Water Management in Action

Water valuation to optimize water use in the Durance Valley, France

EDF used water valuation to help the decision-making process for optimal water management in the watershed along the 250 km Durance River, in southeast France, with respect to competing multipurpose uses of water. These include agriculture, tourism (fishing, swimming, sailing, etc.), hydropower, drinking water, and flood control. The overall aim was to optimize water allocation between energy generation and irrigation and to develop appropriate incentives for water savings in order to restore financial margins, and to answer future water demand from other users. The value used for water was the energy cost (€/kWh), based on current and future prices in France, linked to energy productivity (m3/kWh) and the volume of water used (m3) by the hydropower plant. The main business argument for the valuation study was to clearly demonstrate the benefits of optimizing water uses for each party and to define the level of remuneration for this savings. The approach adopted was to implement a Water Saving Convention, signed by EDF and the two main irrigators, for a six-year period with the possibility to adjust it if it achieved better results than expected. To balance these efforts, EDF has made a commitment to remunerate the partners for their savings. The deal was so effective that a first additional agreement was signed in 2003 and a second one in 2006 to increase the savings target from 44 to 65 and then to 90 million cubic meters – showing a decrease in agricultural consumption from 310 million cubic meters in 1997 to 201 million cubic meters in 2005. The results showed that, in addition to the volume of water saved, a key benefit was the timing of the water savings because the saved water could be used to generate more electricity during peak periods of electricity demand when electricity prices are higher. Both parties come out ahead, with a third winner being ecosystems, as around 84 percent of the water savings are used for ecological purposes.

UTE Norte Fluminense: Keeping the planet blue

In Brazil, UTE Norte Fluminense (EDF 90%) has put in place a full program to reduce the use of water in its Macaé CCGT power station, in Rio State. The project started three years ago with the identification and reduction of all leaks and the reduction of purges. This first stage also involved ensuring employees were aware and involved. The results were impressive: a 30 percent reduction in water use. In 2011 the station management went further and launched the construction of a rainwater capture system, which allowed them to reduce by a further 5 percent the water extracted from the Macaé River (100,000–150,000 m3 of rainwater is collected per year). Raising the bar further, 2012 saw the launch of a program to collect all processed water in order to re-inject it into the plant’s water circuits. The aim is to reduce water consumption by a further 15 percent. These large investments (€3.8 million), with a payback over 18 years, would not have seen the light of day without the support of the Board of Directors. But there were also indirect benefits: employees who are even more proud of their power station, subcontractors who are more involved, and local groups and NGOs who are on board with a thermal power plant whose operation is focused on respecting the environment. At the same time, UTE is collaborating with a university in Rio on research into reducing water evaporation from cooling towers, which represents 80 percent of water extractions from the river.

This project description was originally presented in the Global Compact International Yearbook 2013.