An economic analysis of water use in the Scotland river basin district

An economic analysis of water use in the Scotland river basin district

SUMMARY REPORT

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5. How pressures on water use are predicted to change over time (dynamics)

Research over the past two years has expanded our knowledge of how water is currently used and what the resultant pressures are on the water environment. Over time this use will change as technology and the underlying economic structure responds to local, national and international pressures. By forecasting the most likely industrial drivers, tying this in with demographic trends and knowledge from sectoral experts, it is possible to generate a view of the most likely future scenario for (in this case) 2015, based on currently available knowledge. Of course, there is no crystal ball and it is impossible to predict random events; these projections must be seen as indicative. They are ‘if nothing alters’ projections and are the consultants view of what might happen if the (pre-water framework directive) current situation continued. As a result of this the margins of error must be seen as increasing the further we move from the base year.

In this section we have examined the sources of increasing pressure on water use in the absence of constraints from the implementation of the water framework directive. In reality users will, of course, be continuing in their efforts to reduce the use of raw materials including water, and pressure will be brought to bear on existing and new water uses. The growth and structural change of the economy to 2015 might suggest the changes illustrated in the table but these are not predictions of what will actually happen. If we were to predict the actual level of water use many sectors would have much lower rates of growth of use, stable levels of use and in some cases declines in water use.

What the table is intended to illustrate is the source of future pressures. This is important because we want to understand not just how water use has occurred in the past or where water use is occurring at the present but where pressures for access to water might occur in the future. Understanding something about the sources of pressure for the future allows thought to be applied to how potential problems might be overcome before they become insurmountable. At the moment there has been no attempt to separate out these effects on a regional basis, or to relate these increases in pressure to specific water bodies. We will explore how this might be done in the coming years.

This section is based upon an research and development report on the dynamics of water use which is available on the SEPA website41. The section concentrates on significant water users in terms of volume. Table 14 below provides an overview of how water use could change by 2015.

Table 14 Summary of the predicted changes in water use for selected large volume users

Sector Sub Sector Water use (m3/yr) 2004 2015 % change
Industry Electrical & instrument engineering 519.6 604.1 16%
Chemical industry 315.9 397.2 26%
Food and drink 260.2 279.5 7%
Paper 87.7 105.3 20%
Other industry 917.3 1,053.8 15%
Electricity Gas & Water Supply Electricity - cooling 27,537.9 33,854.0 23%+
Hydro - Impoundment 3,355.4 4,143.8 23%+
Household water supply 266.0 272.3 2.4%
Agriculture, forestry and fish farming Agriculture 56.5 49.8 -12%
Fish farming 1,582.4 1,771.3 12%

* m3/yr = cubic metres per year
+ = The strongly held view of the Ecoonomic Advisory Stakeholder Group (EASG) was that these figures were overly optimistic.


The most significant user in volume terms is the electricity generation sector, which is expected to increase its demand for water by 23% over the 11 year period. Hydro power sector experts, however, cast doubt on this assumption and it is worth restating that these figures represent the views of the consultant, based on their knowledge at the time of writing. Despite considerable uncertainty regarding the likely electricity mix in 2015; due in part to the lack of any clear decision as to how to fill the gap created by the decommissioning of the ageing power stations at Cockenzie, Longannet and Chapelcross; Table 15 shows the assumed likely mix of generating capacity.

Table 15 Predicted energy mix in Scotland in 2015

Type % of electricity generated
Nuclear 36
Combined-cycle gas turbine 18
Non CCGT gas (i.e. Peterhead) 11
Combined heat and power 5
Wind 15
Hydro 10
Biomass 4
Other renewables 1


The assumptions42 underlying these projections are examined in the Dynamics of Water Use report43

The next most significant user of water comes from fish farming/aquaculture, which is mostly direct abstraction. This sector is expected to increase its water usage by 12% in the period to 2015. Figure 9 shows the projected growth of gross value added (output) in the sector and the resultant increase in water demand.

Figure 9 Forecast Gross Value Added and water demand for Fish Farming.

figure 9


Household demand is also a highly significant use and water use is expected to increase by 2.4%. The population is forecast to continue its slow decline; however the number of households is set to increase as recent demographic trends predict more single parent families and smaller household sizes. Technological improvements in the efficiency of many white goods, although significant, fail to offset this trend. This increase in water usage is depicted in Figure 10.

Figure 10: Forecast total and average per capita water demand 2001 to 2015

figure 10


Agriculture is the only large sector that is forecast to decrease its use of water. Demand is expected to fall by 12% over the period as a result of reforms made to agricultural support mechanisms within the Common Agricultural Policy (CAP), associated intervention price adjustments and world price expectations. For the purpose of this analysis, the models used to forecast future agricultural land use (livestock and cropping numbers) were calibrated to reflect the following policy and market scenario44:

  • a fully decoupled Single Farm Payment (SFP) system replacing the Arable Area Payment, Suckler Cow Premium, Beef Special Premium, Slaughter Premium and Sheep Annual Premium Schemes;
  • a SFP based on historic average claims during a 2000–2002 reference period;
  • Intervention price reductions by 2008 for beef, cereals and milk as laid out by the European Commission in CAP reforms texts;
  • Average world price forecasts to 2010 provided by OECD45 and FAPRI46 for wheat, barley, beef, milk and sheepmeat.

The effects of these assumptions can be seen in Table 16.

Table 16: Basic water demand result for the Agriculture sector

Sub-sector (unit of output) Present activity level Activity level 2015 Annual water use per unit of output/ activity (litres/yr) Water use 2002 (m3/yr) Water use 2015 (m3/yr)
  1,000 head 1,000 head      
Beef cows (hd) 700.6 700.6 12,775 9.0 9.0
Ewes (hd) 5,251.0 4,439.2 991 5.2 4.4
Crops (ha) 1,718.8 1,671,454 2,100 3.6 3.5
Dairy cows (hd) 214.0 214.0 71,540 15.3 15.3
All other cattle (hd) 1,461.2 883.4 10,038 14.7 8.9
Pigs (hd) 483.0 483.0 10,558 5.1 5.1
Poultry (hd) 38,562.0 38,562.0 94 3.6 3.6
Total       56.5 49.8

(Note: Pigs and Poultry numbers assumed unchanged)
* m3/yr= cubic metres per year


Estimates have been produced for various industrial uses (specifically electrical and engineering, fibres and, food and drink) but we are cautious about the data underlying these estimates and so do not spell out a definitive ranking. An important point with all industrial processes is the distinction in terms of public supply and that from private abstraction. The latter raises questions about the location-specific impacts and failure to meet quality targets if abstraction demand increases. Although water use in agriculture is forecast to decline by an eighth there will be significant spatial differences and water demand may increase in certain parts.


42 These assumptions should in no way be taken to represent SEPA’s desired, or preferred situation.

43 http://www.sepa.org.uk/wfd/stake/eas

44 These assumptions should in no way be taken to represent SEPA’s desired, or preferred situation.

45 Organisation for Economic Co-operation and Development

46 Food and Agricultural Policy Research Institute.

 
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