Supply-Demand Planning At A Glance

30 September 2005
Capabilities and Services

Water undertakers recognize the need to plan for the long-term in order to ensure that their supply capability will be sufficient to meet demand, both throughout the year and in peak periods. In order to find the best solutions in cases where deficits are projected, potential schemes to reduce demand or leakage, or increase supply should be identified and evaluated in relation to their associated costs, yields, risks, and constraints. As such, supply-demand plans must be robust in accounting for a range of uncertainties, including demand, climate change, environmental effects, and general construction risks. As environmental controls become ever tighter, new uncertainties are emerging, such as the possibility of non-renewal, or curtailment of abstraction licences.

In the UK, methodologies for clean water supply-demand planning have attracted notable attention from the water industry in the past decade. NERA has been a leader in this area, having produced key methodological reports for UK Water Industry Research, including "Demand Forecasting Methodology," "The Economics of Demand Management," "The Economics of Balancing Supply and Demand," and "A Framework Methodology for Estimating the Impact of Household Metering on Consumption." NERA has also helped individual water companies develop and apply methods for supply-demand planning.

While clean water supply-demand planning has consistently received significant consideration, the UK industry has given less attention to its approaches to wastewater planning. The issues surrounding wastewater planning are very similar to clean water planning, but are more complex in several respects, notably due to the more localized and multi-dimensional nature of the problems, as well as greater planning uncertainties. NERA experts are actively involved in the development of wastewater planning methodologies and optimization modelling tools and can help companies prepare robust and defensible strategic business plans for Periodic Review 09 and beyond.