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PRB Hydronomic Convention 2006. 13thHydronomic Convention 2006. 13th--14th November 2006, Barcelona14th November 2006, Barcelona

Prices and CostsPrices and Costs recoveryrecovery ofof thethe water water services in Denmarkservices in Denmark

Harley Bundgaard Madsen Harley Bundgaard Madsen Head ofHead of Department, Fyn County, Denmark Department, Fyn County, Denmark

1. 1. IntroductionIntroduction2.2. Legislation and structureLegislation and structure ofof water services in water services in

DenmarkDenmark3.3. WaterWater supply supply –– consumption and pricesconsumption and prices4.4. WastewaterWastewater treatment treatment –– Effectiveness and Effectiveness and

pricesprices5.5. CostsCosts RecoveryRecovery6.6. TheThe economiceconomic significancesignificance ofof waterwater use in use in

Odense River BasinOdense River Basin7.7. TheThe economiceconomic significancesignificance ofof the WFD in the WFD in

Odense River BasinOdense River Basin8.8. ConclusionsConclusions

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PRBStructureStructure ofof water services in Denmarkwater services in DenmarkLegislationLegislation

A clear and consistent legal system for A clear and consistent legal system for the provision ofthe provision of water serviceswater servicesTheThe counties (from 2007 thecounties (from 2007 the state) arestate) areresponsible for:responsible for:

The overall waterThe overall water planning and monitoring planning and monitoring (WFD etc.)(WFD etc.)Extraction and wastewaterExtraction and wastewater permits and permits and supervision ofsupervision of wastewaterwastewater dischargesdischarges

TheThe municipalitiesmunicipalities areare responsible for:responsible for:TheThe waterwater supply and thesupply and the wastewaterwastewatertreatment and infrastructuretreatment and infrastructure 3

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PRBStructureStructure ofof water services in Denmarkwater services in DenmarkWaterWater supply supply –– consumption and pricesconsumption and prices

TheThe danishdanish waterwater supply is highlysupply is highlydecentralizeddecentralized99% of99% of thethe drinkingdrinking waterwater derives from derives from groundwatergroundwater165 utilities165 utilities areare owned by localowned by local authorities authorities (municipalities) and 2575 are private(municipalities) and 2575 are privateThe total drinkingThe total drinking waterwater extraction in DK is extraction in DK is about 405 mill. m3/year (61% public and 39% about 405 mill. m3/year (61% public and 39% private)private)DeliveryDelivery ofof water: 75 m3/person/yearwater: 75 m3/person/year

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PRBStructureStructure ofof water services in Denmarkwater services in DenmarkWaterWater supply supply –– consumption and pricesconsumption and prices

26% decline in water26% decline in water consumption:consumption:In 1992: 101 m3/personIn 1992: 101 m3/personIn 2004: 75 m3/person In 2004: 75 m3/person

TheThe useuse ofof water from thewater from the waterwater supplies is supplies is divideddivided into:into:

61% to households (128 litres/person/day in 2001)61% to households (128 litres/person/day in 2001)26% to industri26% to industri7% to institutions7% to institutions6% is water6% is water lossloss

TheThe greatgreat decline in waterdecline in water consumption is due consumption is due to a reductionto a reduction ofof waterwater use in householdsuse in householdsmainlymainly becausebecause ofof instalmentinstalment ofof water meters water meters in all housesin all houses

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PRBStructureStructure ofof water services in Denmarkwater services in DenmarkWaterWater supply supply –– consumption and pricesconsumption and prices

ConnectionConnection feefee in thein the cities: 1625 EURO/onecities: 1625 EURO/one--family family house (average)house (average)ConnectionConnection feefee in rural areas: 2229in rural areas: 2229--9492 EURO/one9492 EURO/one--family housefamily houseDrinkingDrinking waterwater feefee (average):(average):

Variable: 0.58 EURO/m3Variable: 0.58 EURO/m3Fixed: 42 EUROFixed: 42 EURO

Green taxGreen tax onon drinkingdrinking water: 0.66 EURO/m3water: 0.66 EURO/m3ValueValue addedadded tax (VAT) is not included in thetax (VAT) is not included in the feesfees

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PRBStructureStructure ofof water services in Denmarkwater services in DenmarkWastewater treatment Wastewater treatment –– Effectiveness Effectiveness

and costsand costsAbout 90% ofAbout 90% of the houses arethe houses are connected to connected to public seweragepublic sewerage networknetworkThere are1600 wastewaterThere are1600 wastewater treatmenttreatment plants in plants in Denmark. 1400 ofDenmark. 1400 of thesethese are public and owned are public and owned by theby the municipalities.municipalities.50% of50% of thethe wastewater is treated in only 25 wastewater is treated in only 25

plants > 100,000 PEplants > 100,000 PEHalfHalf ofof thethe sewagesewage derives from households derives from households and theand the otherother half from the industrihalf from the industri50% combined50% combined sewer systems and 50% sewer systems and 50% separatedseparated sewer systemssewer systems

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PRBStructureStructure ofof water services in Denmarkwater services in DenmarkWastewater treatment Wastewater treatment –– Effectiveness and Effectiveness and

pricespricesVeryVery effectiveeffective wastewaterwastewater treatment in treatment in thethe cities: 99% BODcities: 99% BOD--removal; 95% Nremoval; 95% N--removal and 98% Premoval and 98% P--removalremovalConnectionConnection fee: 4,000 EUROfee: 4,000 EUROVariable fee: 2 EURO/m3 (average)Variable fee: 2 EURO/m3 (average)Green taxGreen tax onon wastewater is paid by thewastewater is paid by theownerowner ofof thethe treatment plant and treatment plant and dependsdepends onon thethe degreedegree ofof treatmenttreatment

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PRBStructureStructure ofof water services in Denmarkwater services in DenmarkCostsCosts RecoveryRecovery

In all: Price ofIn all: Price of waterwater supply and wastewatersupply and wastewaterpaid by thepaid by the consumer: 3.3consumer: 3.3--8.8 EURO/m3 8.8 EURO/m3 (median: 5 EURO/m3)(median: 5 EURO/m3)TheThe waterwater price is split into:price is split into:

21% to the21% to the waterwater supplysupply44% to the44% to the wastewaterwastewater35% to the35% to the danishdanish state state

The services areThe services are basedbased onon thethe fullfull costcostrecoveryrecovery principle: Financial balance betweenprinciple: Financial balance betweenthethe costs and thecosts and the income over a periodincome over a period of time of time (few(few years)years) 9

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PRB

feexx

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PRB

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WaterWater bill in Denmarkbill in Denmarkcomparedcompared withwith otherothercontriescontries

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PRB EU WFD EU WFD -- Test AreasTest Areas

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PRB Odense Pilot River BasinOdense Pilot River BasinDenmark, EuropeDenmark, Europe

Lake Bryrup

Odense Fiord

Power plantPower plant

Area: 1050 km2 250.000 inhabitants

Natura 2000 areas Odense City

(180.000 inhab.)

Odense River

Odense Fjord

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PRB ODENSE Pilot River BasinODENSE Pilot River BasinArticle 5 Article 5 –– Risk AnalysesRisk Analyses

Odense FjordOdense Fjordcatchmentcatchment

WaterWaterbodiesbodiesat riskat risk

Main PressuresMain PressuresReasons for not fulfilling objectives

RiversRivers 96%96% PhysicalPhysicalRegulation of river and river valley’s due to Regulation of river and river valley’s due to

land reclamation for agricultural purposeland reclamation for agricultural purposeWaste Water outlets Waste Water outlets

storm water, scattered settlementsstorm water, scattered settlements

LakesLakes 86%86% Nutrient loads from agricultureNutrient loads from agriculture

Coastal watersCoastal waters 100%100% Nutrient Loads from agricultureNutrient Loads from agricultureHazardous substancesHazardous substances

Groundwater Groundwater tablestables

50%50% Nitrate load and Hazardous substancesNitrate load and Hazardous substancesHigh abstractionHigh abstraction

Odense Fjord

Pressures

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PRB ProgrammeProgramme ofof MeasuresMeasuresConceptual DiagramConceptual Diagram

Agriculture PhysicalConditions

Householdsand Industri

Env. Objectives Env. ConditionsEconomy ok?- Cost effectiveness- Disproportional? Max. acceptable

loading

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PRB IntegratedIntegrated ProgrammeProgramme ofofMeasuresMeasures

Arreskov lake

Store Øre lake

Sorte lake Brænde-gård lake

Nørre lake

Ground water Ground water

Odense River Basin Ground water

50% retention

80% retention80% retention80% retention80% retention

80% retention

50% retention50% retention

Søbo lake Nørre Søby lake

Lange lake Fjellerup lakeDallund lake Brahe Trolle Slotslake

Ground waterGround water

Odense Fjord

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PRB Odense Pilot River BasinOdense Pilot River BasinThe most costThe most cost--effectiveeffective ProgrammeProgramme ofof MeasuresMeasures

to achieveto achieve Good Status in surface and groundwaterGood Status in surface and groundwater

Socio-economic annual costs, 1.000 DKK (1 DKK = 0,13 EUR)

Baseline Sc. 1 Sc. 2

Total 126,000 93,965 100,117

Increased environmental efficiency in agriculture 3,000 6,461 7

Set aside* 5,000 22,430 35,035

Set aside with regard to physical and hydro-morphologicalimprovements (watercourses) 10,338 10,338

Measures to improve the quality of groundwater 14,832 14,832

Measures to reduce point source pollution 118,000 39,904 39,904

*Set aside includes conversion of agricultural practice to e.g. forest, wetlands or permanent grassland17

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PRB EconomicEconomic AnalysesAnalysesExpensesExpenses for for WaterWater UseUse in Odense River in Odense River BasinBasin

millmill. DKK/. DKK/yearyear (1 DKK = 0.13 EURO)(1 DKK = 0.13 EURO)

WaterWaterchargecharge

WasteWaste--waterwaterchargecharge

VAT, VAT, taxestaxesetc.etc.

TotalTotal IncomeIncome//productionproductionvaluevalue

% % ofof IncomeIncome//productionproductionvaluevalue

HouseholdsHouseholds 8080 140140 130130 350350 33,75033,750 1.01.0

IndustryIndustry and and servicesservices

5454 158158 66 218218 80,05080,050 0.30.3

AgricultureAgriculture 3434 22 88(APAE II)(APAE II)

4444 2,8002,800 1.61.6

TotalTotal((WFDWFD--ArticleArticle 5 )5 )

168168 300300 144144 612612 116,600116,600 0.5%0.5%

WFDWFD--baselinebaseline

(126)(126)

WFDWFD--PoMPoM 9494

TotalTotal 706706 116,600116,600 0.6%0.6%18

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PRBPrices and Prices and CostsCosts recoveryrecovery ofof thethe waterwaterservices in Denmarkservices in Denmark

ConclusionsConclusionsDenmark has a clear and consistent legal system for the provisioDenmark has a clear and consistent legal system for the provision of water n of water services. services. Nearly all Danish drinking water derives from groundwater.Nearly all Danish drinking water derives from groundwater.Over the last 10 yearOver the last 10 year--period, the household consumption of water has declined period, the household consumption of water has declined 26%. 26%. The amount of water use is about 128 litres/capita/day.The amount of water use is about 128 litres/capita/day.The consumer normally receives one overall bill for drinking watThe consumer normally receives one overall bill for drinking water, wastewater, er, wastewater, green taxes and VAT.green taxes and VAT.The median price of water supply and wastewater treatment paid bThe median price of water supply and wastewater treatment paid by the consumer y the consumer is about 5 EURO/m3.is about 5 EURO/m3.The water price paid by the consumer is split into 21% to the waThe water price paid by the consumer is split into 21% to the water supplies, 44% ter supplies, 44% to the wastewater, and the Danish State receive about 35%.to the wastewater, and the Danish State receive about 35%.TheThe services services areare basedbased onon thethe fullfull costcost recoveryrecovery principleprinciple..ComparedCompared withwith otherother contriescontries thethe total total waterwater billbill in Denmark is in Denmark is ratherrather expensiveexpensivebut but thethe qualityquality ofof thethe waterwater services services areare alsoalso in top.in top.In Odense River In Odense River BasinBasin thethe expensesexpenses for for thethe currentcurrent waterwater services services equalsequals 0.5% 0.5% ofofthethe total total incomeincome and and productionproduction valuevalue in in thethe basinbasinTheThe Odense Pilot River Odense Pilot River BasinBasin projectproject shows, shows, thatthat implementingimplementing thethe WFD in WFD in thethebasinbasin willwill increaseincrease thethe expensesexpenses for for waterwater services to 0.6% services to 0.6% ofof thethe total total incomeincome//productionproduction valuevalue in in thethe basinbasin..

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PRBHydronomicHydronomic ConventionConvention 2006. 13th2006. 13th--14th November 2006, Barcelona14th November 2006, Barcelona

Prices and Prices and CostsCosts recoveryrecovery ofof thethe waterwaterservices in Denmarkservices in Denmark

ThankThank youyou for for youryour attention…attention…