Whilst it is generally accepted that improvements in water management are required worldwide, the relatively low apparent financial cost of water is inhibiting the essential changes. Motivating factors are necessary to enable the transformation and whilst standards such as ISO14046 Water Footprint and even ISO50001 Energy Management provide a framework to allow companies fulfil their corporate and social responsibilities, the cost savings associated with the necessary modifications do not alone provide adequate justification. The reason for this is that the true cost or true value of the water being used is not known.
The background to the water predicament along with an outline of the water–energy nexus is articulated in this paper. Details of significant, predominantly industrial, water management studies undertaken in different parts of the world are outlined. A common trend is identified, whereby the true cost of the water is rarely determined and hence unappreciated.
In order to remedy this situation within industry, a novel framework for establishing the true cost of water by analysing the value added has been developed and its application to a typical manufacturing factory is described in this paper. The framework may also be similarly applied to other water life-cycle stages.
The true cost provides a valuable insight into the operation of the facility, a means for internal and external benchmarking and internal cost control, and also the data necessary to financially justify any modifications required. The data may also be used to assist with the calculation of a water footprint or a life-cycle cost.
If the proposed methodology is implemented, changes will be possible which will result in water, energy and cost savings along with environmental benefits. Employment of this methodology, involving a Value System (VS) and a simulation model, would facilitate the application of Information and communications technology (ICT) to resource efficiency and thus may be used to assist in confronting necessary sustainability challenges.