but see need to curb wastage
Some hope increase won't be too much and that Govt will factor in economic climate
By Carolyn Khew and Lin Yangchen, The Straits Times, 8 Feb 2017

Consumers and businesses have voiced concerns about water rates being hiked, even if some acknowledge that there is a need to do so to curb wastage of the scarce resource.

Restaurant Association of Singapore president adviser Andrew Tjioe said he hopes the Government will factor in the present economic climate when deciding on the price increase. "We have other things to take care of like operation costs, which are very high," he said.

Yesterday, Minister for the Environment and Water Resources Masagos Zulkifli said the price increase is meant to ensure the reliability of Singapore's water infrastructure, and to reflect the scarcity of water.

This is the first time in 17 years the price is being increased. The details will be announced during Budget 2017 on Feb 20.

Car-grooming firm Groomwerkz's managing director Tan Thiam Yong said higher prices for water usage could prompt users to be better at conserving the resource. "For us, we have already done all that we can to save water but for those who are not at their optimum, it might prompt them to do so," said Mr Tan.

His company is now looking to recycle 90 per cent of the water used for car-grooming services, including car washing, by the end of the year.

Housewife Ng Kah Kiow, 54, who lives in Toa Payoh, said: "Naturally, we hope prices will not increase, but we understand that costs are going up and water is precious."

Professor Asit Biswas, visiting professor at the National University of Singapore's Lee Kuan Yew School of Public Policy, said the domestic water price should be raised by at least 50 per cent, with subsidies for low-income and large families.

The price of water should be doubled for industrial users, so that companies will increase efforts to reduce water use, he added.

He said there should also be yearly increments according to the inflation rate, to encourage people to reduce consumption.

The tariffs for domestic potable water, which are calculated monthly, stand at $1.17 per cubic m for the first 40 cubic m and $1.40 per cubic m thereafter, excluding taxes.

Prof Biswas said Singapore would have a water crisis if the Linggiu Reservoir does dry up. It is now at about 32 per cent full. The reservoir allows Singapore to draw its entitlement of 250 million gallons per day from the Johor River.

Kopitiam, which operates about 80 foodcourts and coffee shops, is hoping the price increase will not be significant.

"Any price increase will definitely affect business costs... Let's hope that the price increase won't be too hefty," said a spokesman.

Challenging times ahead for Singapore's water security
Masagos highlights importance of combating wastage even as prices are set to increase
By Lin Yangchen, The Straits Times, 9 Feb 2017

Singapore is facing a major challenge in its water security in the next 50 years, and the impending rise in water prices - which sparked debate when it was announced on Tuesday - is only a small part of the solution.

Minister for the Environment and Water Resources Masagos Zulkifli said yesterday at a Pre-Committee of Supply consultation session - attended by 35 members of industry, academia, non-governmental organisations and the public - that having a culture of "revulsion" towards water wastage was much more critical to the country than worrying about the cost of water.

Industry will have a growing role in perpetuating this culture, as it is already using more than half (55 per cent) of Singapore's water. By 2060, this is predicted to hit 70 per cent of Singapore's total water demand, which itself is expected to double by then.

Nevertheless, Mr Masagos said the Government will give due consideration to economic factors in setting the price of water.

"While we need to recover its cost, we cannot do so by sacrificing the competitiveness of Singapore to attract industries to come here," he said.

This might not happen, noted Mr Lee Kok Choy, managing director and Singapore country manager of Micron Semiconductor Asia, who said: "The cost should be whatever it takes to cover the cost of manufacturing water... but it is a very small percentage of total cost (for companies) and it won't drive industry out (of Singapore) if all you do is just cover cost."

Participants at the event said the price increase would motivate decision-makers at companies to take action to reduce water usage.

Suggestions for this were tabled at the session, such as incorporating water-saving measures in the design stage for buildings and industrial processes, rather than trying to improve efficiency later.

Mr Jagadish C.V., chief executive of Systems on Silicon Manufacturing Co, suggested incentives to encourage the right culture in reducing water consumption.

"When you increase the cost of water, there should be incentives that are linked to social responsibility. For example, if you increase (water price) by 1 cent, you give a rebate of 0.45 cent to the industries that are already recycling 45 per cent (of water). The message is, if you are socially responsible in recycling, you pay less," he said.

Although Singapore's water consumption rate of 151 litres per capita per day is considered low among developed cities in Asia, many European countries have water consumption rates below 140 litres per capita per day.

In 2015, the World Resources Institute ranked Singapore highest in water risk alongside six other countries, most of which are in the Middle East.

How industry can cut its usage
By Carolyn Khew, The Straits Times, 9 Feb 2017

Industry users could do more to lower their water footprint by recycling or reusing more of the precious resource.

Top water users here include wafer fabrication companies, which use water as a cleaning agent, as well as other firms that use large amounts of water for cooling purposes.

Professor Ng Wun Jern, executive director of the Nanyang Environment and Water Research Institute at Nanyang Technological University (NTU), said an imminent price hike would raise operating costs for the industry and drive it to consider changing processes to use less water.

One way would be to treat the waste water such firms produce and reuse it internally, such as for flushing toilets, said Dr Cecilia Tortajada, a senior research fellow at the Institute of Water Policy, Lee Kuan Yew School of Public Policy. "Some companies are already improving the efficiency of their water usage, but there is definitely room for improvement," she added.

At the Pre-Committee of Supply Consultation Session with Minister for the Environment and Water Resources Masagos Zulkifli yesterday, participants from the industry said that industrial water consumption data for benchmarking and comparison is not yet available.

Such data would help them in their efforts to implement more water-efficient practices.

Water around the world is generally priced too low, Singapore included, experts said. A price hike would nudge users to think twice about how water is being used. Dr Ng Yew-Kwang, the Albert Winsemius Chair Professor of Economics at NTU, said: "As a rule, utility prices are too low rather than too high in virtually all cities/countries."

But while both price and non- pricing strategies could help reduce water demand, people need to understand that water is scarce, said Dr Tortajada. "Many people know about climate change but don't see it as something that our behaviour will have an impact on," she added.

Additional reporting by Lin Yangchen

Targets, real-time feedback can cut water use in the shower
By Sumit Agarwal and Sing Tien, Published The Straits Times, 11 Feb 2017

Water is an important and scarce resource in Singapore. One of the key strategic thrusts in its water supply blueprint is long-term self-sustainability.

Singapore has developed a water supply system using the Four National Taps - local catchment areas, imported water, reclaimed water and desalinated water - to satisfy long-term needs.

And, for the first time in 17 years, the Government is looking to increase water prices to cover the cost of maintaining and upgrading water supply infrastructure.

Besides securing an adequate water supply and raising prices, water demand needs to be managed. Singaporeans have to learn to conserve water.

The national objective to reduce the per capita water consumption to 140 litres a day by 2030 is on the right track, as consumption has been declining from 165 litres a day in 2003 to 151 litres currently.

To help achieve this goal, the National University of Singapore Business School and Department of Real Estate collaborated with PUB to lead an international research team to study how to cut households' water use for showers.

In Singapore, showering accounts for almost 30 per cent of an average family's monthly water consumption.

If households can change their behaviour during showers, that can yield substantial savings.

One way to change behaviour is to furnish real-time feedback to users during showers on how well they are conserving water. In Switzerland, an experiment involving households fitted with smart shower devices that can provide real-time feedback on water temperature, volume used and how well water consumption goals have been met led to a 22 per cent reduction in water usage. The savings amounted to 484 kWh of energy and more than 8,500 litres of water a year for a two-person household.

We wanted to find out if such intervention would be effective in Singapore. Some 500 households in HDB flats participated in our study over a period of four to six months. Each household was fitted with smart shower devices where data regarding water consumption can be recorded automatically, giving us data for more than 300,000 showers.

For the first 20 showers, the only information all households received was water temperature. This is to help us measure what is their a priori water consumption.

After 20 showers, households were randomly divided into groups with different water conservation targets and feedback regarding the volume used. They were given water conservation targets of 10, 15, 20, 25 or 35 litres.

These targets correspond to ambitious, moderate and easy goals. For households with targets set, they were encouraged to try keeping their water consumption below it. During showers, besides showing volume used, the smart meter also gave feedback on how they were performing with monitor displays of "Very Good", "OK" or "Too Much" to let them know how well they had met the targets.

Another group of households received only water temperature information with no target or feedback. Another group received real-time feedback on water volume when showering with no feedback on how well they were conserving water.

Our results show that for the first 20 showers prior to providing feedback, Singaporeans use almost 20 litres of water in a single shower that takes about five minutes. This is the average amount of water used per shower.

However, when there is feedback given regarding water usage, we find that water consumption goes down by about 10 per cent per shower, saving two litres daily.

But this saving varies by the targets set. Those who received target and volume feedback reduce their consumption the most. The most effective is when a moderate volume target is set. This is the 15-litre target where 3.9 litres less water was used on average during a shower, giving a saving of about 19 per cent. The ambitious target of 10 litres was also effective, though to a lesser degree, with 2.9 litres of water saved on average during a shower.

Our study concludes that getting households to set targets and giving them feedback on their performance not only promote awareness of the need for water conservation but also result in them using less water.

Just as in the case of individuals where goal setting and feedback are keys to performance, households behave similarly even in the often thought ill-disciplined area of water conservation.

Households are also like individuals in that the targets set must be within reach to motivate households to strive hard to attain them. When a target is too ambitious (below 10 litres) or too easily attainable (above 30 litres), it becomes less effective in encouraging households to save water.

With appropriate targets and feedback, Singaporean households can be persuaded to be more water efficient. Their behaviour can be modified within a short span of time, and hopefully, over time, attitudes towards water conservation will also change in the direction of a more sustainable lifestyle.

Last August, the monthly utility statement that households receive showed how they performed on two distinct types of utilities - water and electricity - relative to the neighbourhood and national averages. Such feedback, though not in real time, has a social comparison dimension that may encourage water conservation practices.

Additionally, the statement provides feedback such as "Well done. You have consumed less in all your utilities in the recent two months as compared to the previous two months", much like what was furnished in our study.

Real-time feedback is ideal as we've shown in our study. While this may not be feasible for the time being because of infrastructural issues, we can imagine a system where, one day, households can link their spike in water consumption to specific activities such as car washing and, accordingly, make conscious efforts to reduce the frequency or modify the way in which such water-consuming activities are carried out. This will require investment in infrastructure.

Our utilities board will need to weigh the long-run savings against immediate costs. Not all considerations lend themselves to being monetised. But can and should we place a dollar value on saving the earth?

Sumit Agarwal is visiting professor at National University of Singapore (NUS) Business School and Sing Tien Foo is Dean's Chair Associate Professor at the Department of Real Estate. This research was conducted together with Davin Wang from NUS, Lorenz Goette from University of Bonn, Thorsten Staake from University of Bamberg and Verena Tiefenback from Swiss Federal Institute of Technology.

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