economic level of leakage (ell) - fondazione amga · 1 iwa water loss task force visit italy genova...

1IWA Water Loss Task Force Visit ItalyGenova – Ferrara 15-19 May 2006

Conferenze sulle Strategie di Gestione delle Perdite Idriche

Economic Level of Leakage (ELL)

Approaches to Estimating and Achieving ELLApproaches to Estimating and Achieving ELL

Stuart Trow – United KingdomLeakage Consultant

andDirector of CaL Solutions Ltd


Estimating ELL

Estimating ELL is one of the first things that should be done Estimating ELL is one of the first things that should be done before starting a major programme of investment in leakage before starting a major programme of investment in leakage managementmanagementELL estimation is an ongoing process ELL estimation is an ongoing process –– not a onenot a one--offoffThis presentation summarises the latest IWA thinking on ELL This presentation summarises the latest IWA thinking on ELL methodologiesmethodologiesI have been involved with leakage management in the UK for 27 I have been involved with leakage management in the UK for 27 years, and with target setting based on ELL for 20 years. Pleaseyears, and with target setting based on ELL for 20 years. Pleasetake the opportunity to ask questions take the opportunity to ask questions [email protected]@aol.com


An Economic Optimum

If little or nothing is spent on leakage control, the value If little or nothing is spent on leakage control, the value of the water lost will be excessiveof the water lost will be excessiveIf too much is spent on leakage control, the cost will If too much is spent on leakage control, the cost will outweigh the savings which result from the expenditureoutweigh the savings which result from the expenditureBetween these two extremes there is an economic level Between these two extremes there is an economic level of leakage at which the costs and benefits are optimisedof leakage at which the costs and benefits are optimised


Defining ELL

Report 26 1980:Report 26 1980: ““It is clearly uneconomic to ensure that pipelines and It is clearly uneconomic to ensure that pipelines and reservoirs will never leak. It is also clear that there is an ecreservoirs will never leak. It is also clear that there is an economic limit to the onomic limit to the loss of water that should be tolerated through leakageloss of water that should be tolerated through leakage””Managing Leakage Report C 1994:Managing Leakage Report C 1994: ““That level of leakage where the marginal That level of leakage where the marginal cost of active leakage control equals the marginal cost of the lcost of active leakage control equals the marginal cost of the leaking watereaking water””CIWEM Approach CIWEM Approach –– 2003:2003: ““Economic level of leakage can be defined, Economic level of leakage can be defined, -------- as as that level of leakage at which any further reduction would incurthat level of leakage at which any further reduction would incur costs in costs in excess of the benefits derived from the savingsexcess of the benefits derived from the savings””Latest WLTF Definition:Latest WLTF Definition: ““The level of water losses which results from a The level of water losses which results from a policy under which the marginal cost of each individual activitypolicy under which the marginal cost of each individual activity for managing for managing losses can be shown to be equal to the marginal value of water losses can be shown to be equal to the marginal value of water in the supply in the supply zonezone”” In other words: Do everything that makes economic sense and theIn other words: Do everything that makes economic sense and theELL is the level of leakage which results from such a strategyELL is the level of leakage which results from such a strategy


Time and Money

Water supply organisations carry out leakage control in Water supply organisations carry out leakage control in order to save moneyorder to save moneyIt is important to recognise that there are different It is important to recognise that there are different kinds of money; money is time dependentkinds of money; money is time dependentThe time horizon of leakage control expenditure is very The time horizon of leakage control expenditure is very important in the analysis of ELLimportant in the analysis of ELLIt also makes ELL estimation complicatedIt also makes ELL estimation complicatedThe new IWA methodologies attempt to simplify the The new IWA methodologies attempt to simplify the ELL process in a practical way based on experienceELL process in a practical way based on experience


Facts about ELL

ELL is specific to an individual water supply zoneELL is specific to an individual water supply zoneELL is time dependent; shortELL is time dependent; short--run and longrun and long--runrunShort run ELL is a function of:Short run ELL is a function of:

The current variable cost of water (CV)The current variable cost of water (CV)The cost of active leakage control interventions (CI)The cost of active leakage control interventions (CI)The Rate of Rise of unThe Rate of Rise of un--reported leakage (RR) reported leakage (RR)

Long run ELL is a function of:Long run ELL is a function of:The future cost of water The future cost of water –– depending on the available supplydepending on the available supplyThe changes in shortThe changes in short--run ELL due to cost run ELL due to cost -- effective effective investments on the water supply networkinvestments on the water supply network


Diminishing Returns

A fundamental fact about leakage control is that A fundamental fact about leakage control is that every possible leakage control measure follows a every possible leakage control measure follows a law of diminishing returns. law of diminishing returns. As more money is spent, the return in terms of As more money is spent, the return in terms of water saved due to lower losses, becomes water saved due to lower losses, becomes progressively less. progressively less. Some level of each activity will form part of an Some level of each activity will form part of an economic strategy. economic strategy.


Short, Medium and Long Term

Short term measures:Short term measures:Leak detection and repair Leak detection and repair

Medium term measures:Medium term measures:Pressure ManagementPressure ManagementDistrict meteringDistrict metering

Long term measures:Long term measures:Mains and service renewalMains and service renewal


ALC Cost Curve

Leakage Level

Ann

ual C

ost

Water Cost ALC CostTotal Cost Policy Minimum

Economic Range


ALC Marginal Cost Curve

Leakage Level

Mar

gina

l Cos

t

Water Cost ALC Cost Policy Minimum

ELL


Short Run vs Long Run ELL

Vary Active Leakage Control:Vary Active Leakage Control:Optimise against variable cost of Water (CV)Optimise against variable cost of Water (CV)This is This is short run ELLshort run ELL

Consider capital investment in leakage management options:Consider capital investment in leakage management options:Pressure control, rehabilitation , Pressure control, rehabilitation , sectorisationsectorisation etc.etc.Hypothesis interventions Hypothesis interventions –– work out discounted cost, work out discounted cost, benefit and derive Average Incremental Cost (AIC)benefit and derive Average Incremental Cost (AIC)Rank and implement in orderRank and implement in orderStrictly need to reassess benefit of schemes after Strictly need to reassess benefit of schemes after implementation of other schemesimplementation of other schemesThis is This is long run ELLlong run ELL


Water Resource Headroom


ELL vs. other Supply Demand Measures


Identify opportunities for achieving

economic management of operating

pressures, to reduce frequencies of new bursts

leaks, and flow rates of running leaks

Calculate Unavoidable Annual Real Losses

(UARL) using average system pressure

Use the IWA water balance to

calculate the Current Annual Real Losses

(CARL) with 95% confidence limits

Measure system pressures:

check for the presence of surges,

identify excess pressure above minimum

standard of service, and any pressure

below the minimum standard of service

Calculate the

Infrastructure Leakage Index

ILI = CARL / UARL

Benchmark the operational performance

in managing Real Losses by comparing

the ILI and ELI with international,

national and sub-system data ILI data

UARL < CARL < EARL

Identify opportunities for achieving

economic infrastructure management

activities:

assets, mains and service connections

Calculate Economic Intervention times and Economic Annual Real Losses

(EARL) using cost of water

Calculate the

Economic Leakage Index

ELI = CARL / EARL

Operate to economic ALC intervention times

Identify economic speed and quality of repairs, extent and size of sectors

Twin-Track approach to Benchmarkingand Management of Real Losses


Squeezing the Box

For any system For any system –– the Economic Level of Leakage comprises 3 the Economic Level of Leakage comprises 3 Principal Components:Principal Components:

1.1. A level of A level of ““backgroundbackground”” losseslosses which results from an optimised which results from an optimised entry and exit policy for DMA management, or exit policies for entry and exit policy for DMA management, or exit policies for regular surveyregular survey

2.2. A level of leakage from A level of leakage from reported burstsreported bursts with optimised repair with optimised repair time policytime policy

3.3. A level of leakage from A level of leakage from unreported (hidden) burstsunreported (hidden) bursts resulting resulting from an economic intervention policy for leak detection and from an economic intervention policy for leak detection and repairrepair


Current Annual Real Losses

© WRP (Pty) Ltd, 2001

Pressure Management

Pressure

Management

Active LeakageControl

Speed and Quality of Repairs

Speed and quality

of repairs

Active Leakage Control

Pipe Materials Management:

selection,installation,

maintenance,renewal,

replacement

Pipeline and Assets

Management: Selection,

Installation, Maintenance,

Renewal, Replacement

UnavoidableAnnual Real

Losses


IWA WLTF approach: Squeezing the Box

For any system For any system –– achievement of the ELL comprises 4 interachievement of the ELL comprises 4 inter--related activities:related activities:

1.1. An optimised overall An optimised overall Pressure ManagementPressure Management policy:policy:-- identify presence of surges and minimise their adverse effectsidentify presence of surges and minimise their adverse effects-- basic simple reduction of excess pressuresbasic simple reduction of excess pressures

2.2. An optimised An optimised Repair TimeRepair Time policy for all burstspolicy for all bursts3.3. An economic An economic Intervention PolicyIntervention Policy for awareness, location and repair of for awareness, location and repair of

unreported (hidden) bursts unreported (hidden) bursts -- influenced by level of investment in leakage management infrastinfluenced by level of investment in leakage management infrastructure i.e. ructure i.e.

Telemetry/SCADA, Telemetry/SCADA, DMAsDMAs, advanced pressure management, advanced pressure management-- influenced by exit level (background and other leaks remaining influenced by exit level (background and other leaks remaining after after

interventions)interventions)4.4. An economic level of An economic level of InvestmentInvestment in mains and services renewals which takes in mains and services renewals which takes

account of all other factors account of all other factors


An economic approach to prioritising Pressure Management Areas (PMAs)

0

500

1000

1500

2000

2500

3000

Scheme Reference

Num

ber o

f Pro

pert

ies

in S

chem

e

£0.00

£5.00

£10.00

£15.00

£20.00

£25.00

£30.00

£35.00

£40.00

Cos

t Per

PM

PRA propertycountCost perproperty metre


Repair Times

0 10 20 30 40 50 60 70

Repair Time Days

Add

ition

al C

ost /

Rep

air

Economic?

Uneconomic


Graph 1: Predicting EconomicIntervention Frequency for Regular Survey

Source of data: ALCCalcs

CI/MaC = Intervention survey cost (£/service conn)/ Marginal cost of water (£/m3)

06

121824303642485460667278849096

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100Rate of rise of unreported leaks (S)

(litres/connection/day, per year)

Econ

omic

Per

iod

betw

een

Inte

rven

tions

Te

(mon

ths)

CI/MaC=100 m3/sc

CI/MaC=50 m3/sc

CI/MaC=20 m3/sc

CI/MaC=10 m3/sc

CI/MaC=5 m3/sc

CI/MaC=2 m3/sc


Economic Approach to Coverage by DMAs

0 20 40 60 80 100

% DMA Coverage

Cos

t per

Mld

Sav

ed Uneconomic

Economic


Economic approach toMains and Service Pipe Replacement

Scheme

Leng

th k

m /

Mld

sav

ed

Economic Uneconomic

Limit based on value of water


Selecting Mains for Replacement

Burst Rate Distribution

0

2

4

6

8

10

0% 20% 40% 60% 80% 100%

Cumulative % of network

Busr

t Rat

e no

/km

/yr


Relative costs of reducing leakage (UK, late 1990’s)


Current Annual Real Losses

Potentially Recoverable Real Losses

Economic Level of Real Losses

Unavoidable Annual Real

Losses

Pressure Management

Pressure

Management

Active LeakageControl

Speed and Quality of Repairs

Speed and quality

of repairs

Active Leakage Control

Pipe Materials Management:

selection,installation,

maintenance,renewal,

replacement

Pipeline and Assets

Management: Selection, Installation, Maintenance

, Renewal, Replacement

Economic ILI

economic level of leakage (ell) - fondazione amga · 1 iwa water loss task force visit italy genova...

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