Why Utilities should be Focusing on Demand-side Management

The path to improved water reliability does not rely solely upon supply-side management strategies. In fact, demand-side management strategies can overhaul the fundamentals of what we consider water supply reliability. 

In this era of rapid population growth and changes in consumer demand for water, I believe that utilities should be directing their efforts toward demand-side management strategies. 

Below, I share my thoughts on:

• The decoupling of demand and population growth 
• What demand-side management means for utilities 
• The problems with focusing on supply-side management strategies 
• The elasticity of demand and how to augment reliability strategies for the future

The demand for water has been rapidly falling and actually stabilizing over the years despite population growth. In fact, demand and population growth have actually been decoupling over the past few decades.

As technological advancement drives forward and as communities face different water stressors that include droughts, flooding, and infrastructure disruptions, they have started to use less and less water.

Hand in hand, this means that even though populations in many parts of the developed world have grown significantly, the demand for water has not been increasing in parallel. In general, people have become a lot more efficient in the way that they use water. For example, the new generation of dishwashers and washing machines that we use in our homes use a lot less water than they did 20 or 30 years ago.

The question is this: If demand is not driven by population growth, what other factors are impacting water demand? And, how will that dictate how much water supply we’ll need in the future?

That’s where the concept of demand management comes into play and how utilities — when they consider water reliability — can switch from a perpetual search for more water supplies to focusing on changing the baseline on demand, and reducing demand in different ways.

We think about water reuse and recycling as a water supply augmentation strategy. However, the reality is that reusing and recycling water, though a “small-scale” strategy, can, on a building and neighborhood scale actually reduce demand and the baseline demand. In turn, this changes the fundamentals of water supply reliability.

As utilities attempt to create more water reliability by focusing on supply-side management rather than demand-side management, it’s possible that they’ll end up focusing more on building large centralized infrastructure. This is in place of focusing on smaller solutions that can impact and enhance their water reliability and create more water overall.

For example, utilities might not be as motivated to address leak management, consider reuse at every scale, or to reduce baseline demand by implementing different strategies. Ultimately, this is because their business model centers on building reliability through the supply side of the equation.

Demand-side management is not only the cheapest and most economical way of building water reliability, but it can also be one of the most environmentally friendly approaches to building water sustainability in the long run.

The key to building a more resilient and reliable water future for utilities is to realize that demand is much more elastic than they imagine since it’s impacted by more than just economics, demographics, and climate. Demand changes when people use water in different ways in their homes, and reusing at different scales in homes can change water demand in many ways.

For example, we use about 30% of the water in our bathrooms to shower and wash our hands. This water is perfectly fit — with very little treatment — to be used for toilet flushing, which does not require high-quality drinkable water. If we redirect that 30% to toilet flushing, our water use can immediately be reduced by 30%.

Utilities can face many challenges as people transition to these distributed solutions. For example, as we focus more on leak management, demand reduction, and reuse and recycling on every scale, the amount of water that moves in our pipes and the way we distribute water can be impacted significantly. This then means that we need to use data and technology to track how much water people are generating.

This data will allow us to glean insights into how this impacts the amount of water that they take out of centralized systems and how much water people generate at different times of the day and year. This then raises the question of whether there would be a need for on-demand storage within a local community that can augment some of the community’s water demand. 

As we introduce distributed water solutions at every scale and as we consider demand-side management as a strategy for the utilities of the future, we’re going to build these hybrid water supply systems which require a totally different mindset in terms of their management and operation. 

For example, we’ll need to know when, where, and how much water is generated, where it’s needed, and how it needs to be delivered. A smart grid that can track distributed production and consumption patterns is a key part of this process.

We’ll also need to consider the type of infrastructure we’ll need to invest in. Should we invest in hard, centralized infrastructure, or should we work with people at different scales to incorporate solutions in their homes, neighborhoods, and communities? 

Additionally, we’ll need to consider whether we need to invest more in soft infrastructure like data, information technology, and decision support tools rather than relying on centralized infrastructure.

Ultimately, this will impact the business model of the utilities. The utilities of the future are going to be a lot more circular, data-driven, and customer-focused.

Newsha Ajami is Chief Strategy and Development Officer for Research at Berkeley Lab Earth & EESA and is one of many experts that we co-create Qatium with.