Energy Efficiency Investments in Urban Water and Wastewater Utilities

publication June 18, 2019

Energy Efficiency Investments in Urban Water and Wastewater Utilities

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Mainstreaming Energy Efficiency Investments in Urban Water and Wastewater Utilities --

Why Energy Efficiency Matters?

For the majority of urban water and wastewater utilities (WWUs), investments in energy efficiency will generate the highest return on investment.

With rapid urbanization throughout the developing world, WWUs are facing increasing pressures to provide reliable safe drinking water and wastewater treatment services. These are highly energy-intensive activities. The International Energy Agency has estimated that the electricity consumption of the water sector worldwide was 4% of total global electricity consumption (IEA 2016).

Electricity costs are the largest ��controllable�� operating costs for most WWUs, and international experience indicates cost reductions of as much as 20 to 40% are feasible through improved efficiency of energy use (ESMAP 2012, Watergy 2007).

Electricity costs for water production, distribution, and treatment contribute significantly to operating costs, ranging in many countries from 33% to 82% of non-labor operating costs of WWUs.

Table 1 provides illustrative data, extracted from the World Bank��s IBNET database (Limaye and Jaywant, 2019).

Benefits of Improved Energy Efficiency

Improving energy efficiency in WWUs leads to lower energy costs and reduced vulnerability to future tariff increases. The resulting operating cost reductions help WWUs improve cost recovery and lead to better operational performance. Other financial and environmental benefits include (see additional information in the )

Better financial performance
Better creditworthiness
Reduced water losses
Reduced needs for new investment in power supply
Improved electricity supply efficiency and costs
Reduced local and global environmental impacts

Energy Efficiency Case Study Highlights

Mexico: The city of Monclova installed variable speed drives, improved pumping efficiency, replaced old pumping equipment with more energy efficient pumps and optimized pumping operational schedules, thereby reducing the energy intensity of its water network by 23%, improved operational efficiency, and increased revenues (by supplying additional customers) with a simple payback of 1.9 years.

Bosnia and Herzegovina: The town of Mostar implemented pump upgrades and replacements, greater use of gravity-fed water, and water leakage detection and repairs, to reduce energy use by 40 percent, declining from 9.4 MWh in 2001 to 5.6 MWh in 2004. These energy savings translated into an estimated annual electricity cost savings of USD128,400 for the town.

Armenia: The city of Yerevan engaged a competitively selected management contractor to undertake a performance-based contract that included rehabilitation of pumping stations, increasing gravity-fed water supply, trimming pump impellors, and upgrading pumps. The energy efficiency investments provided an annual cost savings of USD 4.8 million with an investment of USD 16.8 million, yielding a payback of 3.5 years.

Brazil: The city of Campinas established an energy management program, including specific energy efficiency improvements, as a part of operational management to improve the overall operational efficiency and to enhance financial performance. In their Capivari water treatment plant, EE measures resulted in annual energy savings of USD 200,000 (1.8 GWh) with an investment of USD 1.3 million, for a simple payback of about 6.5 years.

Source: ESMAP, Energy Efficient Cities Case Studies Database,

To learn more about the initiative, get in touch with Kristoffer Welsien, Senior Water Supply and Sanitation Specialist, Water Global Practice, kwelsien@worldbank.org

This initiative ��Mainstreaming Energy Efficiency Investments in Urban Water and Wastewater Utilities�� is supported by the Global Water Security & Sanitation Partnership (GWSP) and the (ESMAP).

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