• Arjun Thapan

Cape Towns of the Future: Australia’s Urban Water Conundrum





About 90% of Australia’s population lives in its towns and cities. Sydney is expected to grow by 1.6 million people by 2037. Melbourne will be the country’s largest city at that time.


Water storage levels in Perth are at 40.4%; they were 28.5% in 2016. The long-term volume of water getting into Perth’s system has dropped from an annual average of 338 gigalitres in 1974 to 50 gigalitres in 2016. Although Perth has survived thanks to desalination and groundwater, it is now pumping treated wastewater into shallow aquifers to replenish the supply. It aims to recycle 30% of its wastewater.


Desalination is the mainstay of all of Australia’s capital cities. The investments have been expensive. The Melbourne desal plant cost A$4 billion. The Sydney plant costs A$180 million annually to sit idle – it has not supplied any water since 2012. The Victoria plant costs A$1.8 million a day to remain on standby. It is estimated that its 28-year lifetime will cost A$24 billion. In fact, desal plants are sometimes referred to as ‘bottled electricity’ given their power-intensive nature. This is worrisome in the context of Australia’s power crisis, especially in the east.


Managing water demand is gaining momentum though there are serious aberrations. Pricing plays an important part here. Melbourne is targeting 155 liters per capita per day (lpcd), from the current 161 liters. Canberra has the most expensive water in the country at almost A$5 per cubic meter and yet consumes 195 lpcd. Perth, which is relying on several solutions to alleviate its shortages, consumes almost 350lpcd. Customers in Melbourne are charged on a volumetric basis – those households consuming more than 881 liters per day are charged 75% more than the lowest consumers. Sydney had an effective demand management program but gave up once demand came down to about 280 lpcd. This was done to reduce the impact on sales, and to protect the dividend paid out by Sydney Water to the government of New South Wales. Current demand has grown back to about 340 lpcd. And this in the face of declining reservoir levels, a mothballed desal plant, and the uncertainties of climate change. Clearly, Sydney seems to be living beyond its water means.


What does this mean for urban Australia? Will it be a landscape littered with Cape Towns? Water shortages are evident. The solutions seem to be working only in part. Desalination is expensive insurance. And managing demand through prices is working sporadically. The potential for recycling used water should not be dismissed lightly. If even half of Sydney’s daily discharge of 1 billion liters of treated wastewater was recycled, it would be possible to scrap the desal plant and save the annual maintenance costs of A$180 million.


Urban Australia’s water insurance has many fathers; putting them to good work is a challenge.

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