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Investment in the European water utilities market is being boosted by the approach to totex, a report by Frost and Sullivan has found.
The report, Analysis of the European Water Utility Services Market, said the market earned revenues of $104.27 billion in 2014 and estimates this to reach $130.51 billion in 2020. The study covers chemicals, operation and maintenance, process control and management, design, engineering and construction, and water and wastewater technology.
It said the sector’s challenge of aging infrastructure in need of urgent rehabilitation can also be an opportunity as efficiency and modernisation. Furthermore, given the large number of priority investment needs, water utilities have identified the totex mechanism – a cumulative consideration of both capital and operational expenditure – to help in the decision making process of rehabilitation projects.
Frost and Sullivan vice president Fredrick Royan said: “In the past, water utilities have largely used the capex as the primary driver in deciding the fate of infrastructure upgrades, refurbishments or replacement projects.
“In the current scenario, water utilities are using the totex approach to decide on water infrastructure investments, which is beneficial for innovative and smart solutions that at times are relatively expensive in terms of capex but under the totex approach appear to present tangible economic benefits and sometimes with attractive payback periods.”
Water utilities’ focus on achieving operational and energy efficiency has been a major boon for the associated services market. In a bid to be customer-centric, these utilities have been making investments to improve existing network, treatment and process control infrastructure.
“One of the key trends in the European utility services market is the adoption of smart water and wastewater solutions,” said Frost and Sullivan energy and environmental research analyst Ramkumar Ravisankar. “This is driving spending and spurring strategic partnerships between companies and utilities.”
This article first appeared on WWTonline.
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