Select Committee on Science and Technology Eighth Report


1. The Sub-Committee visited Australia from Monday 30 January until Saturday 4 February. Members present were Lord Broers, Lord Howie of Troon, Lord Mitchell, Lord Oxburgh and the Earl of Selborne (Chairman). In attendance were Tom Wilson (Clerk) and Professor Richard Ashley (Specialist Adviser).

Monday 30 January

Tour of Western Treatment Plant, Werribee

2. The first engagement was with Melbourne Water at the Western Treatment Plant in Werribee, where the Committee was given a tour and a presentation. Melbourne Water is a state-owned company, run as a corporation, which is responsible for looking after the dams, the major supply pipes and the water treatment process. The company treats 94 percent of Melbourne's sewage in two large treatment plants and also manages rivers, creeks and major drainage systems in greater Melbourne. The "retail" companies, also state-owned, purchase water from Melbourne Water and are responsible for supplying this water—as well as sewerage services—to their customers.

3. The tour was conducted by Brad McLean and Peter Scott of Melbourne Water, who explained that Werribee treated 52 to 53 per cent of Melbourne's wastewater, equating to a flow of around 480 megalitres per day. The plant was spread over an enormous site of 11,000 hectares, with the wastewater passing through a succession of stabilisation ponds and undergoing activated sludge treatment. As part of this process, methane was collected from the anaerobic section of the first pond and used to generate power on-site, with the result that the plant was getting close to being energy neutral. A further initiative was the re-use of "Class A" water—treated effluent that had been further treated by chlorine and ultraviolet—which was used for the irrigation of food crops in the surrounding areas.

4. The tour was followed by presentations from Professor Malcolm Chaikin and Professor Michel Lefebvre of the University of New South Wales, who believed that desalination needed to play an important role in addressing the demand-supply imbalance in cities in future. However, Professor Chaikin noted that there were significant problems with current desalination technology—the high energy requirements, the environmental impacts and the cost—and he felt that Sydney should delay their proposals in this area for the moment. In the meantime, his studies were concerned with the process of osmotic distillation, which might provide a lower energy method of removing salt from water. Professor Lefebvre concluded the session by explaining how the principles of fractal geometry can be applied to membrane technology and the process of osmotic distillation.

Presentations from Melbourne Water and VicUrban

5. Later in the day, the Committee was given presentations by senior figures from both Melbourne Water and VicUrban, the Victorian Government's urban development agency.

6. Howard Rose, Manager of Corporate Strategy at Melbourne Water, started by explaining that because of state ownership the Minister for Water was responsible for setting the company's policy and legal framework, as well as obligations on conservation and recycling. Financial performance was monitored by Victoria's Treasurer [Treasury Minister], with the company having to pay a dividend to the state each year. In terms of regulation, prices and consumer service were overseen by the Essential Services Commission, the environment by the Environmental Protection Agency, and water quality by the Department of Human Services.

7. Bruce Rhodes, Manager of Urban Water Planning at Melbourne Water, gave the Committee a more in-depth look at some of Melbourne's key supply and demand issues. Of the water used across Victoria, 77 percent was used for irrigation (supplied from separate reservoirs), 8 percent for urban and industrial purposes in Melbourne, 9 percent for non-metropolitan urban and industrial purposes, and 6 percent for rural purposes. Within Melbourne itself, 62 percent of the water was used for residential supply, of which 47 percent went to taps, showers and toilets. The remainder was used in the garden, in clothes washers and for other purposes.

8. Turning to Melbourne Water's catchments, it was noted that 80 percent of water was supplied from 140,000 hectares of land specifically set aside for water supply, with the remaining 20 percent coming from unprotected areas. The protected areas were designated as national park and were free from human habitation, farming and industry, resulting in a very high quality of water. The reservoirs could hold 1.7 million megalitres, but there had been a below average inflow since 1997. Accordingly, the Drought Response Framework—providing for increasingly severe water restrictions—had been implemented alongside a high-level communications campaign to promote water conservation amongst the public. The latter consisted of distributing brochures and booklets, running a comprehensive website—with information on reservoir levels, water conservation, educational initiatives and so forth—and disseminating daily water storage information through the media and various other means. As a result of the restrictions and communications campaign, water use during the summer had dropped significantly.

9. The second presentation came from Barton Williams and Simon Hilbert of VicUrban, the Victorian Government's urban development agency. VicUrban was responsible for developing rural and metropolitan projects throughout Victoria, focusing on community, affordability, sustainability and commercial success (the body is required to make a profit). The sustainability objective was underpinned by a Sustainability Charter.

10. VicUrban had worked on water sensitive urban design for over 15 years, using collected stormwater as an amenity in developments such as Lynbrook and the Docklands, and working towards demand reduction through efficient water use and the utilisation of alternative water supplies. The current flagship project, Aurora, a community of around 25,000 people in 8,500 homes on a 622 hectare site, would aim to minimise demand for potable water through water re-use and a fit-for-purpose water use strategy.

11. Specifically, it was intended to treat wastewater on-site and re-use it for car washing, garden watering and toilet flushing. In addition, stormwater would be treated through swales, rain gardens and bio-remediation ponds before being discharged into receiving waters. The use of roofwater for domestic hot water supply had also been encouraged. There were potential health issues relating to the latter, but these could probably be addressed if the water was heated to the regulation minimum of 60 degrees Celsius.

12. In general, however, there were several challenges and obstacles facing the spread of water sensitive urban design which needed to be addressed. At an economic level, there were few financial incentives for developers and the costs of supply and installation of the necessary infrastructure could not always be recovered through the sale price. Moreover, local authorities could be reluctant to carry out the required infrastructure maintenance, predominantly through a lack of understanding of the benefits and potential costs involved. At a regulatory level, there was a perceived lack of information from the Environment Protection Authority and local councils about the requirements for water sensitive urban design elements, for example the required water quality standards for different uses. Finally, there were potential problems with ensuring public acceptance of water re-use due to the fear of adverse health impacts.

Tuesday 31 January

Tour of Council House 2 and meeting with Lord Mayor

13. In the morning the Committee was given a tour of Council House 2 (CH2), a new development by the City of Melbourne to provide the Council with additional office space. As the Lord Mayor explained later (see below), CH2 is intended to be a benchmark building reflecting the City of Melbourne's determination to achieve environmentally sustainable growth.

14. The tour was conducted by Peter Cooper of NuSource Water, which designed the wastewater treatment and sewer mining facility in the basement. The facility would take the building's wastewater and treat it to a "Class A" standard, before recycling it for toilet flushing, cooling devices, irrigation around the building and other purposes around the City. To augment the amount of water available, it was intended to take raw sewage from the mains sewer that runs past the building and subject it to the same treatment process. It was suggested that up to 100,000 litres of Class A water could be produced each day. The cost of the process was estimated at A$1.57 per cubic metre of water treated, comparing favourably to the A$1.86 per cubic metre (a combined water and sewerage price) with Melbourne Water. However, it was not entirely clear to the Committee exactly which costs and externalities were factored in to these figures, nor how the energy use needs could be reconciled in terms of life cycle analysis.

15. The treatment process itself had no biological component and operated within a sealed unit, ensuring that there were no odour problems. The solids would be removed by screening and returned to the mains sewer, with the remaining wastewater passing through ultra-filtration ceramic membranes. Ceramic membranes were being used in spite of the extra expense because they could deal more effectively with contaminants and be cleaned easily with hot water. Finally, the treated water would go through a reverse osmosis process. The facility could be switched off during holiday periods.

16. Following a look around the other parts of the building, the Committee was greeted by the Lord Mayor of the City of Melbourne, John So, at the Town Hall. He explained his determination to promote sustainable growth within the City, referring both to CH2 and to other initiatives such as the installation of a solar panel system over Victoria Market. There was also huge potential to export environmentally sustainable technologies to Asia. The Chief Executive of the Council added that CH2 was intended to demonstrate to the building industry that environmentally sustainable design is practicable. He also noted that consideration was being given to using sewer mining to provide all of the water needed to irrigate the City's parks and gardens.

Tour of Docklands

17. The Committee proceeded to the Melbourne Docklands, where VicUrban is working on regenerating the area with the intention of creating a home for 20,000 people and a workplace for 30,000. The area is a municipality in its own right and VicUrban currently controls all development as well as the parks and the roads. Mark Haycox, an urban designer with VicUrban, welcomed the Committee and conducted a tour around the outside of the 64,000m³ National Australia Bank and the surrounding Docklands Park.

18. Using the National Australia Bank building as an example, Mr Haycox explained that all roofwater was channelled through an attractive bio-swale system before being piped to the wetlands in Docklands Park for further treatment prior to storage. Similarly, stormwater landing on the streets was captured and drained to the trees at the side of the road, which acted as "mini bio-filters" by removing the nitrogen and phosphorus, before being piped to the wetlands and thence to underground storage. The treated stormwater in the storage areas was then used for irrigation of the parks in the precinct. Up to 10 million litres of stormwater was treated each year, with each storage area holding up to 550,000 litres at any one time. The park itself was an attractive space, with the wetlands and urban art providing features of interest and a public amenity.

Seminar at Monash University

19. In the afternoon, the Committee took part in a discussion session with a group of academics from Monash University at the Clayton Campus. The Monash attendees were: Dr Grace Mitchell, Dr Tim Fletcher and Dr Ana Deletic of the Institute for Sustainable Water Resources; Dr Rebekah Brown of the School of Geography and Environmental Science; and Dr Bob Birrell of the Centre for Population and Urban Research.

20. The Monash representatives started by praising Australia's Cooperative Research Centre (CRC) Programme, an initiative funded by the federal government to bring together researchers and research users. The programme, which included a number of CRCs dedicated to water, had provided solid financial incentives for industry and the universities to work together, and had stimulated collaboration between the universities themselves. The industry was very much signed up to this kind of collaboration, not least because of the long-term drought problems.

21. By contrast, it was noted that it was difficult for British universities to work with the UK water industry, which tended to focus disproportionately on certain issues such as leakage at the expense of more visionary research. Part of the reason for this was that efficiencies resulting from innovation by water companies were effectively "taken away" by Ofwat at each five-yearly period review. Thus there was little for companies to gain, and much for them to lose, by investing in new technologies which were not guaranteed to succeed.

22. A practical example of where Australia's positive attitude to innovation had reaped benefits was the Lynbrook development, constructed in the mid-1990s. This development had included an innovative form of stormwater management, not dissimilar to that seen at the Docklands site, whereby stormwater was collected, filtered through wetlands and collected in a lake that provided a pleasant amenity for residents. Crucially, Melbourne Water had underwritten the economic risk of this innovation, pledging to replumb the whole area if it did not work. However, the scheme had proved economically beneficial for Melbourne Water which, along with the positive impact on house prices of a view over water, had generated momentum for the construction of more such developments.

23. On the issue of demand management, it was felt that there had been less incentive for UK water companies to cut demand since privatisation. By contrast, a business case for cutting water demand had been identified in Australia and the government, regulators, academia, industry and the public were all signed up to it. This attitude manifested itself in many different ways: for example, billboards around Melbourne alerted people to reservoir levels; the Deputy Premier of Victoria had become a champion of water issues; and the media was very much involved in the drive to heighten awareness of the problems presented by the ongoing drought.

24. These initiatives had combined effectively with the psychological impact of some restrictions on water use and the use of rising block tariffs, whereby households were charged a progressively higher unit cost for the water they used above a certain threshold. Because of this combination of factors, water saving devices had become very popular amongst the public. Devices such as water butts were thought to be almost "fashionable". There was also praise for the new Water Efficiency Labelling and Standards (WELS) Scheme, under which water-using appliances and fittings would carry a "star" rating indicating their comparative water efficiency alongside an estimate of their water consumption. The UK could learn lessons on all of these issues.

25. Finally, the issue of desalination was discussed. Although low-energy desalination would be desirable if it could be achieved, there was a general feeling that stormwater and wastewater were arguably easier to treat than salt water. Therefore, it was suggested that the primary focus should be on the latter for the time being, especially in the UK.

Presentation from Yarra Valley Water

26. In the afternoon, the Committee was welcomed to Yarra Valley Water's offices by the Chairman, Alan Cornell, and the Chief Executive, Tony Kelly. Mr Kelly gave the first presentation, explaining that Yarra Valley Water—which has a customer base of some 1.6 million people—was one of the three retail water companies providing water and sewerage services in the Melbourne area, all of which were state-owned but operated under corporation rules. It had originally been intended to privatise the three retail companies but this plan had been shelved indefinitely.

27. Faced with the current serious drought, and an expected long-term increase in temperature and decrease in rainfall, Mr Kelly explained that Yarra Valley Water was focusing above all on water conservation. This was by far the best way to cope with the twin challenges of population growth and water shortages, because as a concept it was socially acceptable, economically viable and ecologically desirable. Yarra Valley Water demonstrated that they had undertaken very detailed and comprehensive sustainability assessments of all aspects of their service provision.

28. The key to water conservation was behavioural change amongst the public, which was being addressed in Melbourne in the following ways: the introduction of permanent water saving rules; continuing community education; a rebate scheme on water-saving devices until June 2007; mandatory water efficiency labelling on appliances; water efficient plumbing for new homes (fittings, flow control valves); and funding for conservation initiatives such as Smartwater. In addition, the water companies were working with developers to reduce water use by up to 25 percent in new developments and with industry to help cut consumption. Work was also continuing on leakage reduction.

29. The Committee was particularly impressed by the company's Smart Accounts, introduced in 2004 to provide better information to customers about their consumption of water. Under this scheme, water bills[160] showed each household its consumption over the last quarter and compared this to its usage in each quarter over the last year. Furthermore, the bills enabled comparison of usage against the average for households of a similar size and against best practice levels.

30. Also in 2004, the company had introduced rising block tariffs, under which there were three "tiers" of water usage with the unit price increasing in three steps, including a five percent environmental contribution to help factor in externalities. The unit price for the first block of water, at 2004/5 prices, was A$0.75 per kilolitre; the price per kilolitre in the next block was A$0.88; and the price in the highest block was A$1.30. This clearly provided an additional spur for customers to keep their water use in check. There were a range of measures available to help vulnerable customers or large households having trouble paying their bills, although it was notable that family size and household income were not factored into the tariff structure.

31. Another initiative of interest, currently in the testing phase, was the Ecosaver retrofit programme whereby banks would offer discounts on loans to members of the public on the condition that the saving be spent on water efficient devices. This was felt to be a promising scheme because the customer would pay the same overall and no subsidies would be needed. Yarra Valley Water's end-use research had shown that using the most water efficient appliances could potentially reduce household non-seasonal indoor usage from 169 litres per day to 118 litres per day, which would clearly be a valuable saving.

32. Finally, the Committee was told about the new "star" rating for energy and water efficiency in homes. Under this initiative, promoted by the federal Government and picked up by the Victorian Government, all new houses would require a five star rating which could be achieved through the provision of one of the following: a rainwater tank connected to a toilet; solar power for hot water; or connection to the water utility's water recycling network.

Meeting with the Treasurer of Victoria

33. The Committee later went to the Victoria Department of Treasury and Finance, where we met with the Honourable John Brumby MLA, Treasurer of the State of Victoria, Minister for State and Regional Development and Minister for Innovation. He explained to the Committee that one of the key reasons that water was managed successfully in Victoria was the high level of bipartisan policy cooperation over the last 20 years.

34. Praising the changes to the way in which water was priced and traded, Mr Brumby noted that water was now being purchased for the cultivation of more high-value products such as grapes and almonds, which helped maximise the return on the water used. He also pointed to progress made by industry, for example the proposal to send recycled wastewater from Melbourne to Gippsland (a region east of Melbourne) for use in industrial cooling in place of fresh potable water, which would in turn be sent to Melbourne or put back into river flows.

35. Finally, Mr Brumby spoke about the success of VicUrban, which not only helped to deliver the sustainable development required by the Government, but also provided the Government with financial dividends. Moreover, the Government was entitled to instruct VicUrban on a particular project, although this would mean that the agency would be exempt from having to provide a commercial return.

Presentation from CSIRO

36. In the evening, the British Consul General, Peter West, hosted the Committee and some of the people with whom we had met, for dinner at his residence. Before dinner, the Committee was given a presentation by Colin Creighton, Director of the Water for a Healthy Country Flagship at the Commonwealth Scientific and Industrial Research Organisation (CSIRO). CSIRO received A$600m of federal government money and A$300m of external funding. In terms of water research, the focus was on three main areas: identifying better desalination technology; promoting a higher level of indirect potable re-use of water; and preparing for the impacts of climate change.

37. Mr Creighton told the Committee that there were three key issues facing water management in Australia: making the best use of water by finding the optimum balance between irrigation and ecology; enhancing water quality and tackling diffuse pollution; and identifying sustainable urban water systems. The presentation focused on the latter point, with Mr Creighton stating that the combination of population growth and climate change meant that Australia's main cities needed to find a reduction in per capita water consumption of 40 percent over 25 years and to find alternative water sources, not least through re-use. Demand management alone would not be sufficient.

38. Mr Creighton went on to discuss the individual situations in Perth and Sydney. In Perth, there were a number of options to address the problems presented by a drying climate: desalination; groundwater development; engineering redesign; enhanced water trading; tariff changes; and managed aquifer recharge. The latter would involve recharging aquifers with treated wastewater, which would have the added benefit of helping to improve public attitudes to drinking re-used water. In Sydney, meanwhile, Mr Creighton noted that demand management had been very successful and was in fact the cheapest of all the options if external costs were properly factored in. A desalination plant was also planned but he felt that this was problematic because it would not help to create a long-lasting community conservation ethic.

Wednesday 1 March

Tour of Caroline Springs

39. On Wednesday morning the Committee was welcomed to Caroline Springs, a very large new housing development outside Melbourne, by Tod O'Dwyer of Delfin Lend Lease, the development company. Construction of the new community had commenced eight years ago and completion was scheduled for six or seven years time.

40. Mr O'Dwyer told the Committee that water sensitive urban design was a key feature of Caroline Springs. The stormwater that fell on the development was collected before being delivered into Kororoit Creek and the ponds throughout the development, thus creating a community asset and improving the habitat for wildlife such as the endangered growling grass frog. The water was cleaned during passage through on-site wetlands, with a higher quality of water leaving the site than entering it. Of note, the ponds were maintained by Melbourne Water, which had a statutory duty to do so if the relevant asset had a catchment of more than 60 hectares. The local council was responsible for maintaining the other open spaces and, elsewhere, assets with catchments of less than 60 hectares.

41. This contrasted with the situation in England and Wales, where water companies were responsible for the provision of water and sewage services but not sustainable stormwater drainage systems. Therefore, it was easier for development companies to allow stormwater to drain into the sewers, where it became the responsibility of the water companies. There was thus little or no incentive for development companies to install sustainable drainage systems. However, it was notable that the proposed Code for Sustainable Homes encouraged the use of these systems, despite there being no clear institutional responsibility for their future maintenance.

42. On the issue of wastewater, Mr O'Dwyer acknowledged that Caroline Springs was served by a traditional sewerage system rather than any kind of re-use process, but he suggested that a different course might be taken nowadays because there had been significant technological advances in the last decade or so. Indeed, at Delfin's new development at Mawson Lakes in Adelaide, both stormwater and wastewater would be recycled and delivered to all properties—through a separate pipe—for irrigation, car washing and toilet flushing. There would be separate meters for recycled water and drinking water.

Presentation from the Ecological Engineering Company

43. In the afternoon, the Committee visited Professor Tony Wong and Dr Peter Breen of the Ecological Engineering Company, which was working on a framework for better urban design. Professor Wong explained that there were three water "streams" in the urban environment—potable water, treated wastewater and stormwater—which in turn related to the three priorities of water sensitive urban design: water conservation; wastewater minimization; and effective stormwater management. His presentation focused on sustainable management of stormwater.

44. Sustainable management of stormwater was felt to be relatively straightforward on green field sites such as Caroline Springs, because the water could be treated through large-scale wetlands and ponds. In urban areas, however, there simply was not enough space for this kind of system and it was therefore necessary to treat the stormwater on a "micro" scale as seen in the Docklands development. In particular, the use of trees as "bio-filters" was appropriate because tests had shown that they were as effective as normal soil at removing nutrients and heavy metals, and the trees themselves in fact helped to maintain the porosity of the soil around them. Professor Wong added that it was important to engage local residents on such projects, ensuring that they understood the processes and felt a sense of ownership. It was also extremely valuable to bring water into the public domain by making it highly visible in the ponds and wetlands, because it helped to ingrain in people's minds that water is a precious natural resource.

45. If this kind of stormwater management was to become widespread, it was important for local, state and federal government to set catchment-wide water management goals and to increase the provision of guidance on best practice and run-off quality. Guides for designers were also felt to be of value, but it was important to allow scope for innovation.

Meeting with Professor John Langford

46. Subsequently, the Committee visited Professor John Langford, Director of the Melbourne Water Research Centre at the University of Melbourne. He emphasised the importance of careful allocation of water because, with the growth in demand and the impact of climate change, there would be greater competition for resources between household and industrial use, irrigation and the environment. It was therefore important to establish water markets that allowed reallocation of water between users and sectors, and the separation of water rights from land ownership had been valuable in this regard. He also felt that the rigour of financial accounting should be applied to accounting for water resources.

47. On demand management, Professor Langford told the Committee that universal metering helped to drive down water consumption in the short-term but that, after four to five years, consumers' behaviour tended to revert to what it had been before. It was therefore essential to reinforce the conservation message, which could be achieved by user pays pricing—including the rising block tariffs discussed above—and by initiatives such as making mandatory the installation of dual flush toilets in new bathrooms. Combined with continuing public awareness campaigns, these initiatives had proved remarkably successful in Australia; for example, Sydney had accommodated 700,000 additional people since 1982/3 while average annual demand for water had remained essentially the same. Melbourne had also reduced the average per capita demand significantly.

48. However, the "low hanging fruit" had now been picked and making further progress in demand management was becoming increasingly tricky. Apart from anything else, it was difficult for a water utility that makes money out of selling water to sell less of it, thus reducing profits. It would therefore be desirable to provide financial incentives to companies to promote water efficiency because, unlike with heavy regulation, this would stimulate innovation. Currently, however, Melbourne had a target of reducing per capita consumption by 15 percent by 2010 yet there were no rewards or penalties in place.

Presentation from the Water Services Association of Australia

49. The final meeting of the day was with Ross Young, Executive Director of the Water Services Association of Australia (WSAA). The WSAA is the industry body for water companies but also has a role in research along the lines of UK Water Industry Research (UKWIR). Recently the WSAA had commissioned a report to develop a methodology for the assessment of sustainability in water management in Australia. This study was undertaken by specialists from the Centre for Water and Waste Technology (University of New South Wales, Sydney), the Sustainable Water Division of the New South Wales Department of Commerce and CIT Urban Water (Chalmers University, Sweden).

50. Setting out the context of water management in Australia, Mr Young reported that agriculture accounted for 67 percent of the water used whereas domestic consumption only accounted for nine percent. However, he noted that politicians were notoriously reluctant to take any action to change water allocations because it would be electorally unpopular. Of the water used in households, 44 percent on average was used outdoors—mainly because of the long, hot Australian summers and the popularity of "English-style" gardens that required large amounts of water—which was far higher than in the UK.

51. Having provided an outline of the projected population growth in Australia's cities and the implications for water demand and supply, Mr Young addressed the issue of competition in the water industry. Although competition was virtually non-existent because of the water companies being state-owned, certain third party access rights were being introduced in Sydney, whereby private companies would be able to take on customers and then extract a proportionate amount of sewage from the mains sewerage system. This would then be treated and might be passed on to industry, for example. However, there was a danger that private companies might "cherry-pick" the easiest or most profitable opportunities, thus unfairly disadvantaging the existing utilities.

52. Finally, Mr Young displayed considerable caution about increasing the use of desalination as the sole solution. The costs had decreased in recent years but the rate of decrease was slowing, and there were considerable concerns from the community about the high energy requirements (and thus increases in greenhouse gas emissions) and the impact of brine discharges on the marine environment. Moreover, there was a danger of engendering a perception amongst the public that there was an endless supply of water, which would most likely have an adverse impact on attitudes towards water conservation.

Thursday 2 March

Presentation from Sydney Water

53. On Thursday the Committee arrived in Sydney, where we were welcomed to the offices of Sydney Water by Judi Hansen (General Manager, Sustainability) and Tom Gellibrand (Manager, Urban Growth). Sydney Water was a state-owned corporation whose prices were set by the Independent Regulatory and Pricing Tribunal. The company purchased water from the Sydney Catchment Authority—an agency of the New South Wales Government—and delivered it directly to customers; in other words, there were no separate retail companies unlike in Victoria. Sydney Water also treated the bulk of Sydney's wastewater at its treatment plants on the coast, with a portion of the bio-solids being re-used by agriculture. Interestingly, there were few difficulties with public attitudes about this kind of re-use of bio-solids from sewage treatment, unlike in the UK.

54. Ms Hansen proceeded to outline Sydney's Metropolitan Water Plan, which set out the city's plans to secure supply and reduce consumption over 25 years. Sydney was expected to accommodate an additional one million people by 2031, with approximately 23,500 additional dwellings being built per year. The main supply options to meet this extra demand were: increasing water transfers; accessing deep water in existing storages below the current outflows; investigating the groundwater supply; providing desalination for drought and long-term water supply; and recycling of wastewater, although only for non-potable uses at this point in time because of public acceptance issues.

55. On water conservation, Ms Hansen noted that the company had retrofitted 300,000 properties with water efficiency devices at a heavily subsidised charge of A$22 per household (or free of charge for certain low income households). This included the provision and installation of a water efficient showerhead, tap flow regulators and toilet cistern flush arrestors—as well as the repair of minor leaks. This had resulted in an impressive average saving of 20,900 litres per household per year (approximately 12 percent of average indoor water use), a figure which showed little signs of declining over time. This amount of water also equated to an annual saving of three tons of greenhouse gas emissions per household per year. Overall, Sydney Water's Demand Management Programme had cost A$107m since 1999 and, as of 2005, a total of 34,600 megalitres per year was being saved.

56. The State Government had also implemented a number of initiatives aimed at cutting water use. The Water Saving Fund had provided financial incentives for businesses to save water. The BASIX (Building Sustainability Index) scheme, meanwhile, had required all new houses built in Sydney—and alterations or additions to existing homes—to reduce their mains water consumption by 40 percent compared to the current average for similar sized homes. In order to meet this target, builders could install water efficient fittings and rainwater tanks, or connect to a recycled water supply where available. Moreover, from 2007 a minimum level of water efficiency would be required when a dwelling is sold, a level which could be achieved through Sydney Water's retrofit service.

Friday 3 March

Presentation from the Institute for Sustainable Futures

57. On Friday morning the Committee visited the Institute for Sustainable Futures (ISF) at the University of Technology Sydney. The Director of the ISF, Professor Stuart White, and Research Principal, Ms Andrea Turner, explained that the Institute worked with industry, government and the regulatory authorities to undertake applied research and feed into public policy.

58. Professor White focused on the concept of Integrated Resource Planning, which says that water is a derived demand whereby people need the services it provides rather than the water itself—so saving water through investment in improved efficiency or substitution has the same effect as increasing supply. Accordingly, the role of utilities should be redefined as one of service provider rather than commodity supplier. Cost reflective pricing was necessary but not sufficient; a disaggregated understanding of water use was needed, including end-use analysis, to identify the best ways of reducing usage.

59. The ISF had undertaken very detailed studies of the economic and energy implications of introducing individual demand management measures and of exploiting new resources. Case studies had shown how certain measures could be optimally introduced in stages and how some schemes (such as retrofitting rainwater collection for garden irrigation) were not always the best option. There were also major differences between the effectiveness and efficiency of options for new buildings and retrofitting in existing properties. The ISF approaches predominantly focused on economic cost-effectiveness and in some cases had also used sustainability assessment based on multi-criteria assessment, coupled with deliberative processes.

Meeting with Blair Nancarrow

60. The following meeting, with Blair Nancarrow, Director of the Australian Research Centre for Water in Society at CSIRO Land and Water, covered the social components of water management. She noted that the social aspects of water use were often neglected, with the task of involving the public all too often occurring only after major water management decisions had already been taken. Social research was essential in understanding the drivers of people's decisions and behaviour and therefore the limitations to particular courses of action; difficulties often started to crop up when initiatives began to impinge on people's lifestyles.

61. Turning to her research, Ms Nancarrow discussed some of the difficulties presented by public attitudes to water. For example, on the issue of recycled wastewater, she had identified a "yuk" factor which is an emotion brought about by thoughts of human waste products. Information and education had little impact on people's intention to drink treated wastewater or eat products grown with treated wastewater, and the emotional component had a significant influence on these decisions. Interestingly, people were more willing to consider drinking recycled wastewater if it first went through a managed aquifer recharge process or into a short length of river; the interaction of the treated wastewater with nature reassured the public about its quality.

62. Asked about the implications of the Water Framework Directive in the UK, Ms Nancarrow noted that Australia was at the forefront of integrated catchment management, as demonstrated by the success of the grassroots-led Landcare movement. However, she warned that historically there had been too large a distance between federal funding and the stakeholders on the ground, with funding often reputedly being siphoned off by states rather than reaching those stakeholders. By contrast, she pointed to the National Action Plan for Salinity and Water Quality (NAP) which was bringing together all levels of government, community groups, individual land managers and local businesses to tackle these issues and for which the funding would be more effectively delivered.

Tour of Warragamba Dam

63. The final engagement of the visit to Australia was a tour of Warragamba Dam, which alone accounts for around 80 percent of the region's available water supply. Water is collected from the catchments of the Wollondilly and Coxs River systems, covering an area of 9,050 square kilometres, to form Lake Burragorang behind Warragamba Dam. The Committee was given an introductory talk by Graeme Head, Managing Director of the Sydney Catchment Authority, before being given a tour around the dam.

160   An example of which is reproduced on page 76. Back

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