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Odense
PRB




                                                                                         Fyns Amt Natur- og Vandmiljøafdelingen
         Hydronomic Convention 2006. 13th-14th November 2006, Barcelona
         Prices and Costs recovery of the water
                  services in Denmark
                            Harley Bundgaard Madsen
                    Head of Department, Fyn County, Denmark


               1.    Introduction
               2.    Legislation and structure of water services in
                     Denmark
               3.    Water supply – consumption and prices
               4.    Wastewater treatment – Effectiveness and
                     prices
               5.    Costs Recovery
               6.    The economic significance of water use in
                     Odense River Basin
               7.    The economic significance of the WFD in
                     Odense River Basin
               8.    Conclusions                                      PRB_Maastricht_31okt03.NR
Odense
PRB
  Structure of water services in Denmark




                                                                      Fyns Amt Natur- og Vandmiljøafdelingen
                       Legislation

         A clear and consistent legal system for
         the provision of water services
         The counties (from 2007 the state) are
         responsible for:
           The overall water planning and monitoring
           (WFD etc.)
           Extraction and wastewater permits and
           supervision of wastewater discharges
         The municipalities are responsible for:
           The water supply and the wastewater
           treatment and infrastructure                                          3
                                                   PRB_Maastricht_31okt03.NR
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                                                                        Fyns Amt Natur- og Vandmiljøafdelingen
  Structure
     Structure of water services in Denmark
             Water supply – consumption and prices


         The danish water supply is highly
         decentralized
         99% of the drinking water derives from
         groundwater
         165 utilities are owned by local authorities
         (municipalities) and 2575 are private
         The total drinking water extraction in DK is
         about 405 mill. m3/year (61% public and 39%
         private)
         Delivery of water: 75 m3/person/year
                                                                                   4
                                                     PRB_Maastricht_31okt03.NR
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                                                                            Fyns Amt Natur- og Vandmiljøafdelingen
  Structure
     Structure of water services in Denmark
             Water supply – consumption and prices


         26% decline in water consumption:
           In 1992: 101 m3/person
           In 2004: 75 m3/person
         The use of water from the water supplies is
         divided into:
           61% to households (128 litres/person/day in 2001)
           26% to industri
           7% to institutions
           6% is water loss
         The great decline in water consumption is due
         to a reduction of water use in households
         mainly because of instalment of water meters
         in all houses
                                                                                                      5
                                                         PRB_Maastricht_31okt03.NR
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                                                                           Fyns Amt Natur- og Vandmiljøafdelingen
  Structure
     Structure of water services in Denmark
             Water supply – consumption and prices


         Connection fee in the cities: 1625 EURO/one-family
         house (average)
         Connection fee in rural areas: 2229-9492 EURO/one-
         family house
         Drinking water fee (average):
            Variable: 0.58 EURO/m3
            Fixed: 42 EURO
         Green tax on drinking water: 0.66 EURO/m3
         Value added tax (VAT) is not included in the fees



                                                                                                     6
                                                        PRB_Maastricht_31okt03.NR
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 Structure of water services in Denmark
PRB




                                                                     Fyns Amt Natur- og Vandmiljøafdelingen
    Wastewater treatment – Effectiveness
                 and costs
         About 90% of the houses are connected to
         public sewerage network
         There are1600 wastewater treatment plants in
         Denmark. 1400 of these are public and owned
         by the municipalities.
          50% of the wastewater is treated in only 25
         plants > 100,000 PE
         Half of the sewage derives from households
         and the other half from the industri
         50% combined sewer systems and 50%
         separated sewer systems
                                                                                               7
                                                  PRB_Maastricht_31okt03.NR
Odense
  Structure of water services in Denmark
PRB




                                                                 Fyns Amt Natur- og Vandmiljøafdelingen
  Wastewater treatment – Effectiveness and
                   prices
         Very effective wastewater treatment in
         the cities: 99% BOD-removal; 95% N-
         removal and 98% P-removal
         Connection fee: 4,000 EURO
         Variable fee: 2 EURO/m3 (average)
         Green tax on wastewater is paid by the
         owner of the treatment plant and
         depends on the degree of treatment
                                                                                           8
                                              PRB_Maastricht_31okt03.NR
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  Structure of water services in Denmark




                                                                           Fyns Amt Natur- og Vandmiljøafdelingen
                      Costs Recovery

         In all: Price of water supply and wastewater
         paid by the consumer: 3.3-8.8 EURO/m3
         (median: 5 EURO/m3)
         The water price is split into:
           21% to the water supply
           44% to the wastewater
           35% to the danish state
         The services are based on the full cost
         recovery principle: Financial balance between
         the costs and the income over a period of time
         (few years)                                                                                 9
                                                        PRB_Maastricht_31okt03.NR
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                                 Fyns Amt Natur- og Vandmiljøafdelingen
                     fee
         xx




                                            10
              PRB_Maastricht_31okt03.NR
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                                           Fyns Amt Natur- og Vandmiljøafdelingen
Water bill in Denmark
compared with other
contries



                                               11
                        PRB_Maastricht_31okt03.NR
Odense

         EU WFD - Test Areas
PRB




                                                  Fyns Amt Natur- og Vandmiljøafdelingen
                                                      12
                               PRB_Maastricht_31okt03.NR
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         Odense Pilot River Basin
PRB




                                                                                           Fyns Amt Natur- og Vandmiljøafdelingen
                                       Denmark, Europe
                                                                   Odense Fjord



                                                    Natura 2000
         L ke B
          a    ryrup

                                                    areas          Odense City
                                                                   (180.000 inhab.)
                       Ode nse Fiord


                                                                  Odense River




                                                 Area: 1050 km2
                                                 250.000 inhabitants

                                                    Power plant



                                                                                               13
                                                                        PRB_Maastricht_31okt03.NR
Odense
                 ODENSE Pilot River Basin
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                                                                                                          Fyns Amt Natur- og Vandmiljøafdelingen
                    Article 5 – Risk Analyses



            Odense Fjord




    Odense Fjord    Water                    Main Pressures                        Pressures
                                    Reasons for not fulfilling objectives
     catchment      bodies
                    at risk
   Rivers              96%    Physical
                                   Regulation of river and river valley’s due to
                                  land reclamation for agricultural purpose
                              Waste Water outlets
                                    storm water, scattered settlements
   Lakes               86%    Nutrient loads from agriculture

   Coastal waters     100%    Nutrient Loads from agriculture
                              Hazardous substances
   Groundwater         50%    Nitrate load and Hazardous substances
   tables                     High abstraction
                                                                                                              14
                                                                                       PRB_Maastricht_31okt03.NR
Odense

            Programme of Measures
PRB




                                                                          Fyns Amt Natur- og Vandmiljøafdelingen
                         Conceptual Diagram



                            Env. Objectives   Env. Conditions
  Economy ok?
  - Cost effectiveness
                            Max. acceptable
  - Disproportional?

                                loading
         Households                            Physical
                              Agriculture
         and Industri                         Conditions



                                                                              15
                                                       PRB_Maastricht_31okt03.NR
Integrated Programme of
Odense
PRB




                                                                                                                                             Fyns Amt Natur- og Vandmiljøafdelingen
                 Measures

                                                Odense Fjord
                                                   Odense River
                                                                         80% retention
                                                      Basin                              Ground water



                                                50% retention




                                                                                                      Brahe Trolle
            Arreskov lake      Søbo lake   Nørre Søby    Lange lake   Dallund lake   Fjellerup lake
                                                                                                       Slotslake
                                              lake

                          50% retention                                                      50% retention


                            Store                                                             Brænde-
             Sorte lake                                                                                      Nørre lake
                            Øre lake                                                          gård lake

           80% retention                       80% retention                 80% retention            80% retention

         Ground water                              Ground water        Ground water                   Ground water




                                                                                                                                                 16
                                                                                                                          PRB_Maastricht_31okt03.NR
Odense
                Odense Pilot River Basin
PRB




                                                                                                                    Fyns Amt Natur- og Vandmiljøafdelingen
        The most cost-effective Programme of Measures
      to achieve Good 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-morphological
   improvements (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 grassland
                                                                                                                        17
                                                                                                 PRB_Maastricht_31okt03.NR
Odense
                             Economic Analyses
PRB




                                                                                                        Fyns Amt Natur- og Vandmiljøafdelingen
                   Expenses for Water Use in Odense River Basin
                            mill. DKK/year (1 DKK = 0.13 EURO)
                   Water     Waste-   VAT,        Total   Income/production   % of Income/
                                                          value
                   charge    water    taxes                                   production
                                                                              value
                             charge   etc.
Households         80        140      130         350     33,750              1.0


Industry and       54        158      6           218     80,050              0.3
services

Agriculture        34        2        8           44      2,800               1.6
                                      (APAE II)

Total              168       300      144         612     116,600             0.5%
(WFD-Article 5 )
 WFD-



WFD-                                              (126)
baseline
WFD-PoM                                           94

Total                                             706     116,600             0.6%
                                                                                                            18
                                                                                     PRB_Maastricht_31okt03.NR
Prices and                Costs recovery of the water
Odense
PRB




                                                                                                       Fyns Amt Natur- og Vandmiljøafdelingen
                          services in Denmark
                              Conclusions
         Denmark has a clear and consistent legal system for the provision of water
         services.
         Nearly all Danish drinking water derives from groundwater.
         Over the last 10 year-period, the household consumption of water has declined
         26%.
         The amount of water use is about 128 litres/capita/day.
         The consumer normally receives one overall bill for drinking water, wastewater,
         green taxes and VAT.
         The median price of water supply and wastewater treatment paid by the consumer
         is about 5 EURO/m3.
         The water price paid by the consumer is split into 21% to the water supplies, 44%
         to the wastewater, and the Danish State receive about 35%.
          The services are based on the full cost recovery principle.
         Compared with other contries the total water bill in Denmark is rather expensive
         but the quality of the water services are also in top.
         In Odense River Basin the expenses for the current water services equals 0.5% of
         the total income and production value in the basin
         The Odense Pilot River Basin project shows, that implementing the WFD in the
         basin will increase the expenses for water services to 0.6% of the total
         income/production value in the basin.

                                                                                                           19
                                                                                    PRB_Maastricht_31okt03.NR
Odense
         Hydronomic Convention 2006. 13th-14th November 2006, Barcelona
PRB




                                                                                       Fyns Amt Natur- og Vandmiljøafdelingen
     Prices and Costs recovery of the water
              services in Denmark


          Thank you for
          your attention…




                                                                    PRB_Maastricht_31okt03.NR

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Precios y Costes de los Servicios del Agua en Dinamarca

  • 1. Odense PRB Fyns Amt Natur- og Vandmiljøafdelingen Hydronomic Convention 2006. 13th-14th November 2006, Barcelona Prices and Costs recovery of the water services in Denmark Harley Bundgaard Madsen Head of Department, Fyn County, Denmark 1. Introduction 2. Legislation and structure of water services in Denmark 3. Water supply – consumption and prices 4. Wastewater treatment – Effectiveness and prices 5. Costs Recovery 6. The economic significance of water use in Odense River Basin 7. The economic significance of the WFD in Odense River Basin 8. Conclusions PRB_Maastricht_31okt03.NR
  • 2.
  • 3. Odense PRB Structure of water services in Denmark Fyns Amt Natur- og Vandmiljøafdelingen Legislation A clear and consistent legal system for the provision of water services The counties (from 2007 the state) are responsible for: The overall water planning and monitoring (WFD etc.) Extraction and wastewater permits and supervision of wastewater discharges The municipalities are responsible for: The water supply and the wastewater treatment and infrastructure 3 PRB_Maastricht_31okt03.NR
  • 4. Odense PRB Fyns Amt Natur- og Vandmiljøafdelingen Structure Structure of water services in Denmark Water supply – consumption and prices The danish water supply is highly decentralized 99% of the drinking water derives from groundwater 165 utilities are owned by local authorities (municipalities) and 2575 are private The total drinking water extraction in DK is about 405 mill. m3/year (61% public and 39% private) Delivery of water: 75 m3/person/year 4 PRB_Maastricht_31okt03.NR
  • 5. Odense PRB Fyns Amt Natur- og Vandmiljøafdelingen Structure Structure of water services in Denmark Water supply – consumption and prices 26% decline in water consumption: In 1992: 101 m3/person In 2004: 75 m3/person The use of water from the water supplies is divided into: 61% to households (128 litres/person/day in 2001) 26% to industri 7% to institutions 6% is water loss The great decline in water consumption is due to a reduction of water use in households mainly because of instalment of water meters in all houses 5 PRB_Maastricht_31okt03.NR
  • 6. Odense PRB Fyns Amt Natur- og Vandmiljøafdelingen Structure Structure of water services in Denmark Water supply – consumption and prices Connection fee in the cities: 1625 EURO/one-family house (average) Connection fee in rural areas: 2229-9492 EURO/one- family house Drinking water fee (average): Variable: 0.58 EURO/m3 Fixed: 42 EURO Green tax on drinking water: 0.66 EURO/m3 Value added tax (VAT) is not included in the fees 6 PRB_Maastricht_31okt03.NR
  • 7. Odense Structure of water services in Denmark PRB Fyns Amt Natur- og Vandmiljøafdelingen Wastewater treatment – Effectiveness and costs About 90% of the houses are connected to public sewerage network There are1600 wastewater treatment plants in Denmark. 1400 of these are public and owned by the municipalities. 50% of the wastewater is treated in only 25 plants > 100,000 PE Half of the sewage derives from households and the other half from the industri 50% combined sewer systems and 50% separated sewer systems 7 PRB_Maastricht_31okt03.NR
  • 8. Odense Structure of water services in Denmark PRB Fyns Amt Natur- og Vandmiljøafdelingen Wastewater treatment – Effectiveness and prices Very effective wastewater treatment in the cities: 99% BOD-removal; 95% N- removal and 98% P-removal Connection fee: 4,000 EURO Variable fee: 2 EURO/m3 (average) Green tax on wastewater is paid by the owner of the treatment plant and depends on the degree of treatment 8 PRB_Maastricht_31okt03.NR
  • 9. Odense PRB Structure of water services in Denmark Fyns Amt Natur- og Vandmiljøafdelingen Costs Recovery In all: Price of water supply and wastewater paid by the consumer: 3.3-8.8 EURO/m3 (median: 5 EURO/m3) The water price is split into: 21% to the water supply 44% to the wastewater 35% to the danish state The services are based on the full cost recovery principle: Financial balance between the costs and the income over a period of time (few years) 9 PRB_Maastricht_31okt03.NR
  • 10. Odense PRB Fyns Amt Natur- og Vandmiljøafdelingen fee xx 10 PRB_Maastricht_31okt03.NR
  • 11. Odense PRB Fyns Amt Natur- og Vandmiljøafdelingen Water bill in Denmark compared with other contries 11 PRB_Maastricht_31okt03.NR
  • 12. Odense EU WFD - Test Areas PRB Fyns Amt Natur- og Vandmiljøafdelingen 12 PRB_Maastricht_31okt03.NR
  • 13. Odense Odense Pilot River Basin PRB Fyns Amt Natur- og Vandmiljøafdelingen Denmark, Europe Odense Fjord Natura 2000 L ke B a ryrup areas Odense City (180.000 inhab.) Ode nse Fiord Odense River Area: 1050 km2 250.000 inhabitants Power plant 13 PRB_Maastricht_31okt03.NR
  • 14. Odense ODENSE Pilot River Basin PRB Fyns Amt Natur- og Vandmiljøafdelingen Article 5 – Risk Analyses Odense Fjord Odense Fjord Water Main Pressures Pressures Reasons for not fulfilling objectives catchment bodies at risk Rivers 96% Physical Regulation of river and river valley’s due to land reclamation for agricultural purpose Waste Water outlets storm water, scattered settlements Lakes 86% Nutrient loads from agriculture Coastal waters 100% Nutrient Loads from agriculture Hazardous substances Groundwater 50% Nitrate load and Hazardous substances tables High abstraction 14 PRB_Maastricht_31okt03.NR
  • 15. Odense Programme of Measures PRB Fyns Amt Natur- og Vandmiljøafdelingen Conceptual Diagram Env. Objectives Env. Conditions Economy ok? - Cost effectiveness Max. acceptable - Disproportional? loading Households Physical Agriculture and Industri Conditions 15 PRB_Maastricht_31okt03.NR
  • 16. Integrated Programme of Odense PRB Fyns Amt Natur- og Vandmiljøafdelingen Measures Odense Fjord Odense River 80% retention Basin Ground water 50% retention Brahe Trolle Arreskov lake Søbo lake Nørre Søby Lange lake Dallund lake Fjellerup lake Slotslake lake 50% retention 50% retention Store Brænde- Sorte lake Nørre lake Øre lake gård lake 80% retention 80% retention 80% retention 80% retention Ground water Ground water Ground water Ground water 16 PRB_Maastricht_31okt03.NR
  • 17. Odense Odense Pilot River Basin PRB Fyns Amt Natur- og Vandmiljøafdelingen The most cost-effective Programme of Measures to achieve Good 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-morphological improvements (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 grassland 17 PRB_Maastricht_31okt03.NR
  • 18. Odense Economic Analyses PRB Fyns Amt Natur- og Vandmiljøafdelingen Expenses for Water Use in Odense River Basin mill. DKK/year (1 DKK = 0.13 EURO) Water Waste- VAT, Total Income/production % of Income/ value charge water taxes production value charge etc. Households 80 140 130 350 33,750 1.0 Industry and 54 158 6 218 80,050 0.3 services Agriculture 34 2 8 44 2,800 1.6 (APAE II) Total 168 300 144 612 116,600 0.5% (WFD-Article 5 ) WFD- WFD- (126) baseline WFD-PoM 94 Total 706 116,600 0.6% 18 PRB_Maastricht_31okt03.NR
  • 19. Prices and Costs recovery of the water Odense PRB Fyns Amt Natur- og Vandmiljøafdelingen services in Denmark Conclusions Denmark has a clear and consistent legal system for the provision of water services. Nearly all Danish drinking water derives from groundwater. Over the last 10 year-period, the household consumption of water has declined 26%. The amount of water use is about 128 litres/capita/day. The consumer normally receives one overall bill for drinking water, wastewater, green taxes and VAT. The median price of water supply and wastewater treatment paid by the consumer is about 5 EURO/m3. The water price paid by the consumer is split into 21% to the water supplies, 44% to the wastewater, and the Danish State receive about 35%. The services are based on the full cost recovery principle. Compared with other contries the total water bill in Denmark is rather expensive but the quality of the water services are also in top. In Odense River Basin the expenses for the current water services equals 0.5% of the total income and production value in the basin The Odense Pilot River Basin project shows, that implementing the WFD in the basin will increase the expenses for water services to 0.6% of the total income/production value in the basin. 19 PRB_Maastricht_31okt03.NR
  • 20. Odense Hydronomic Convention 2006. 13th-14th November 2006, Barcelona PRB Fyns Amt Natur- og Vandmiljøafdelingen Prices and Costs recovery of the water services in Denmark Thank you for your attention… PRB_Maastricht_31okt03.NR