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Where are urban water services in Europe heading?

About the blog

Mariano Blanco
Industrial Engineer by the University of Seville, Master in Structural Calculation by the École Centrale de Paris, MBA by the San Telmo International Institute, PHD by the University of Cadiz, Higher Programme in Financial Management by the EOI.

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  • Where are urban water services in Europe heading?
    Credit: González-Cebrián/SWM

The question in the title, although generic, has a series of answers based on concrete vectors of progress that are nothing more than solutions to the sector's current problems. In limiting the answer to our continent, we must take into account the European voice of water, the EurEau federation, which represents 33 countries - with their various national urban water and sanitation associations - before the European institutions.

We have recently approved a document in the form of a Manifesto, which has sought to give visibility in a consensual manner to the main current “challenges” of the sector, as well as to serve as a platform to establish a series of “success factors” that will help to achieve the above challenges.

The challenges are summarised by stating that “the urban water sector has the ambition to play a leading role in Europe's journey towards building a climate neutral, circular, smart and resilient society.” This may sound like a grandiloquent phrase, but it has its value in that it is the product of the consensus of the different European countries in which, on the one hand, public and private operators coexist, and on the other, there are very different climatic and supply conditions that vary substantially between the countries of the north, the central, eastern and Mediterranean arc, in addition to other social, economic and environmental characteristics that make the management of water supply have significant differences.

In the last two decades, we have been making progress in the sector thanks to a series of vectors that I list (using their Anglo-Saxon terminology): Smart City, Efficiency, Circular Economy, Sustainability, Affordability, Sustainability, Energy Neutrality, Governance, Resiliency, European Green Deal, Taxonomy, Digitalisation, etc. Each of these terms has brought a trend or a strategy that has served to make progress in improving management. What is rarely talked about is “profitability”, something inherent to management, whether public or private, and its different social, environmental and economic variants.

We must move towards a guarantee of full cost recovery, including the maintenance and renewal of existing infrastructure and new investments

All of the above has done nothing more than build a path towards a sophistication of the latest generation of environmental policy and challenges, which on the other hand leads us to achieve the objectives that I at least call “classics” in the sector: Continuity, Quality, Respect for the Environment, Cost Coverage, Efficient Management and Innovation.

The idea behind the Manifesto drafting exercise has been “to get water utilities to work by leveraging the use of innovative technologies and practices, digitising their operations, maximising their energy efficiency and renewable energy generation potential, while recovering nutrients and materials from wastewater and drinking water treatment flows”, i.e. to carry out the implementation of the above-described fashions in concrete lines of work.

Finally, the need to reclaim wastewater (irrigation, urban and industrial uses, aquifer recharge, cleaning, hydrogen generation, etc.) is starting to be talked about loudly in Europe, which will help to combat the growing water scarcity in Mediterranean countries, despite the fact that in Spain we are already leaders in Europe with reuse rates close to 15%; worldwide we are only surpassed by Singapore, Israel and California where rates close to 60%-80% are reached. The EU’s new Wastewater Treatment Directive has put the emphasis on advancing the circular economy for the generation of phosphorus, nitrogen and carbon, as well as for the recovery of cellulose, bioplastics and other materials; in short, we are transforming our wastewater treatment plants into resource recovery plants. These policies are welcome, but it is necessary to underline the need for targeted fiscal and financial support to undertake the associated investments.

Water services have changed substantially over the last decades, many of the solutions we apply today are energy and resource intensive

The task ahead is not easy in an environment characterised by many other challenges: persistent droughts, strong random storms, rising sea levels, the presence of dangerous and persistent chemicals in the urban water cycle, new security and cybersecurity challenges, critical infrastructure, artificial intelligence (AI), and so on. All these constraints require far-reaching adaptation measures.

From this holistic reflection, a question arises: how can we work at the level of European and national authorities to ensure that effective and positive change is achieved? Well, in order to answer this question, we at EurEau have defined a series of “success factors” that have been worked on by operators in Spain for some time and are worth emphasising so that society and interest groups become more aware; they are as follows:

Establishing an adequate regulatory framework

The improvement of our regulatory framework is necessary to achieve greater guarantees for the execution of investments, the continuous improvement of the quality of services, wider coverage of costs and legal certainty that guarantees long-term management; the management of water and sanitation in the short term usually suffers from a lack of investment capacity. These new challenges and opportunities should help to implement new governance by providing incentives, stimulating innovation and encouraging the development of new business areas related to activities such as energy production and storage and the recovery of nutrients and raw materials, in line with the objectives of the European Green Pact.

Securing long-term funding and resources

In our country there is a clear need to renew the existing infrastructure, as the indices of the sector show; without adequate funding, we will not be able to achieve this. We must move towards a guarantee of full cost recovery, including the maintenance and renewal of existing infrastructure, new investments, innovation costs and the development of new business areas; in my opinion, the so-called 3T methodology of the OECD (Organisation for Economic Co-operation and Development) is the right way forward, as well as the full implementation of the “Polluter Pays Principle” including the application of “Extended Producer Responsibility”.

Attract competent professionals and gain social recognition

To efficiently manage our assets, it is essential to further improve the quality of staff; authorities and operators must better explain the value of well-managed water services to society, so as to attract motivated employees and attract talent by making the sector more attractive.

Develop innovative solutions and increase motivation for change

Water services have changed substantially over the last decades, many of the solutions we apply today are energy and resource intensive. Innovation is needed to meet today's challenges: digitalisation, artificial intelligence, etc.

Preventing pollution at source

Preventing the release of pollutants into drinking water and wastewater resources is the most effective way to ensure the sustainability of water services. Pollutants such as nitrates, pesticides or PFASs significantly increase the carbon footprint and energy consumption of operators, while generating waste that is difficult to treat, limiting circular economy options.

In conclusion, we can say that this task is far from easy; the challenges are extensive and multifaceted, yet the responsibility ultimately rests with us as operators, alongside governance as a critical lever for driving change. Both state and local governments have a substantial role to play in fostering these developments by thoroughly reviewing the core powers and functions of the companies that provide these essential services. This process includes a detailed examination of various factors, such as the risks associated with non-compliance, the ownership and stewardship of assets, the specific terms of contracts, and other crucial regulatory aspects.

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