Operational cost of drinking water and wastewater treatment plants up due to high energy cost, says Veolia India chief

New Delhi: The operational cost of drinking water and wastewater treatment plants along have increased due to rising energy costs, said Guillaume Dourdin, India CEO of global water management major Veolia in an interview.

The French firm has been working on improving the water distribution system with local authorities in New Delhi, Maharashtra, Karnataka and Greater Mohali.

Dourdin added that Veolia is planning projects for re-using industrial water in Gujarat, Maharashtra and Rajasthan.

“We are directly impacted by the cost of energy in our hazardous waste activities. So, whenever the energy jumps by 10%, we take a hit of 10% in our PNA (Partial nitritation-anammox) and therefore we have to find ways to compensate because it's extremely difficult to pass it on to our final customer. We manage to pass on part of this inflation, but we don't manage to pass it on fully,” Guillaume Dourdin said.

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“The energy requirement is very different from one project to another. Whether you take a drinking water plant or wastewater or an incineration line for hazardous waste, the numbers are extremely variable.”

“On average, our 9 WTPs (water treatment plants) consume 78,402 MWh per annum of electricity to produce 338,000,000 cubic metre of water. This value depends on plant location, terrain, raw water quality, season, age of the plant and flow at the inlet and outlet,” he added.

This comes in the backdrop of rising energy costs. The world’s demand for electricity is rising at its fastest rate in years, driven by robust economic growth, intense heatwaves and increasing uptake of technologies that run on electricity such as EVs and heat pumps, according to a July report by the International Energy Agency.

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Global electricity demand is forecast to grow by around 4% in 2024, up from 2.5% in 2023 and the strong increase in global electricity consumption is set to continue into 2025, with growth around 4% again. Similarly, demand in India is expected to surge by a massive 8% this year because of strong economic activity and powerful heatwaves according to the report.

India's soaring electricity demand - estimated to grow at over 4% every year till 2050 - will exceed the average annual global demand growth during this period, the IEA estimated in October. Meanwhile, wholesale electricity prices in India rose 12.2% in September, 1.0% higher than in September 2023.

Dourdin informed that after signing a 2,000 million litres per day water treatment plant in Mumbai, Veolia is now looking at a few re-use projects for industrial water worth a few dozen million euros.

Reuse projects

“We are looking at a few reuse projects for industrial water in some other states and a few additional investments in other spaces, in states adjacent to Gujarat, probably Maharashtra and in Rajasthan. The reason for that is we want to remain very focused on our development,” India CEO of Veolia said.

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“Typical investment would range from a few million euros for a small plant in carbon capture to a few dozen million-euro-per- project for a sub-water facility. But in a lot of our business models, we don't necessarily invest,” Dourdin said when asked about the project cost which will be borne by Veolia.

As the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change or COP29 is around the corner, Dourdin also highlighted the importance of water reuse and water pricing to ensure water security.

COP29 presidency in September launched a pack of 14 initiatives to accelerate climate action, including a declaration on water for climate action. 

The declaration calls upon stakeholders to take integrated approaches to combat the causes and impacts of climate change on water basins and water-related ecosystems, and integrate water-related mitigation and adaptation measures in national climate policies, including nationally determined contributions and national adaptation plans. 

The declaration by the COP29 Presidency along with the United Nations Environment Programme, United Nations Economic Commission for Europe and World Meteorological Organization will launch the Baku Dialogue on Water for Climate Action, scheduled for 21 November, to enhance COP-to-COP continuity and coherence.