Nature-Based Solutions for Water Management

Challenges

Faced with pressure to effectively service a growing population and address significant sediment and nutrient pollution, QUU capitalized on an opportunity to explore a new approach to catchment management. The utility’s Beaudesert Sewage Treatment Plant was in need of an upgrade to mitigate elevated levels of nitrogen load discharged to the Logan River due to decreased recycled water demand during wetter than average years. Natural channel erosion taking place on the Logan River during these wetter years was also contributing to significant sediment and nutrient pollution into the Logan River. The standard utility approach in these circumstances would involve advanced capital works and investment in expensive sewerage treatment plant upgrades, in this case an AUD $8 million upgrade to construct a sequential batch reactor (SBR) for nitrogen removal (WSAA, 2017). These upgrades, along with other hard engineering options to reduce pollution, have very long asset lifetimes, little flexibility and the costs are borne by utility customers. In Australia, most sewage treatment plants are individually regulated by State Government environmental protection agencies. With population projections, the risk of keeping plants and individual operating licenses compliant increases over time. QUU cites investments of around $AUD 500 million to upgrade their fleet of sewage treatment plants to biological nutrient removal processes over the past 20 years. Regulatory drivers or incentives for pursuing alternative investment options like NBS were non-existent until recently. 

Actions and Impacts 

In 2013, QUU initiated conversations with their regulator, Queensland Department of Environment and Heritage Protection (DEHP) around a voluntary market-based mechanism for nutrient management in degraded river catchments. Rather than investing in costly treatment plants, they proposed that a green infrastructure solution could significantly reduce streambank erosion, thereby reducing sediment and nutrient loads to the river. QUU would utilise the nutrient pollution credits generated by the project to offset nutrient emissions from the sewage treatment plant and ensure licence compliance (WSAA, 2017).

A crucial exercise to making the business case for NBS involved quantifying the annual loads of sediment, nitrogen and phosphorus that were mobilized into the waterway during wet weather events. Streambank restoration projects generally focus on less impactful metrics for water quality, like how many trees are planted or length of streambank restored, and fail to recognize the real downstream environmental impacts from sediment and nutrient pollution. The modelled nutrient and sediment loads (Bank Stability and Toe Erosion Model [BSTEM]) mobilized were so high that people could finally recognise the severity of the issue and understand why the rivers were appearing so dirty.

QUU’s proposed approach involved restoring around 500 metres of severely eroded streambank by changing the angle of the riverbank at the escarpment, installing a wooden pilefield, placing rock barriers at the toe of the bank and planting about 7,000 trees, shrubs and hedges to improve riverbank’s stability (IWA/TNC, 2018).

Feasibility studies indicated it was actually more cost effective to adopt an NBS approach over the conventional option of building or upgrading the sewage treatment plant. Less tangible benefits include increased biodiversity outcomes such as a new wildlife corridor, lower chemical usage and GHG emissions and environmentally resilient agricultural and alluvial plains. The resulting voluntary nutrient offset pilot project prevented more than 11,000 tonnes of sediments from entering the river each year due to natural erosion. This equates to an aversion of 5,000kg of nitrogen and 8,000kg of phosphorus loads into the river each year. QUU was able to save $AUD 7 million in capital costs; and $AUD 1 million per year in operational costs compared to the recommended sewage treatment plant upgrade option, while maintaining compliance with nutrient discharge limits at the Beaudesert Treatment Plant.

With limited knowledge and experience with regulated point source related NBS projects, QUU relied on their positive relationship with environmental regulatory agencies to convince them to adopt a risk sharing approach to pilot this beta project. Initial discussions with the regulator focused on the macro issues, such as the relatively small nitrogen load contribution the sewage treatment plant made to the Logan River nitrogen budget, the high level of investment required to comply with licence conditions and the resulting high costs to customers. The idea was to design and deliver a project that could be used as a living laboratory, then perform quarterly monitoring on performance to evaluate the long-term sustainability of NBS.

The pilot project performed extremely well by withstanding a number of flood events over the initial five years of NBS operation, giving regulators the confidence to create a State policy for point source nutrient offsetting. Transitioning from a voluntary mechanism to a State policy (due for public release before July 2019) will allow for more aggressive implementation of NBS in South-east Queensland and the Great Barrier Reef in Central and North Queensland. This engagement with regulatory agencies on the topic of NBS seems relatively smooth and effective compared to the typical experience of water utilities around the world. QUU admits that a change to a proactive mind-set, leadership and strong personal ties with their regulator helped, yet finalizing an accurate and reputable scientific case was challenging. Environmental regulators prefer cautionary approaches and want to see a strong scientific foundation. In early conversations, QUU admits they adopted somewhat of a “transformational” attitude, which has persisted due to its effectiveness but is now evolving into early stage partnerships on certain issues. “We have a lot of upfront discussions on these issues and work through the challenges before we get into detail on concepts, so that we have everyone in the room and on the same page” explains Paul Belz, Executive Director at QUU. It’s necessary to strike this relationship and ensure that the regulator is aligned on outcomes. If regulators are not keen to innovate or adopt smart regulations, it will always be a struggle. Fortunately, the Queensland Department of Environment and Heritage Protection (DEHP) were receptive, creating an environment for QUU to test and evolve their pilot project. There are still some barriers on the science side, specifically in terms of understanding nutrient equivalency and how to link diffuse source nitrogen abatement projects to point source nitrogen emissions. QUU is spearheading R&D projects in this space to build scientific evidence and increase certainty around these trading ratios, with the aim of making future approvals easier.

Securing regulatory approval and participation involved changing the way the QUU operated with regulators. “We had to change our perspective of the regulator as an enforcer to that of a partner, and an integral part of our business” says Paul Belz. The relationship between utilities and regulators is often adversarial, accompanied by a lack of trust and no risk sharing. A crucial factor in building the utility-regulator relationship needed to support NBS was inviting members of regulatory departments and state government stakeholders to participate in on-site workshops, so they could witness first-hand the deterioration of streambanks, discuss erosion issues with the land owners and see upstream catchment areas. “Every time we speak about the project, the key part is including the state government department as one of the project partners. When the project receives award nominations, the regulator has been there as part of the team. I think they rightfully and truly feel part of the outcome” adds Cameron Jackson, Leader Water Quality and Environmental Planning at QUU.

Stakeholder engagement in the pilot project has been beneficial to spreading awareness about the importance and benefits of alternative approaches like NBS to protect water quality, land and enhance biodiversity. Landowners along the Logan River had a direct stake in project outcomes; they were losing significant tracts of property with banks eroding at a rate of up to 1 meter per year in some locations. Generating local interest and support for measures to reduce erosion was easy, even in light of the fact that landowners would have to cede 10-15 meters of riparian land to the project. QUU also partnered with local natural resource management organizations to deliver the project and undertake landholder and community engagement. These organizations offered strong relationships with landowners, valuable insights on siting for pilot projects, and were able to secure project approvals for working in waterways and flood zones in a timelier manner than the utility itself.

This successful case study on NBS can, at its root, be attributed to an attractive business case. The utility was able to illustrate upfront savings of $7 million in capital costs and lower annual operational costs, resulting in savings of $5 million over the lifespan of the 10-year nutrient offset period. The offset project also provided a flexible 10 year planning window to better understand actual population growth in the regional city of Beaudesert, complete more thorough sewerage master planning, and improve scientific knowledge on NBS. While the financials were impressive, it’s clear that the success of this project cannot be attributed solely to financial numbers. QUU’s commitment to aligning operational efficiency with environmental sustainability and collective action approach to solving water quality problems is a powerful reminder that a utility’s role is much more than just a provider. The Beaudesert Sewage Treatment Plant pilot project has chartered a path for numerous new projects in Queensland focused on partnering with innovative regulators and local natural resource managers to deliver offsite nutrient reduction projects that achieve better water quality and biodiversity outcomes, while delivering cost savings to water utilities and their customers. 

QUU (2018). Queensland Urban Utilities. Who we are  

WSAA (2017). Water Services Association of Australia. Case study 6 Using nutrients offset to improve the Logan River. Queensland Urban Utilities