Drupps launches new water pricing model

Drupps has launched the Drupps Water Pricing Model to help highlight water’s true value, or, the value water helps create. In the face of looming water shortages, what is a sound investment level to protect one’s water supply?

We often feel frustrated when we are talking to would-be customers and are faced with this question: ‘Tap water is cheaper than your water and it requires no major investment. Why should we invest in your technology?’

Well, the answer is obvious. There is a major probablility going forward that tap water may not be there in sufficient quantities due to water shortages, due to climate change. What Drupps is offering is therefore more like a water risk mitigation tool, to manage water supply.

Water value from a risk perspective

When we lok at water from a risk perspective, its value becomes clearer. Water's true value is the value it helps create, or the value one stands to lose if water is not there. To a producer, water shortage may result in temporary operation shutdown and loss of output, revenue, and profits. Any manager would want to avoid such a scenario.

To help putting a correct value on water, we have developed a Water Pricing Model. The Model includes two parts. First, it takes into account a certain industry sector's ability to turn it into value.

The second part takes macro data into account, estimating the probability of water shortages within a five-year timeframe in that geographical region. The second part relies on official data, the first part on compiled data from industry sectors.

Typically, the Model may find that the water value for a certain industry sector is much higher than the price you pay at the tap. That's because grid water is typically priced at its production cost plus a pre-set premium. Very seldom, grid water is priced from a supply/demand perspective.

The purpose of our Water Pricing Model is shift people’s minds about water value and to incentivize investments in water efficiency. Being located in a region at risk of water shortages due to drought, flooding or infrastructure failure, you may want to look at all options available to safeguard your water supply going forward.