The US water industry has faced unique challenges over the past year, and it hasn’t just been the Covid-19 pandemic that has made its impact, according to a new report published in August 2021 by Black and Veatch. Ageing infrastructure and climate-related impacts have also prompted the industry to respond by embracing sustainability, innovation and technology.
Writing in The Strategic Directions 2021 Water Report, President of Black & Veatch’s water business Cindy Wallis-Lage, says: “With thousands of water utilities across the US, challenges run deep. Ageing infrastructure remains the chief issue, prompting concerns about the resiliency of assets well past their prime. Climate change worries are driving difficult discussions about hardening the infrastructure — and how to pay for it — to withstand droughts, floods, wildfires or extreme shocks, such as February’s deep freeze in Texas.”
Wallis-Lage said that the COVID-19 pandemic, initiated in early 2020 and continuing in 2021, created financial stress on many utilities and complicated existing industry challenges. In addition, “intensifying natural disasters impacted water systems, highlighting the rising effects of climate change, testing the resilience of infrastructures, and reinforcing the need for significant investment”.
The report goes on to discuss how utilities and communities face an evolving challenge to protect against weather-related disasters that appear to be gaining in terms of frequency and intensity as a result of climate changes. By beginning or advancing the planning process for operational resilience in the near term, it says that utilities can help to provide water security in the future.
In the report, Black and Veatch’s Ed Rectenwald (a hydrogeology national practice lead), Jim Schlaman (director of planning and water resources) and Andrew Smith (national watershed, stormwater and flood management practice lead) state that the water industry has “tended to give thoughts of climate change a relatively cold shoulder” given their other demands.
“As impacts of climate change manifest themselves elsewhere in the form of expansive, seemingly more common droughts, flooding, hurricanes and wildfires, questions arise,” the authors wrote. “Are utilities and communities doing enough to harden their water, wastewater and stormwater infrastructures and assets against such threats? Or are they at least starting to plan for such upgrades in the interest of dependable water security and supply? The short answer is that there’s much more the industry needs to be doing to become resilient.”
They continue to add that “increasingly extreme weather events should compel water utilities — many underfunded and starved for capital — to proactively and thoughtfully plan for ways to harden their assets as a backstop”.
Although the US built a lot of water and wastewater infrastructure in the 1950s and 1960s, capital spending since has since dropped off sharply.
“Until systems break, water and wastewater functions remain an ‘out of sight, out of mind’ business. But breakdowns are becoming more frequent, given the prevalence of ageing infrastructure stressed by population growth and migration,” the authors warn.
As worries about climate change escalate Rectenwald et al recommend that utilities of all sizes would be “well-served” to strategise thoughtfully now about upgrades, knowing that such projects are years in the making.
They go on to suggest that water utilities should begin by having earnest, honest conversations about the value of water and remember the salient point that the environment is not static.
“It’s not about the infrastructure’s performance over past decades but what challenges the assets will have to handle sooner or later,” they stress. “It’s far cheaper to repair or replace assets now, before systems weaken and fail, than playing catchup — and pointing fingers — when trouble strikes.”
Climate risk exposure
New analysis by S&P Global Ratings has also highlighted US utilities’ exposure to physical climate risks, concluding that these will become markedly more acute by 2050.
Published in September 2021, Keeping the Lights On: US Utilities’ Exposure to Physical Climate Risks found that wildfires, storms and water stress are the most material climate hazards facing 24 rated investor-owned US utilities in the next 30 years.
The report warns that the risks of acute, extreme weather events are rising. Five of the country's worst natural disasters have all occurred since 2005, totalling US$523 billion in inflation-adjusted damage. While in most cases, acute risks prove manageable and are supported by recovery mechanisms to allow utilities to recuperate related costs, extreme events do have an effect on credit quality. In particular, transmission lines for utilities on the West Coast present a concentrated risk given extensive wildfire exposure. Indeed, about 19% of utilities' transmission lines face high unmitigated wildfire exposure by 2050.
Water stress is also a serious threat for all the utilities in the analysis, with water-intensive assets like power plants especially vulnerable in the absence of adaptation. By 2050, the currently muted risks from rising sea levels, flooding, and heat and cold waves grow more acute.
The report gives credit to US utility companies, who they say manage large and complex networks and are making massive investments to strengthen and upgrade assets to withstand the increasingly extreme and variable climate. However, to protect their assets as well as maintain security of supply, the authors believe US utilities will benefit from a clearer understanding of acute and chronic physical climate risks and better foresight, using enhanced climate analytics, about when and where they will occur.
Indeed, climate projections suggest that all US regions will be affected by climate change to some degree, with impacts varying by geographic location and time. While flood risk is projected to increase by the end of the century, particularly in the Northeast and Midwest, water stress and drought risk are expected to impact central states and the region of the Southern Great Plains. While average temperatures are projected to increase across the US. Furthermore, extreme event attribution science shows that the majority (70% of 405 such events in the last 20 years) have been made worse or more likely by climate change.
“Even though US utilities have made progress in recent years, including a focus on sustainability reporting, they may not be sufficiently prepared for what the future may hold,” the report warns, citing recent research that cautions that most US electric utilities do not undertake climate change risk and vulnerability assessments. Reasons for the utilities not undertaking such assessments included questions about the uncertainty surrounding different climate hazards, including the precise timing and crystallisation of impacts, as well as a lack of data.
However, S&P states that detailed studies like these “serve to bring clarity to the changing frequency and severity of climate hazards and their impacts…and may help utilities plan for and build resilience to more extreme weather events and long-term climate change”.
There are also suggestions that that US utilities have in some cases been slow to respond to the threats posed by physical climate risks. S&P warns this may leave companies exposed to a $500 billion resilience investment gap that could increase in the absence of concerted action.
The report states that: “We believe most utilities we rate are well aware of these challenges, and they are adapting strategies and investments to better position themselves for a future that is likely to feature more pressure from the physical risk factors outlined in this paper. While progress has been made to improve the resilience of US utilities to the physical impacts of climate change, more work is needed.”
At the same time, it states that utility companies require better data to help inform business continuity management processes and risk assessments. Enhanced climate risk analytics can help provide greater transparency for market participants to identify and analyse potential longer-term risks and facilitate a dialogue with rated entities that are potentially exposed. Increased transparency surrounding these risks also presents an opportunity for issuers to demonstrate the benefits of existing or planned adaptations.
“This exploratory physical climate risk analysis,” the report concludes “which is cognisant of the inherent natural uncertainties associated with climate science, has the potential to provide greater insight regarding rated U.S. utilities' potential exposure to physical climate risks and how companies have adapted or plan to adapt to current and future climate physical risk.”
Solutions by Nature
A new joint venture between Binnies and Salix has launched Solutions By Nature. This will offer the UK water market a whole-life-cycle approach to developing catchment-based blue-green infrastructure solutions that can be created by using natural processes and materials, including peatland restoration, green infrastructure, river restoration and integrated constructed wetlands.
Quantifiable analysis of performance using digital monitoring will help clients meet their sustainability, biodiversity, carbon and economic targets, while achieving wider societal benefits, including enhancing recreational areas for community wellbeing and wildlife.
This new partnership combines knowledge, processes, specialist machinery and the largest and most diverse nursery infrastructure in the UK, producing over two million plants annually representing 200 native species, to create resilience in the environment naturally.
“Binnies has, for over 100 years, been at the forefront of planning, designing, constructing and commissioning new and innovative treatment processes for the benefit of our water industry clients and it is exciting to be continuing to do this in a joint venture with Salix, our RSK sister company,” Scott Aitken, Binnies Managing Director says. “Solutions By Nature, our complete turnkey solution, is the radical shift in helping solve the challenges we face to protect and enhance our water environment.”
“There are big challenges within the water industry,” Salix Managing Director David Holland adds, “and it is essential for both our clients and ourselves that we face these head on and resolve them efficiently and effectively, with industry-leading, innovative, sustainable solutions.”
Sustainability is key
Hydropower’s sustainability came under the spotlight at the UN Climate Conference (COP26) in Glasgow during November 2021.
"Sustainability is the key issue when it comes to the utilisation of our renewable energy resources,” Iceland’s Minister of Tourism, Industry and Innovation Þórdís Kolbrún Reykfjörð Gylfadóttir said, outlining the crucial role of hydropower in Iceland’s goal to be fully independent from fossil fuels by 2050. "We believe that the San José Declaration on Sustainable Hydropower is of great importance, and we fully support the declaration. It outlines a new progressive vision for how sustainable hydropower can, in a responsible manner, be utilised to play its best role in the clean energy transition we need to undertake," she continued.
Launched in September 2021 following public consultation, the San José declaration puts forward a new set of fundamental principles and recommendations to shape hydropower’s contribution to global climate goals.
The Nature Conservancy’s Regional Managing Director for Europe Marianne Kleiberg welcomed and wanted to applaud the ambition of the declaration.
“The industry has made great strides towards sustainability,” she said, adding that the declaration’s commitment not to develop new hydropower projects in World Heritage Sites was “a significant step” but suggested that maybe it could include a broader category on protected areas.
“There is a need for more hydropower, we all agree on that,” she continued. “So, if we're going to build more, how can you do that in the most sustainable way? Can we look at a master planning approach? Can you retrofit old power plants to make them more efficient and more environmentally friendly?” she asked.
2021 IHA Blue Planet Prize
The International Hydropower Association’s 2021 Blue Planet Prize for excellence in sustainable hydropower development has been awarded to NHPC Limited’s 510MW Teesta-V hydropower project in Sikkim, Northern India.
The award recognises hydropower projects which have demonstrated their environmental, social and governance (ESG) performance. During its detailed assessment by independent assessors using the Hydropower Sustainability Assessment Protocol from January to June 2019, Teesta-V met or exceeded international good practice across all 20 performance criteria using the Hydropower Sustainability Tools.
NHPC Chairman and Managing Director Abhay Kumar Singh said it was a proud moment for NHPC and it will encourage and inspire them to achieve higher standards in sustainability for hydropower project development and operation.
Dr Joerg Hartmann, lead assessor of the project said: “This assessment helped NHPC identify strengths as well as weaknesses in the Teesta-V project. These lessons can now be applied across the company’s entire project portfolio, and because NHPC chose to be transparent with the results, across the entire Indian hydropower sector.
“In fact, some of the best practices identified in the assessment – such as conducting a follow-up Environmental Impact Assessment ten years after project commissioning, to verify initial predictions of impacts and the effectiveness of mitigation measures – should be considered by project owners everywhere.”
Outstanding Stewards
The National Hydropower Association has announced the winners of its 2021 Outstanding Stewards of America’s Waters Award. This year’s winners in the Recreational, Environmental & Historical Enhancement category included Idaho Power Company, Yuba Water Agency and Whooshh Innovations.
LeRoy Coleman, NHA Director of Communications said that the companies “exemplify that no other renewable protects and preserves our natural ecosystems quite like hydropower.”
Idaho Power Company developed the Niagara Springs Sturgeon Hatchery which is designed to support a novel approach to the conservation of white sturgeon populations along the Snake River in Idaho and Oregon between Brownlee Dam and Shoshone Falls Dam. It operates by receiving fertilised sturgeon eggs from natural spawning events in the Snake River and helps maintain the genetic diversity of the natural population.
Yuba Water Agency partnered with local agencies to establish the Watershed Resilience Programme to aid in reducing the risk of catastrophic wildfire as a result of overly-dense forests that are more susceptible to high-severity wildfire, insects, disease and drought. The programme has reduced the associated risk to water infrastructure, water quality and post-fire cleanup of sediment and woody debris inflows.
Seattle-based Whooshh Innovations worked with the Canadian government to work at a remote site where a rockslide had dammed the entire Fraser River, blocking salmon passage at Big Bar near Lillooet in British Columbia. Whooshh was able to deploy two of its new Passage Portal systems in less than three months and began safely aiding thousands of salmon over the barrier to continue their migratory journey despite being in a remote location with no roads, power or connectivity.
