Evaluating the impacts of participatory planning for urban water ...
Evaluating Water Risk Information to Motivate Action...Evaluating Water Risk Information to Motivate...
Transcript of Evaluating Water Risk Information to Motivate Action...Evaluating Water Risk Information to Motivate...
Evaluating Water Risk
Information to Motivate
Action
Will Sarni
Director and practice leader, water strategy
Deloitte Consulting LLP
@willsarni
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Water scarcity in 2025 – we arrived early
Source: Center for Environmental Systems Research, University of Kassel, www.usf.uni-kassel.de
people, or almost half of the world's
population, live in areas of physical scarcity
and/or face economic water shortage
$17 trillion
22% of Global GDP is currently
generated in water-scarce areas.
By 2050 it will be 45% 3.3billion
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Water is
needed to
generate
energy
Energy is
needed to
extract, treat
and transport
water
The water, energy and food nexus
Water for energy
Energy for water
Water and energy for
food
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Water scarcity trajectory – anopportunityto“deflect”
We need more
It’salready
having an impact
It’sglobal
All sectors
Power & Utilities
Oil & Gas
Energy Intensive
Industries
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The past is not a guide to the future
Scarcity impacts economic and business
growth
Public policy will align with the “new
normal”
Scarcity drives innovation – “business
ecosystems”andtechnology
Data analytics are essential for a fact
based dialog with stakeholders
October 13, 2015
Abnormally dry (18%)
Moderate Drought (15%)
Severe Drought (15%)
Extreme Drought (19%)
Exceptional Drought (8%)
The public sector and water risk - have we learned?
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Public policy and long term strategy
Set a statewide water
reduction target of 20% per
capita by December 31, 2020;
passed a $7B water bond and
new groundwater legislation in
2014; Adopted mandatory
conservation requirements for
urban water suppliers in 2015
Launched a $2 billion
infrastructure fund that will
focus solely on water projects
California Texas
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The private sector and water risk
2015 World Economic Forum
8 Copyright © 2015 Deloitte Development LLC. All rights reserved.1 – “Watching Water,”JPMorganChaseGlobalEquityResearch,April.2008
How the private sector views water risk
Physical
Regulatory
Reputational
Operations Product UseSupply Chain
Water scarcity
drives up input
prices (~2%-20%)
Increased capital
expenditure on
water treatment,
extraction or
alternative
technologies
raises costs
Non-availability or
scarcity of water
required for using
product or service
limits growth
Suspension or
withdrawal of
supplier's water
license or
discharge permits
disrupts supply
chain
Reallocation to
more urgent
needs during
drought disrupts
operations
Restrictions on
use of particular
products or
services due to
water intensity
raises costs or
checks growth
Responsibility "by
association" for
suppliers' water
pollution damages
brand or
reputation,
hinders growth
Competition with
household
demands, or
pollution
incidents,
damages brand or
reputation,
hinders growth
Public outcry
regarding water
intensity of
product damages
brand, reputation,
hinders growth
Financial Impact
Lost revenue
Higher costs
from:
− Supply chain
− Changes in
production
− Capital
expenditure
− Regulatory
compliance
− Increasing price
of consuming or
discharging
water
Delayed or
suppressed
growth
Potential higher
cost of capital
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− Incorporate water risk into‘traditional’
corporate risk management processes
−Quantify the “real” value of water to the
business
−Understand the energy-water nexus and its
potential business implications, set targets
across the value chain
− Increase focus on engagement and
innovation
−Look for opportunities in the overlaps
−Make a public commitment to water
stewardship
−Practice “radical transparency” about water
and seek opportunities to collaborate – or
clear the (internal) path for collaboration
Getting Ahead of the “Ripple Effect” A Framework for a Water Stewardship Strategy. W. Sarni, Deloitte University Press. 2013
Water stewardship strategy to address water risks
10 Copyright © 2014 Deloitte Development LLC. All rights reserved.
“Fuelinggrowth”– defining leadership
INCREASING VALUE AND COLLECTIVE ACTION
No strategy
• Water scarcity not
acknowledged as an
issue
• All resources treated
equally
• Cash flows heavily
weighted
• Market price of water
governs decisions
Efficiency strategy
• Water scarcity as a
driver of cost
• Consider cost of
acquisition and use of
water
• Heavily weight
profitability risk
• Focus on water
conservation
• Set internal water
efficiency goals
License-to-grow strategy
• Quantify value of
water
• Proactively drive
business
“ecosystems and
“aligned action”
• Innovation - develop
product/service
offerings that
address water
scarcity
• Internalize
externalities
• Manage water scarcity
as a platform for
growth
• Participate in water-
related policy
development
Risk strategy
• Manage water scarcity
risk at the facility or
business-unit level
• Pursue stakeholder
engagement to
improve water access
• May calculate full cost
of water
• May participate in
public policy
formulation
• Ad hoc investment in
technology innovation
• “Sociallicense-to-
operate”risksheavily
weighted
Fueling Growth: You Can’t Always Buy What You Need. W. Sarni. Deloitte University Press. 2014.
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Informed decisions based upon transparent data sets
Water Infrastructure and
Customer Analytics
State-wide Economic
Value of WaterReputational Risks –
Social Media Sentiment Analysis
Business Value at Risk and
Supply Chain Analytics
Private sector reputational risk – social media
Social Conversations: Volume Trend
A
B
Top Sources Top Terms
B
A
Rank Brand Posts Net Sentiment Positive Negative
1 XXXXX 40,900 -41.2% 29.4 70.6
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R&D
Supply Chain Risk Framework
Macro environment risksHave potential effects across the entire supply chain
Extended value chain risksOriginate in upstream and downstream supply chain partners
Economic
$ € ₤ ¥
Geopolitical Quality & Safety
!
Regulatory
Functional risksExist among enabling functions that support supply chain processes
Human Resources Information TechnologyFinance
$$$
Legal
Operational risksRelate to internal process risks
SourceDevelop Plan Make Deliver/Return
SupplyTier 2
DemandEnd Users
Environmental/Social
Responsibility
Tier 1 11
Distributors3rd Party Services
SecurityInfrastructure /
Resources
Marketing
Supply chain riskthinkingand“sustainability”
In our experience, companies place focus on identifying risk with the biggest immediate impacts on cost and
performance. Environmental and Social Responsibility related topics receive the least focus. .
People Process Technology
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Business value at risk – supply chain
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Copyright © 2015 Deloitte Consulting LLC. All rights reserved.
Public sector water management dashboard
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Collected data from a variety primary sources across Florida to develop a
compelling set analytical dashboards
FDACs - overview of approach
Develop integrated database Create visualizations Collect data
Our approach
• Florida Statewide Agricultural Irrigation
Demand Report and Geodatabases
(2015) and supporting technical memos
• Water Management District (WMD)
Regional Water Supply Plans
• Water Withdrawals, Use, and Trends in
Florida
• NOAA National Climatic Data Center
precipitation data
• USGS Statewide Evapotranspiration
Data
• Combined data from a variety of datasets
into a single, integrated database
• Required reformatting and moving data
from a pdf, excel, and text files into a
single, readable format
• Allows data to be queried at a variety of
levels (state, WMD, and county), sectors,
and timeframes (2015 – 2035)
• View projected water demand metrics at
the state, water management district, and
county level by year and usage category
• Create alternative scenarios specific to
agricultural water demand based on
changes in crop type acreage, irrigation
efficiency
• View and prioritize water conservation
and supply projects based on estimated
costs, benefits and other criteria
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Enables users to build out an optimum water supply and demand scenario
using external factors and observe their effects across a 20 year time
horizon
Water Scenario Analysis
Allows users to visualize cross-sector tactics to reach water saving goals
based on multiple metrics such as Feasibility, Urgency, Capex
Tactic Prioritization
Allows slicing and dicing of WMD, FSAID and Regional Water Supply data
to analyse current and future water supply vs demand metrics by county
and WMD
Water Demand and Supply
Helps users to further understand Water Saving Tactics needed in the
Agricultural sector by County in order to achieve Water Saving goals
Agricultural Tactic Prioritization
Developed four dashboards that allow FDACS to understand current and
projected scenarios, run scenario analysis, and prioritize efficiency tactics
FDACs dashboards examples
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Water Withdrawals: Surface and Ground water
California dashboard
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Water analytics: predictive asset maintenance
AAsset/Functi
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fa ctore n Sta ti sche D yna mi scheGrond
fa ctore n fa ctore nve rza kking
Omg e ving s A sse ts Onde rhoud-H e rstelling s -
fa ctore n e i g e nscha ppe nL e e f tijd SI w a a rde
histori e k
histori e kD rukwisselin g e n C o n d itie H e rg e bruik
D i e pte Be g roeiing Onde rg rond Wa te rsta ndVe rke e rs
Be stra ting Le ng teM a te ri a a l Constructi e j a a r D i a me te r Wa nddikte T ype koppelingL e ve ra n c ier/
be l a s ting me rk
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Be stra ting
Le ng te M a te ri a a l Constructi e j a a r D i a me te r Wa nddikte T ypekoppeling
L e ve ra n c ie r/
W be l a sting
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ve rza
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Le e ftijd SI w a a rdeO n d e rhoud-
H e rstellin g s -D rukwisseling e n Conditi e
H e rg e brui khistori e k
Slijt
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Sta ti
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fa cto
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fa cto
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Omg e
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fa cto
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A sse t
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e i g e nsc
ha ppe n
merk
Risk Analysis Tree Spatial Mining
Optimized investment program
GIS visualization
Operations
Expertise
Efficiency
Benefits
Financials
• OPEX reduction: Millions
• CAPEX reduction: Millions
• Reduced leakage
• Reduced interruption of service
• Reduced hindrance due to works
• Deep and data driven insights in
the life cycle of the assets
• Improved data quality
• Supply chain optimization (procurement
strategy, material management)
• Optimal allocation of scarce resources
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Automated notification, real-time asset condition monitoring
Predictive asset maintenance
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Asset Management Planning (AMP), Scenario simulation, Budgeting
Predictive asset maintenance
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The solution provider market forecast
8.9 %
14.7 %
Global growth of the desalination market
from 2013 to 2018
Global growth in smart meters market
from 2014 to 2019
25 % Monitoring forecast and control
24 % Organic nutrient and solids
treatment and 16 % Metals or organics
remediation or reclamation
5 % Desalination and 5 % Leak repair
and pipe replacement
Start ups
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