Monday, April 16, 2007

Economics of Rainwater Tanks in Australia

Oxygenics Water-Saving ShowerheadA report on "The economics of rainwater tanks and alternative water supply options" suggests tanks could delay the need for water desalination plants, particular when the energy costs of such plants are considered. The report was prepared by economics consultants, Marsden Jacob Associates for the Australian Conservation Foundation, Environment Victoria and the Nature Conservation Council of NSW.

One shock in store for house holders is that water from a rainwater tank costs at least $2.15 per kilolitre and possibly much more, taking into account the cost of the tank. But then the bigger shock will be that water from desalination plants costs around this as well. State politicians seem reluctant to tell voters that water is going to have to at least double in cost in the next few years.

The only flaw I can find from a quick skim of the report is that demand management measures are not given more weight. The report points out that saving water is cheaper than water tanks or desalination plants, but does not seem to go on to quantify this. This confusion seems to extend to the general community, where people are considering thousands of dollars on water tanks, before they have spent hundreds on a dual flush toilet and low flow shower.

The full text of the report is available online, but it is a large (1Mbyte) PDF document. The issue is an important one and the authors should take the trouble to produce an easier to access version of the document. They could at provide the Executive Summary in a separate PDF file, which would take a few mouse clicks to produce, or better still as a web page, which would take a few minutes work.

Here is the Table of Contents of the report:
Executive Summary 4
1. Introduction 8
2. The relative cost of rainwater tanks 9
2.1. Rainwater Tank yields 9
2.2. Cost of rainwater tanks 11
2.2.1. .Rainwater tank costs 12
2.3. Cost of alternative water sources 12
2.3.1. .Case Studies: Sydney and SEQ 14
2.3.2. .Summary 15
2.4. Other potential impacts 16
2.4.1. .Water mains 16
2.4.2. .Stormwater systems 17
3. Adding environmental costs to levelised costs 19
3.1. The cost of carbon 20
4. Deferring alternative water sources with rainwater tanks 22
5. Cost of rolling out rainwater tanks 31
6. References 33
Some excerpts from the Executive Summary:
Marsden Jacob Associates (MJA) has been commissioned by the Nature Conservation Council of NSW, Environment Victoria and the Australian Conservation Foundation to conduct research into the impact of a targeted rainwater tank roll-out in Sydney, Melbourne and South East Queensland (SEQ).

For individual property owners, the cost effectiveness of rainwater tanks is typically determined by comparing the cost of installing and operating a rainwater tank against savings from household water bills plus the impact of garden water restrictions. However, considering the benefits only from the perspective of the property owner does not recognise the broader cost savings to the community such as deferred water infrastructure, savings to stormwater infrastructure, and environmental externalities such as the cost of greenhouse gas emissions.

The present study compares the yield and levelised cost (i.e. the cost per kilolitre supplied) of various long term water source options in Sydney, Melbourne and SEQ against the potential yield and cost of rainwater tanks. Previous research by MJA for the National Water Commission indicates that both the yield and the cost of tanks varies significantly based on individual household variables - in particular the size of the roof collection area. This study compares the cost of rainwater tanks with other water infrastructure such as dams and desalination plants. Levelised cost (the cost per kilolitre of water supplied) is a factor of water yield from a particular technology and the cost of supplying it. Yield from a 5 kilolitre tank for a small (50m2 ) and large (200m2) roof collection area was shown to vary from around 47 kL to 105 kL in Sydney, 24 kL to 86 kL in Melbourne and 41 kL to 99 kL per year in Brisbane (airport sites only).


In addition, the key findings of this report include:

rainwater tanks will be widely installed in new housing developments due to regulations imposed by both the Queensland and NSW governments. While new dwellings can be designed to be 'rainwater tank-friendly', a growing proportion of future dwellings are expected to be in high density unit blocks which are mostly unsuitable for rainwater tanks (although the majority of new dwellings since 2001 have been detached 'rainwater tank-friendly' dwellings). However there is also significant potential for take-up of rainwater tanks in existing dwellings. The majority of existing dwellings, particularly in SEQ, are detached houses, making them suitable in theory for rainwater tanks. Many may not accommodate a tank due to limited land area or plumbing constraints. There are currently around 1.1 million houses potentially suitable for rainwater tanks (i.e. detached and semi-detached houses)1 in Sydney and 0.9 million in SEQ.


Water sources could potentially be deferred by more than the indicated time if demand management initiatives reduce future demand, or may be deferred by less than the time indicated due to other factors such as the need for emergency water supplies or specific regional growth requirements. The deferral of water sources will be cost effective only to the extent that rainwater tanks are less expensive than alternative water sources ..

Similar results would be expected for Melbourne depending on the growth in the number of dwellings and the impact of demand management initiatives. Additional demand management initiatives could potentially defer the need for water infrastructure even further. ...

research indicates that rainwater tanks are more than five times as energy efficient as desalination plants per kilolitre of water produced (rainwater tanks requiring around 1 MWh/ML compared with a typical desalination plant requirement of 5 MWh/ML); ...

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