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Creating value for sustainable investments in the water sector

Multiple values of water

The Implementation of Multiple Value Creation project began this year as part of the Water in the Circular Economy research programme (Sector Research/WiCE). The aim of this two-year project is to develop and implement methods for identifying multiple values. An understanding of these values helps with decision-making about sustainable investments in the water sector. Fabi van Berkel (KWR) and her Resilience Management & Governance team are working with a large number of partners on this multi-faceted study: ‘These are not simple processes for which we will find a solution tomorrow.’

‘Collaboration is the principle underlying multiple value creation,’ Van Berkel believes. ‘That is because you achieve several goals with a single intervention. This may involve, on the one hand, active collaboration between partners in the water chain and, on the other, a more integrated approach with the local community. So we look at the water transition through different “glasses”, from different perspectives.

‘Water partners have a circular perspective in their vision of the water chain and of the products and services related to water. For example by developing products that require less water and energy in conjunction with the re-use of basic materials. An example is the shortening of large industrial water chains by using treated waste water instead of drinking water. That eliminates one treatment stage. However, this may have financial consequences for the drinking water company because industry will buy less drinking water. On the other hand, it does deliver an environmental benefit. Moreover, a shorter water cycle can create more opportunities to meet rising demand for water. The trick with these projects is to identify the multiple benefits, who is entitled to the gains and what people are willing to do to obtain them.’

Water transition

In addition to a circular perspective, we can also look at the water transition from a spatial perspective. Van Berkel: ‘Space in the Netherlands is at a premium. Within the limitations that implies, we want to organise our housing, agriculture, leisure and industrial production. We also need space and land for water, solar farms and wind turbines so that we can adapt to the changing climate. If we respond accordingly, what will be the effect on biodiversity? And are the interventions desirable from a social point of view?’ The urban environment also requires specific solutions, according to Van Berkel. ‘For example, we have to cope with heat stress and flooded cellars. There is pressure on housing and we want to develop the subsurface for new types of heating and water networks.’

The researcher emphasises that all these perspectives are important for society but that they also involve conflicting values. ‘It’s a complex puzzle that isn’t easy to solve. But by visualising the costs and benefits in a new way, a water company – in collaboration with its partners – can take decisions and transform higher social added values into concrete reality. That is what value creation is all about.’

Guide for water companies

As part of the Implementation of multiple value creation project (which is a part of the Water in the Circular Economy BTO/WiCE research programme), water companies want to have a clearer understanding of the implications of this topic for them and how it can be used in decision-making about the water and energy transition. Two considerations are important here. Firstly, there must be a sense of urgency, the realisation that a drinking water issue such as climate change will inevitably be a factor in the future. In addition, the stakeholders involved need to establish structures that allow them to collaborate and consult.

Van Berkel gives an example: ‘A municipal authority may decide to design the infrastructure of local area with the heating transition as a guiding principle. If the water company cooperates, investments in the mains and efforts targeting this objective will probably be needed sooner than originally planned. If this fits in with the strategic objectives of the water company – objectives relating to climate change, for example – then it is an appropriate decision to make. Collaborating with other stakeholders will also contribute to the result. Even though the investments for the individual water company may be higher, it may still make sense to go down this road. Ultimately, multiple value creation is about achieving a higher impact over a longer period and preventing higher costs in the future. With our research project, we give a helping hand to water companies who want to make a contribution in this area.’

Circular water systems

In recent years, a series of living lab projects have been conducted under the auspices of BTO/WiCE looking at multiple value creation. In Koppelkansen (Amsterdam), SUPERLocal (Kerkrade) and Brainport Smart District (Helmond), KWR, water companies and other parties have been experimenting with design methods for circular water systems. The aim in each of these living labs is plurality. On the basis of previous activities and experiences, Van Berkel and colleagues are now developing three different components that can be applied elsewhere: framework, assessment framework and process methodology. Van Berkel: ‘In this study, we offer methods for “new-style neighbourhood development”. Multiple value creation is the guiding principle here. Using the living labs as case studies, we will test the three components in collaboration with stakeholders. We are also developing concrete, accessible tools to simplify administrative discussions. It is time to replace the thirty-year-old social cost-benefit analysis (SCBA) or to supplement it with tools that are currently needed, such as a value case or a community canvas. The aim of our study is to support this process.’

Sustainable neighbourhood development

In Van Berkel’s experience, KWR, with this study of multiple value creation, is responding well to a need that is widely felt by stakeholders in society. ‘We can use the experience to pioneer and deploy the knowledge we have gained on behalf of innovative projects relating to sustainable neighbourhood development. The goal is to start working in a new way. That means slowing down on occasion and then accelerating again. Ultimately, everything is about forming a coalition and putting our combined weight behind the collective interest of the water sector.’