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doc1

1 PRODUCT REVIEWS

1.1 Wet white goods Dish washers and Washing Machines
In 2001 77% of households own a washing machine and the growth in ownership seems to be levelling out. Meanwhile dishwasher ownership continues to rise from 6% of households in 1985 to 25% in 2001 [Environmental Change Institute (DECADE) in dti 2003]. With over 17 million washing machines in use, around 1.2 million reach the end of their life each year in the UK [Simon et al 2001]. We have looked briefly at price and performance issues of washing machines and dishwashers twice before. The first time was for the Agencys Conserving Water in Buildings Fact Cards and the second was for the Watersave Network review of water-efficient technologies. Graph 1 illustrates the usual assumed pattern of higher cost for more efficient machines which then allows a payback to be calculated. Whilst acknowledging this over-cost for efficient machines, we had previously argued that much of the extra cost is due to improved quality and features, with efficiency being a by-product of good design rather than a bolt-on feature that can have a direct cost attributed to it [Grant 2002]. The graph is based on 1997 data and shows that more expensive machines tended to use less water and achieved a higher 'total score' based on 'Which?' test criteria. The 'total score' was based on the following weighting: cleaning performance 36%, running costs, 18%, spinning efficiency 12%, water consumption 12%, time, rinsing, out of balance load and noise: 22%.
Water use Water use litres 80

Total score

Purchase price in 1997
Graph 1 Water use and 'value' against cost for washing machines. Data from 'Which?' 1997.
However, based on the latest Which? data, the old assumption that more efficient machines cost more no longer seems to stand. This has been confirmed by newspaper advertisements and windowshopping with AA rated washing machines available for less than 200. Whilst the de-coupling of price and efficiency supports our hypothesis, the argument is of little use within the current brief when considering white goods, as there is no inherent over-cost to explain. We will however return to the argument when considering other product groups that have not been subject to market transformation. 4

Total Score 010

With a near saturation of A rated models in the market place the revision of EU energy label is necessary to incentivise consumers to differentiate during purchasing decisions, and to facilitate industry commitments or minimum standards to drive market transformation. Market Transformation Program; Policy Brief, UK energy consumption of washing machines. 19/01/03. This suggests that energy labels have had a very positive influence on machine efficiency. The prominent display of the Energy Efficiency Recommended logo and Energy label rating in adverts indicates that the label matters and is currently used as a positive tool in marketing. Looking forward from say 1995 this outcome was not widely predicted. In the Decade second year report [Boardman et al 1995] the section on Energy Labels and washing machines stated: The EU Energy label for washing machines has been approved by the European Commission. The likely effect of this measure is uncertain as the label lists other information, including wash performance , spin speed and noise. The complexity of the washing machine label may mean that the effect is limited, though retail training may improve effectiveness. Certainly from my own experience as a domestic purchaser of a fridge and washing machine in 1999 and 2000, the sales staff were rather bemused that I should be bothered about the details of the Energy Label. This situation has changed.

The following extracts from the Which? web site are reproduced here as they raise a number of relevant issues:
Which? Online August 2000 extract: Inefficient Energy Labels In the past, we've often found energy label ratings on domestic appliances to be inaccurate. However, we didn't test them for this report because we believe the way manufacturers test the efficiency of washing machines does not reflect the way people actually use them. Instead, we've looked at the cleaning performance and annual running costs of the machines on the most commonly used 40C cotton wash program. Our results did not always tally with the information on the energy labels. For example, the Hotpoint Ultima Aquarius was the cheapest to run at around 11 a year, yet its energy efficiency rating is C (the lowest rating). This same model is rated A (the highest rating) for wash performance, but we found it was the worst machine on test for removing stains.
Claimed energy rating water use (1-5, 5=best)
measured energy Rinse (1-5, 5=best)
This machine purchased on basis of energy label rating

Performance (A=5)

Bo s Se W ch
Graph 4. Performance of 12 washing machines tested by 'Which?' in 2001.
Graph 4 shows the data for the Which? January 2001 tests with the claimed and measured energy efficiency plotted on a scale of 1-5 where 5 corresponds to an A rating for energy. The machine highlighted with a star was purchased by the author in 2000 after much research into water and energy use. The WFF 2001 replaced the WFF 2000, which was previously selected by Which? as a best buy whilst also having the lowest water and energy consumption of all the machines on test. The WFF 2001 was claimed to be an improvement on the WFF 2000 and the product literature promised an A rating for energy and 52 litres per wash on a 60C cotton cycle. Our own informal monitoring agrees with Which? with a typical water use of around 80 litres per cycle. The machine was about 200 more expensive than the cheapest machines at the time, which, in hindsight, would have used less water and energy.
W O rv K hi is 2 AE rlp oo G l O KO 11 M00 La AW 1 va H oo G m 32 Bo ve a sc t 6 r Q 13 h ua W 00 tr FF o H ot po 0 A 1 S1 in In de t W 15 M si t W 52 C1 P 1 O ce Mie 3O T le W an W hi W 84 rlp M P 2 o 10 Za ol nu AW 00 ss M A iF 3 LS /0W

Machine

The purpose of this anecdote is to point out that a water and energy consultant who went to considerable trouble, managed to pick the worst performing of the twelve machines that Which? tested in January 2001, because of inaccurate labelling. EU Eco-Label Whilst there seems to be little uptake of the Eco-Label for washing machines or dishwashers in the UK the requirements form a useful benchmark and the committees are addressing many of the issues raised in this report. Water use Energy Washing machine 12 litres/kg 0.17 kW.h/kg Dish Washer 0.625 S1 + 9.25 litres (criteria not found)

Table 1 Eco-Label minimum requirements
These figures translate to 60 litres maximum water use for a 5kg washing machine on a 60C cotton cycle and 16.75 litres per cycle for a 12-place dishwasher. At first glance these figures seem very modest by todays standards for mass-market machines with few exceeding the Eco-Label water or energy usage. The first ad hoc working group meeting for EU Eco-label criteria for washing machines considered revising these figures in September 2002 but decided that reducing the required water consumption could lead to problems of poor rinse performance which is thought to be the limiting factor for reducing water consumption further. Graph 4 appears to support this. The group considered introducing a rinse test but concluded that more work was needed. Exploration of the Eco-Label is incidental to the original brief for this project and so no attempt has been made to follow up on the latest activity. Water Regulations The Water Regulations stipulate a maximum water use of: 27 litres per kilogram load for washing machinesi.e. 135 litres for 5kg 48 litres per kilogram load for washer dryersi.e. 240 litres for 5kg 4.5 litres per place setting for dishwashersi.e. 54 litres for 12 place settings. It is virtually impossible to purchase machines that exceed these maximum water use requirements. Water label? It would be possible to follow the lead of the Energy Saving Trust (EST) and allow manufacturers to add a water efficiency mark for machines using less than an agreed volume. Issues of rinse performance would need to be addressed but the volume testing is already carried out for the Energy Label and issues of verification and trading standards would need to be clarified. The EST energy efficiency recommended label is simply awarded for machines exceeding a certain standard (A) and for water no further differentiation is warranted with current test methods. Candidates for a recommended label might have to use less than 12 l/kg (consensus of eco-label committee) or more controversially say 10 l/kg if rinse performance can be shown to be acceptable for the growing number of machines that exceed this performance. Future ratings could award a + rating for machines with good part load efficiency for example. Other practical issues include the creation of a body to award and administrate such a label.
Where S is the number of place settings.
1.1.3 Risk and uncertainty In predicting savings, for example to determine the Average Incremental Social Cost (AISC) of a measure, we are faced with a number of uncertainties: 1. would the consumer have purchased a less efficient machine without a subsidy given the lack of price/efficiency correlation? 2. does the Energy Label guarantee performance? 3. rebound effects e.g. will the machine be used for smaller loads if it is perceived to use less water and electricity? 1.1.4 Life Cycle impacts If the replacement of working but inefficient machines is to be considered, some attempt must be made to determine the environmental impact of manufacture and disposal. Discussions with a number of experts in the field revealed that a simple Ecopoints type assessment would be too simplistic and that there were no short cuts available to compare water and energy saving with disposal and manufacture impacts. Having said this there seems to be some consensus that, for washing machines and dishwashers, around 90% of the total life time environmental impact is due to operation and only 10% is due to manufacture and disposal. However LCA is an inexact science and final weightings of different impacts are inherently subjective. Graph 5 claims to show the percentage of life cycle environmental impact attributed to manufacture, distribution, use and disposal of dishwashers and washing machines. The graphs illustrate the importance of operational efficiency but do not show the relative environmental impact of, say, water use against solid waste or energy consumption. The environmental impact of manufacture and disposal is said to be equivalent to about one years operation so doubling the operational efficiency should provide a fast environmental payback. Whilst newer machines may use half the water and energy of older machines, detergent use is not necessarily reduced and so the total impact of operation is less than halved. We researched the literature to search for equivalence between the impact of detergent, water and energy but without success. As a crude working assumption (to be challenged) we suggest that if product replacement is financially viable then the ecological savings will also offset the embodied impact of manufacture and disposal.

Graph 10. Water use per 12 place setting cycle for 10 dishwashers. Data from Which? Online Product Picker January 2003.
1.1.7 Conclusions white goods The performance of new machines is converging with steady elimination of inefficient models. It seems likely that the main driver has been the energy label and the obvious prestige of A ratings. The small variations in water use between current models, regardless of price, effectively prevents any reliable predictions of possible benefit from a subsidy scheme. Other uncertainties include the accuracy of manufacturers claims and real world variations such as part-load efficiency, which is not measured by the current energy label methodology. The drop in price of efficient machines does mean that early replacement of an old machine may be economic depending on local water and sewerage prices and the reliability of the new machine. Not everyone in the white goods industry is convinced of the benefits of energy label driven trend. Some think that wash times and rinsing performance have been compromised to achieve good energy label ratings. The alternative direction is for North American style machines with faster wash times and larger capacity. Whilst these machines are far more efficient than their predecessors they could pose a future obstacle to water saving (by influencing the market as well as direct import). It seems likely that current models have reached the limit of water and energy efficiency as measured by Energy Label test methods with full loads. Real-world improvements could be achieved by improved part-load efficiency and control of detergent dosing or by further education of users to only wash full loads with the minimum amount of detergent appropriate to the level of soiling and water hardness. Detergent costs are the largest running cost for dish and washing machines and are likely to represent a significant life cycle impact, possibly greater than water or energy.

1.2 WCs

1.2.1 Introduction Particularly in older properties, WCs typically account for most water used in the home and so become the first target for any efficiency measures. 1.2.2 Base case UK WC cistern volumes were reduced from 13 litres in the 1960s to 11 then to 9.5 litres with dualflush becoming compulsory in 1981. Pull and release gave a half whilst pull and hold gave a full flush. This remained law until 1993 when 7.5 litres was introduced as the maximum flush volume and dual-flush was banned because of anecdotal reports of double flushing causing increased water use compared to single flush. From 1st January 2001 the Water Supply (Water Fittings) Regulations (1999) now specify a maximum flush of 6 litres and allow dual-flush and valve flush mechanisms. The Regulations have been interpreted to allow internal overflows rather than the previous requirement for an external warning pipe. 9 litres is often assumed as an average volume for existing WCs, for example when assessing the impact of a replacement program. Whilst 6 litres may have been considered the base case for new purchases manufacturers claim that about 75%80% of sales are now dual-flush although most of these will be 6/4 litre rather than the lower 6/3 [National Water Conservation Group Minutes of meeting 1st October 2002]. With care, WCs can have a very long service life and are most likely to be replaced for reasons of style rather than failure. 1.2.3 Available technologies Format Most UK WCs are of the wash-down type (rather than the siphonic pan that is almost universal in the US). Suites are usually in one of 5 configurations; close coupled, low level, high level, back to wall concealed cistern and wall hung concealed cistern (see Figure 3). The different formats are mainly chosen on the basis of style and fashion with high level seen as traditional and close coupled and concealed as modern or European. Commercial installations tend to favour concealed cisterns for ease of cleaning and vandal resistance and many domestic ones have recently selected this format for style too. These formats and styles raise at least two issues relevant to this report: 1. Price often price reflects the format. i.e. concealed suites tend to be more expensive to manufacture, sell and install whilst low-level suites tend to be cheaper perhaps with a plastic cistern. Thus prices need to be compared within product groups. 2. Will a replacement fit? Matching preferred style and technology water saving WCs may not be available in the desired style or the replacement may not fit the existing space.

6 litres, quite small variations and uncertainties become very significant. A greater understanding is crucial to: 1. achieve better predictions of demand. 2. prevent active promotion of the wrong measures or barriers to better measures. 3. identify possible requirements for future regulations, standards, promotion, labelling and technology procurement programs. 4. inform water-saving promotional and point of sale materials so that householders can be educated (e.g. WC leak detection, cistern flush adjustment etc). Trial Data Perhaps surprisingly, there is very little good data available on which to base predictions of water saving from low flush WCs. The following table summarises what we have been able to find. Trial Seattle [2] Oregon [3] Canada [4] Bradford [5] Bradford [5] Hereford 1 [8] Hereford 2 [9] WC Theoretical [1] 6/3 6/3 6/3 6/3 4/2 4/3.6 3.6 3.6 3.6 2.4 2.Measured 4.73 4.92 4.20 4.6 4.6 3.83 3.74 Size of Sample 40 WCs. 20 homes 50 ? 1 1
Table 4. Domestic low flush WC trials.
Trial Canada [4] Portsmouth [6] Dome male [7] Dome female Dome male (siphon) Dome female (siphon)

WC 6/3 6/4 6/3 6/6

Theoretical [1] 3.6 4.4 <6 3.6
Measured 4.62 6.1 8.6 (5.4) 6.5 (5.1) 6.2 (5.5) 5.2 (5.5)
Size of Sample ? m+f 177 m+f 160 m+f 160 m+f
Table 5. Commercial low flush WC trials.
Notes on tables (see end for references): 1. Theoretical average flush based on 4 part to 1 full flush i.e. =(4p+1f)/5 2. Aquacraft, Inc.,2000. Seattle Home Water Conservation Study. In Koeller 2002. 3. Pacific Northwest National Laboratories, 2001. In Koeller 2002. 4. Canada Mortgage and Housing Corporation. Presentation at Watersave Network, summarised in Koeller 2002 and report on web site: www.cmhc.ca 5. Trial of dual-flush WCs designed for 4/2 litre flushing but adjusted to 4/2 and 6/3. Coincidentally both settings gave the same average flush volume but the range was 3.16.1 litres/flush @ 4/2 and 3.74.9 litres @ 6/3. The most likely reason being jamming of the mechanism but this was not reported during the trial. 6. Trial of 2 dual-flush WCs in womens toilets at Portsmouth Water office. A Neve 2002. 7. Millennium Dome results. Figures in brackets are after repair and retrofit as jamming valves were identified when the data was analysed. S Hills et al 2001. 8. 5 year monitoring with water meter and flush counter and 4/2 dual-flush WC. 3 male and 1 female. 9. 4-litre siphon flush WC, 1 male 1 female, short-term trial. None of the results in the table were thought to include any inlet valve or flush valve leakage in the usual sense. 17

Theoretical [1]

Measured
Graph 11 illustrating the data in the table.
Components of real world variations Some factors are directly related to product design, some relate to installation and others to user behaviour. Adjustment of flush volume Some WCs are designed to be of a fixed flush volume and the only way to change this is to modify the mechanism. These WCs have a fixed and non-adjustable inlet valve. UK WCs with siphons have a bottom water level (end of flush) set by the siphon dimensions and the top water level set by the inlet valve, which is usually adjusted to an indelible top water line, which should indicate the flush volume. Some inlet valves will bed in over time and the water level can rise. Some (non equilibrium) valves may allow a variation in water level (and so increased or decreased flush volume) as the static water pressure changes. As many siphons are universal the flush volume can often be changed by adding or removing plugs or flaps to achieve, 9, 7.5 or 6-litre flush volumes. Some drop-valves and many flappers achieve the required flush volume by varying the bottom water level and this can often be adjusted after installation. If a WC gives an ineffective flush, the plumber or user may try to increase the flush volume. Thus whilst all WCs available for purchase should have a 6-litre maximum flush this does not guarantee that they will be installed at that volume. In the US kits are available that raise the overflow so that the water level can be raised to increase the flush. A longer term issue is repair and retrofit of new mechanisms which can lead to incorrect flush volumes. Whilst the top water level must be indelibly marked in WC cisterns in order to meet the Regulator's specification, the bottom water level depends on the flush mechanism installed and may be adjustable. Many after market products are adjustable to allow them to be used in cisterns of different shapes and sizes. This has been found to be a significant problem in the US where flappers are the norm but can also happen with drop-valves and siphons.

Cheapest third party certified Currently there are very few WC suites that have been independently certified. Talking with manufacturers, WRAS and Kiwa we were only able to find 11 suites with independent testing to the UK, SoS specification (Feb 2003). Of these two are not yet on the market and so no price was available. No low-level suites were found and all third party approved suites were either close coupled or concealed cistern. Only two budget models were found and these were retailed at 77+Vat (retail, 6litre drop valve from B&Q) and 168 + Vat (trade) for a 6/4 dual-flush, drop valve suite. Although a number of concealed cisterns have been tested the only approved suite was a 4.5 litre siphon flush WC selling for 260 (retail).
Model Adagio Barcelona Geo Harmony Leda Madrid Newport If Cera ES4 Riviera Valencia Ventura Manufacturer Shires Siamp Caroma Caroma Caroma Siamp Caroma Solution Elements Siamp Siamp Armitage Tested WRC/NSF KIWA WRC/NSF WRC/NSF WRC/NSF KIWA WRC/NSF WRC/NSF KIWA KIWA WRC/NSF Cert No. Format Full flush 5.6 4.Part Flush Price Trade flush mechanism ex Vat Retail 3 4.Drop valve Drop valve Drop valve Drop valve Drop valve Drop valve Drop valve Siphon Drop valve Drop valve Siphon 445 Trade RRP RRP RRP RRP Notes
207022 CC CC 207013 CC 207012 CC 207014 CC CC 207015 CC 209103 BTW CC CC 204011 CC

B&Q

B&Q not avail 363 RRP 260 Trade 361 RRP 337 RRP
B&Q B&Q not avail doc m?
Table 8 showing approved WC suites at the time of writing (March 2003). Prices will vary depending on terms and exact specification.
1.2.10 Practical considerations of domestic toilet replacement From the householders perspective it is impossible to make general statements about the economics of WC replacement, or product choice from new, due to the range of compounding variables. For a water company there will be regional variations but other variables will average out. However it may be possible and sensible to target the most cost effective cases first. Without considering extremes or households with their own sewage treatment (<4% of UK) we can consider a realistic low scenario of a working couple living in a new house in the North West versus an equally realistic family of 5 with 3 kids and one working partner in the South West. The new house has two 7.5 litre WC but the family in the South West have an older 9-litre WC. Both replace them with a 6/3 dual-flush toilet bulk purchased and fitted for, say, 200 per WC: Water & sewerage Low scenario 1/m3 High scenario 2.5/m3

House size

WCs per house Flushes/person.day WC volume/flush

2 people

(both working) 7.5

5 people

(young kids and one partner at home) 9

Metered WC use/y

Retrofitting 4.6-litre equivalent flush WCs @ 200/WC: Retro' cost Saving/flush 7.5-4.6 = 2.9 9-4.6 = 4.4 Annual saving 8.47 100

Simple payback

47 years

2 years.

In reality installing 2 WCs would not cost twice as much as installing one.
The two scenarios have a ratio of 23:1 on simple payback due to the compound variables. From a Water Company perspective it is permissible to use average figures as the extremes will cancel. Starting assumptions (provisional as regional data may be available): WC uses per person per day 5 Flush volume of old WC 9 litres Best practice (6/3 or 4.5 single) 4.6 litres actual average flush from evidence Flush volume of standard new 6.2 litres (modest inflow allowance). Household size 2.5 people WCs per household 1.7 [Southern Water personal communication] Cost data (will change quickly) Cost of 4.6-litre equivalent retrofit Over-cost of 4.6-litre from new4 Over-cost of 4.6-litre from newprovisional estimate. 90 (third party certified - price expected to drop) 0 (not third party certified)
It seems reasonable to expect that, for new installations, no over-cost need be attributed to a WC that fits a simple low flush specification (e.g. DEFRA, MTP) as budget WCs are available with 6/4 dualflush cisterns. A higher specification, for example leak free or leak detecting mechanisms, easy maintenance features or delayed action inlet valves may all add cost to a basic specification as could general quality of design and manufacture. Thus, as with white goods, the most important action required would be to ensure that promoted technologies will actually save water whilst encouraging refinements in product designs that will lead to real water savings over the life of the WC. The above assumptions can be used as a basis for estimating an Average Incremental Cost (AIC) for a voucher scheme for a particular water company but the following issues need to be considered: 1. What do we assume for the base case default purchase? With most WC production now claimed to be dual-flush (6/4) it seems unreasonable to assume 6 litres as the default purchase without incentive.
2. What is the real long-term water saving for a low flush WC?
Will valve operated WCs deliver long term savings compared with valve-less models of similar or even higher flush volume? 3. What is the residual life of an existing WC? Given that WCs have a finite life whether due to wear and tear or fashion, it does not seem reasonable to calculate the discounted benefit over the full life of the replacement WC as after, say 5 years, the existing WC may have been due for replacement, already being, say 10 years old. It is estimated that around 140,000 WCs are sold each year for new build whilst about 300,000 are replacements (BRE/MTP Briefing note WC1 Jan 31 2003). It is thought that 50% of domestic WCs are replaced every 16.5 years but it is not known how many of the same WCs are replaced regularly whilst others remain in place for considerably longer.

Dual-flush retrofit trials Two trials of retrofit dual-flush devices, one by Southern and the other by Anglian Water reported very different savings. The Southern trials averaged 27% reduction in WC water consumption (i.e. about 8% reduction in total domestic demand) whilst the Anglian Water Trial averaged only 4% [EA 2001]. With the exception of an electronically actuated dual-flush valve, both studies only tested siphon based retrofits although a number of retrofit valves are now on sale. What we can be fairly sure of is that dual-flush siphon retrofits do not, as was previously claimed, waste water although there is considerable uncertainty about the actual savings that can be achieved. Whilst clearly flawed, the Anglian Water trial compared the old style dual-flush siphons which default to part-flush and the type that are now approved under the regulations for new installations which default to full flush. Whilst actual savings were uncertain, the trial supported our own belief that the traditional logic is more intuitive. Also the part-flush default should force learning in a domestic situation whereas the reverse logic could be used at full flush forever without the hidden part-flush being discovered. Clearly this is still a matter of speculation pending more evidence. Whilst not quite as dangerous, to have both systems installed would be like cars having arbitrary placement of brake and accelerator pedals. Since many existing 9-litre siphons can be converted to old style dual-flush for free by simply removing a plug and adding an instruction sticker, we suggest more research is warranted. For commercial and public applications there are health and drain blockage concerns with a part-flush default (dual or interruptible) and so a different requirement is needed than for domestic. Other aspects of the Water Regulations (and Building Regulations for that matter) are different for domestic and commercial situations so this should not be a barrier. Whereas a single reduced flush volume should give similar savings for metered and un-metered properties, dual-flush requires some ongoing effort. Where water is un-metered (or the users are not part of a trial) savings might reasonably be less. Interestingly the traditional part-flush default (and some interruptible flush devices) require effort to achieve pan clearance and so savings should improve with learning rather than diminish with bounce-back effects as the novelty wears off. Dual-flush retrofit householder economics As with WC replacement the economics for the householder will vary. Using the same scenarios as before: Water & sewage Low scenario 1/m3 High scenario 2.5/m3

1.4.5 Hot water systems conclusions and recommendations Summary Combination boilers can waste water and energy whilst causing annoyance. Solutions are available but the associated energy cost/benefit balance is not yet fully considered in the SEDBUK or SAP rating scheme, which is the current decider for carrots (grants and labels) and sticks (Building Regulations, performance specifications). Provisional recommendations This section is very much a preliminary review, which was carried out by talking with energy consultants and reading general literature followed up by an exploration of the SEDBUK database. The SAP method was skimmed but the assumptions were not fully explored or modelled. Because of time and budget constraints, no attempt was made to contact any specialists involved in developing the SAP and SEDBUK ratings but it is likely that much useful work has already been done and that some of these recommendations may be naive. More research is required to determine: o Actual water wastage due to boiler warm up (water company micro-component metering, 'Trace Wizard' or 'Identiflow' trials etc). o Energy cost of thermal stores (and conventional hot water storage) and keep warm facilities. o Product and market trends. The SEDBUK rating needs to address the energy and water cost-benefit of thermal stores and keep warm facilities and manufacturers need to measure and report this.
OPTIONS APPRAISAL; PRACTICALITIES AND HOUSEHOLD ECONOMICS 2.1 Introduction
This section looks at the economics of a number of appliance replacement options for each product group. These options range from providing incentives for householders to purchase more efficient products when buying new, to appliance exchange programs where old inefficient, but functioning appliances, are removed and replaced with more efficient models. The economics from a water company perspective are covered in the next section.

2.2 White Goods

2.2.1 Option 1 incentive to choose water efficient machines As discussed in the white goods section, the differences in water and energy use between machines have reduced to the point where: 1. The differences are small enough to make product differentiation unreliable by energy label data alone. 2. Driving water use even lower may be counter-productive unless the labelling scheme were to measure rinse performance and part-load efficiency. 3. Most products are now 'water and energy efficient' so any water company economic calculation would have to assume that many purchases would have been water efficient by default. For dishwashers the daily water use is low enough that variations only account for a few litres per day as the data in the report shows. Thus further analysis for dishwashers will not be carried out. From the householder's point of view, whilst lower energy and water use would have a payback, the energy label data does not seem accurate enough to allow such a calculation to be made reliably. At best, cost savings will be modest. Optimising detergent use and choosing a reliable machine with low maintenance costs can have greater economic environmental, savings. If further improvements are to be made it seems likely that the energy label will need to evolve to reflect real world use with frequent part loads and poor control of detergent dosing etc. Even for washing machines, meaningful cost benefit calculations cannot be carried out either for the householder or the water company, as claimed performance variations are less than the 'noise6'. 2.2.2 Option 2 appliance replacement Since water and energy efficiency have improved significantly over the last few years, this scenario is perhaps clearer as most new machines can be expected to use half the water of older machines. The main uncertainties when calculating the economics are: 1. Residual life of the old machine. 2. Energy label inaccuracies for new machine. 3. Life span and reliability of the new machine. Whilst any number of scenarios can be calculated the following example is illustrative: Base case is a 5-year-old machine, which has to be replaced after another 5 years at an estimated cost of 250 at current prices. The replacement machine is assumed to have an annual running cost of 60 E.g. disparity between energy label and actual, part load efficiencies, user behaviour, variable features such as 'extra rinse' cycles etc. 38

2.3 WCs

2.3.1 Option 1 dual-flush retrofit Where appropriate and if made legal, dual-flush retrofit appears to present a cost effective option for demand management in a domestic setting. Domestic economics As already outlined, the economics will vary considerably from house to house. Varying just household size and location from 4 people in the South West to a single person in Northumbria and using the following assumptions we can plot the cumulative saving against time discounted at 6%:
WC uses/person.day Water & sewage cost Population Number of WCs Days/year Discount rate Installed cost/WC 5 2.40
Table 15. Assumptions for the two scenarios plotted in Graph 17.
The Energy Saving Trust label is simply based on the Energy Label data without further testing or evaluation so at a basic level, only requires agreement on the threshold standard. 40

400 NPV of saving 1 -7

Family of 4 in South West Single person in North West

21 Year

Graph 17. Net present value of saving for two scenarios with 6% discount rate.
2.3.2 Option 2 incentive to purchase 'ultra low flush' from new As with white goods there is evidence that efficient WCs can be produced for little over-cost. Also in common with white goods, now that all flush volumes must be below 6 litres, it is difficult to predict accurate real world savings between models. The uncertainty is increased now that valve mechanisms introduce the issue of leakage and sticking mechanisms. Graph 18 indicates the modest savings that are likely and which could easily be negated by any increased maintenance costs or leakage or a more complex mechanism. Again the economics will vary but as an example we will consider the potential saving to be had from installing a 4.6-litre equivalent flush WC rather than a 6-litre WC. Zero over-cost was assumed but the axis can be shifted to represent any over-cost.
WC volume WC uses/person.day Water & sewerage cost Population Number of WCs Days/year Discount rate installed cost/WC scenario A 4.1.5 2.150 scenario B 4.1.6 150
Table 16 showing assumptions for graph below. 4.6-litre WC installed instead of 6-litre.
250 PV sum of saving scenario A, 2.5 person house 200 NPV of saving PV sum of saving scenario B, 4 person house.
Graph 18. Discounted NPV of saving when installing a 4.6-litre effective flush in place of a 6-litre flush WC.

2.5 Direct water heating

Due to time and budget constraints a full appraisal of water and energy related to water heating was not possible as part of this project. However it is unlikely that savings could ever be great enough to justify an appliance exchange program on water saving grounds alone. The main avenue for action would be to ensure that water wastage considerations are included in any future performance requirements that are developed. Some sophisticated modelling is required to balance energy and water considerations where these might conflict11. ((80 litres x 30K x 4190J/kg)/(3600 seconds x 1000)) x 1.25. 6 minutes @ 10.8kW.h = 0.1h x 10.8kW.h. 11 A conflict is not inherent but cheaper solutions to the warm up problem might be energy wasteful e.g. compare with trace heating of dead legs and pumped secondary water loops.
3 APPLIANCE REPLACEMENT; WATER COMPANY ECONOMICS 3.1 Introduction
The complex issues of calculating the economics of demand and supply side measures is covered in depth by others elsewhere, for example UKWIR and Environment Agency, 1996. For the purposes of this report we have focussed on practical issues relating to specific product groups. This report has identified number of issues that present a barrier to appliance exchange or similar programs. For example if for a given product, savings are uncertain, water use labelling is inaccurate or installation is complicated by issues of compatibility, then we are not in a good position to estimate the economics of a replacement or promotion program. For the purpose of this section we will temporarily put aside fixable issues such as accuracy of manufacturers claims so that a range of Average Incremental Costs (AIC) can be determined. The results presented in this report should be considered as worked examples rather than absolute values, which must be calculated using project-specific data. The six scenarios have been selected to illustrate a range of issues and should not be considered as recommendations of optimum demand management strategies nor should they restrict the exploration of other demand management options.

3.2 Method

Values for AIC or Average incremental Social Cost (AISC) are often quoted but are meaningless without a statement of assumptions used. For the purposes of this work we have not attempted to include a social cost but where there is a social cost or benefit this has been stated. Similarly the social and environmental cost or benefit of water saved has been ignored, as this is very location specific. To calculate the AIC of a proposed efficiency measure we have used the following formula:
Where: C = discounted present sum of the cost of the water saving measure in pounds sterling, over time horizon of option S = discounted present sum of opex saving for water and sewerage not pumped and treated () m = discounted present sum of maintenance cost of water saving measures (zero for these examples) W = discounted present sum of total water saved, megalitres. The result is in pence/m3. Calculations were carried out using a spreadsheet developed by the Environment Agency based on the principles of UKWIR and Environment Agency 1996.

CS+m 10.W

3.3 Assumptions
The main variables when calculating the AIC of a proposed measure are: Discount rate Opex savings Loss of revenue Cost of implementing measure (including administration) Timeframe Implementation period Life of option Water saving
Discount rate A discussion is outside the scope of this report however at the time of writing the Treasury quote 3.5%. For shorter-term measures small changes in the discount rate have little effect. Opex savings If less water is delivered and subsequently treated as sewage then savings will result. We have used an estimate of 6p/m3 from OFWAT but the value is not critical (Day 2003). Loss of revenue Revenue loss has been ignored in our calculations as OFWAT have indicated that revenue lost by water efficiency measures can be recouped: 'Where demand management is part of efficient water resource plan we will: allow capital & operating costs in price limits make allowance for the expected loss of revenues (if measured demand affected)' George Day, OFWAT. Speaking at the Watersave meeting, Loughborough, 11 December 2001. Cost of implementing measure This might be the cost of installing a given water efficiency measure such as dual-flush devices or replacement WCs or it might be a voucher or subsidy that represents the required incentive for a householder to choose a water efficient option. Timeframe A 30-year timeframe has been used. Implementation period Whether a thousand water saving devices are installed over one year or 10 years will not change the calculated AIC within a 30 year timeframe. In reality the situation will change over time. Thus if we look at say a voucher scheme to encourage purchasers to choose the most efficient washing machines, it is likely that the market will have changed considerably in even one year so that the scheme, or at least the calculated AIC might be inappropriate. We do not know how the market for say WCs or washing machines will go in even two years time. For example all products might evolve towards a common standard driven by market forces so that differentiation is not possible. Alternatively a more sophisticated labelling scheme might be able to identify even greater real world variations between products so that a voucher scheme becomes very relevant. As a third scenario consumers may demand bigger and faster washing machines that use more water. With this scenario the potential savings (or reduced 'wastage') might be more significant but the required incentive might be greater as consumers would actually have a preference for the 'wasteful' machine, a situation analogous to showers. Such concerns about the difficulty in predicting trends are particularly justified when options are being evaluated over a 25 to 30 year timeframe. The choice of implementation period is closely tied to the life of proposed options discussed below. Assuming that proposed measures are voluntary then the period over which an option is implemented will depend on the rate of natural uptake and the rate at which a measure can be practically implemented including any lead times. Life of options The life assumed has a very significant influence on the calculated AIC. When evaluating new installations, ie an efficient product is purchased in preference to a less efficient one, then the product life is used and we might assume that the efficient and inefficient product have a similar life span. Where a part worn appliance is replaced with new or modified to improve performance (e.g. dualflush retrofit or WC replacement) then we suggest that the residual life of the old product should be used in preference to the life of the new product or the expected life of the retrofit device. 45

 

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