Do You Know What Your Water is Really Worth?

Accurate water valuation is critical for future-proofing.

In the list of outlays your company makes each year to remain operational and thriving, the price of water might be one of the smaller numbers in your ledger. But price and worth are two very different things when it comes to putting a true value on water, a perspective that goes well beyond budget line items. By taking a more detailed picture into account, from variable rates to water-enabled equipment to regulatory compliance and more, you’ll gain a more thorough and accurate understanding of water’s price—and what water is actually worth to your business.

How much is water worth?

Benjamin Franklin famously noted, “When the well is dry, we’ll know the worth of water.” Imagine if your water supply was suddenly reduced by half. Or stopped altogether, even temporarily. Could your company continue basic operations?  For how long?  What would such an interruption, even a short one, cost your business in productivity?

It’s hard for many of us to accurately imagine running out of water. The size of potential losses is difficult to estimate because it depends on different future scenarios, and convincing an organization to spend money to address an eventuality that’s hard to fathom can be a tough sell.  But for most businesses, there’s more water flowing through day-to-day processes than that which comes out of the tap in the restroom, making water invaluable to operation.

Preserving Business Continuity

Reliance on any amount of water increases the risk of operation downtime if your water supply is interrupted or compromised—a situation that could immediately impact your profit. And no business can afford stranded assets (infrastructure made obsolete by changing industry norms, regulation, or resource availability).

Whether you’re an industrial manufacturer or college campus, the ability to cool buildings, wash products, and maintain sanitation is critical. Every industry relies on water in some capacity, and the need to insulate your business from operational risks is growing.

That’s because as the human population and global economy grow, water demand and pollution also rise. Water scarcity already impacts communities globally. A NASA (National Aeronautics and Space Administration) satellite analysis shows 13 of the earth’s 37 largest aquifers are depleted. These stressed aquifers lack sufficient replenishment to satisfy regional demands, which include fulfilling the needs of the communities and corporations reliant upon them. The UN (United Nations) estimates that by 2030, there will be a staggering 40% deficiency in the global water supply, and current business-as-usual water management practices will put 45% of the projected 2050 global GDP at risk.

The implications for business are serious. CDP reports that these diverse industries all report instances where water risks could close operations or strand an asset:

 

These are grim numbers that mandate a thorough reevaluation of our relationship to water in the business community. They also represent an opportunity to increase urgency and awareness around proper water use and the innovation of smart solutions. Understanding the challenges your organization might face will help you devise an appropriate strategy, both short- and long-term, to reduce your reliance on our dwindling freshwater supply.

Protecting Expensive Equipment

Water quality issues pose a myriad of problems, including shortening your equipment’s lifespan. Organizations often have numerous, expensive assets on site that rely on water (for example, a boiler or a cooling tower). If water is not treated or filtered properly, it can severely impact equipment performance, reducing production capacity and necessitating repair or replacement. Water quality issues such as corrosion, deposition, and scaling have significant impacts on equipment performance, which affect efficiency, run time, lifespan, production, and more. 

Problem	Corrosion	Deposition	Microbial Fouling
Description	The physical deterioration of piping and other metal surfaces in contact with water.	Different materials in water reduce heat-transfer efficiency and the carrying capacity of water distribution systems through scale deposit formation, crystal growth, and fouling from insoluble particle deposits.	Microbiological fouling is caused by algae, fungi, and bacteria growth on water-interfacing surfaces, which decreases heat transfer efficiency and reduces water flow over time.
Examples	Pitting, galvanic corrosion, crevice corrosion	Scale deposits, crystal growth, fouling	Slime formation
Possible Mitigation Practices	Improving water quality through the creation of calcium carbonate film, removing oxygen through mechanical or chemical deaeration, adding corrosion inhibitors	Maintain control of pH, cycles of concentration; filtration upstream of critical equipment; increase water velocity	Use of different types of biocides to treat problem at the source

 

Fit-for-purpose water quality is critical to safe and consistent equipment operation. Many organizations take a dependable water supply for granted when considering the value of water and related capital improvements. The ability to protect expensive equipment and avoid replacement costs is likely worth a lot to your organization, considering how down-time may negatively impact revenue.

Ensuring Wastewater Compliance

Your water supply may be subject to regulatory or other costs like clean-up liabilities and fines, particularly for wastewater outflow. If you’re discharging water to a sewer or watershed, there are quantity and quality rules for what leaves your system, issued by the EPA or by state and local regulators. You may have to apply for wastewater permits to maintain compliance and pay associated fees, adding to the cost of water.

The cost of breaking compliance with these permits also threatens your social license to operate. More than ever, transparency and social perception of how your company conducts itself carry considerable weight. Public opinion may not have a specific dollar value, but there’s no doubt it could significantly affect current and future revenue for any business found non-compliant, or even perceived to be sidestepping the rules.

Accurate Water Valuation is Good Business

Compared to your business’ other utilities like electricity and natural gas, water might appear a cheap standard line item. But most companies or organizations vastly undervalue their water and its consistent supply. This inaccuracy makes it challenging to convince leadership to spend money on protecting water resiliency, leaving assets vulnerable to very real threats to a reliable water supply. That’s why it’s so critical to understand what water is worth to your business.

Quantifying the true value of water for your organization can help increase internal awareness and build buy-in for addressing water risks and costs. There are several ways to calculate the actual value of water that can help paint an accurate picture.

You might assign dollar values to potential variables and scenarios to create an internal water price adder, increasing the cost-to-compare. Alternatively, you could adjust the framing of water-related projects to focus on business continuity rather than ROI.  All capital projects should reflect the true cost of water, numerically or strategically, before advancing to approval.

 

 

Regardless of your methodology, your water cost equation should show that solutions which preserve a reliable and redundant supply are worth any additional spend. For example, building a system to capture and clean wastewater or storm water runoff for reuse in process cooling or HVAC equipment may be a significant outlay of money if the plan is to self-fund the project. However, when considering the dollar value of a loss of water supply, the self-reliance and enhanced compliance management offered by this solution is the cheaper alternative. Some solutions may seem expensive on the front end, but they’re less costly than halted operations.

Coho can work with you to design a water resiliency strategy tailored for your business, so that you can continue to access what you need in the future. Get in touch to learn more.