Hunter Water: a defensible basis for non-residential wastewater growth

Hunter Water engaged Informed Decisions to independently assess the growth assumptions underpinning its long-term forecast of non-residential wastewater demand for the Burwood Beach Wastewater Treatment Works, which services the Newcastle urban area. The assessment validated the forecast growth rate and provided Hunter Water with a documented, defensible basis for future capacity decisions.

“The updated model and report are spot on. This work provides a much needed independent check of our forecasts.” – Hunter Water

Hunter Water’s forecast applied a growth rate derived from recent trade waste records. While non-residential wastewater accounts for a relatively small share of total demand, its future growth remained uncertain.

Depending on the historical period used, the same records pointed to a very wide range of future outcomes, largely reflecting the disruption and subsequent recovery associated with COVID-19. Hunter Water needed an independent view of which rate it could rely on.

The growth rate underpins long-term capacity planning and investment decisions at the treatment works. Because growth compounds over several decades, even a small difference in the annual rate can materially change how much capacity is needed and when.

Hunter Water also needed to understand whether population growth was a reliable indicator of future non-residential demand, given that many people working in Newcastle commute from outside the city. As Newcastle continues to grow as an employment centre, demand could increase faster than its resident population.

The study built on population and dwelling growth scenarios we had previously prepared for the catchment. Working closely with Hunter Water, we assessed the growth rate using five lines of evidence:

• historical wastewater demand
• employment growth, as a key driver of demand
• the catchment’s available workforce
• planned development across key employment precincts
• a bottom-up industry model integrating these inputs.

Hunter Water received a technical report, a key findings presentation and an Excel model that enables its team to test alternative scenarios and update assumptions as new data becomes available.

Employment in the catchment has grown faster than the resident population, but wastewater demand per job has declined over time. Accounting for both trends, the integrated model arrived at a result very close to Hunter Water’s own forecast. Because the two forecasts were developed independently, using different data and assumptions, their close alignment provided confidence in retaining the current growth rate within a defensible planning range.

The analysis also identified when and where future demand is likely to occur. Growth is projected to be strongest in the near term and to ease over time, so applying a constant growth rate could underestimate capacity needs in the earlier years and overestimate them later. Most growth associated with planned development is concentrated in a small number of areas, highlighting where local wastewater demand may differ from the catchment-wide average.

The work gave Hunter Water independent evidence to support its long-term investment planning.

“The work has been recognised internally as a step change improvement and is being used as a template for others. The reports stood on their own. It was also one of the few engagements where I was confident bringing my managers in, because there was very little chance of it going sideways.” – Hunter Water

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