WATER GLOBAL PRACTICE Water in Circular Economy and Resilience (WICER) The Case of Chennai, India Recovering Water and Energy from Wastewater This case study is part of a series prepared by the World Y Bank’s Water Global Practice to highlight existing PPL SU experiences in the water sector. The purpose of the US E series is to showcase one or more of the elements that WATER RECOVERY can contribute toward a Water in Circular Economy and RE R • Industrial reuse VE ST CO Resilience (WICER) system. This case study focuses on OR • Indirect potable reuse RE E the experience of Chennai in India. ENERGY RECOVERY RESTORE LAKES Context [GDP]), ranking it as India’s fourth- to sixth-most-­ productive metropolitan area. Because of urbaniza- Chennai, a city on the southeastern coast of India and tion and economic growth, Chennai’s population has the state capital of Tamil Nadu, has one of the world’s increased more than 50 percent over the past two fastest-growing economies. Chennai is the automo- decades. With over 10 million people and covering tive hub for India and is also home to several other more than 426 square kilometers (km2), Chennai is the industries ranging from petrochemicals to hardware fourth-largest city in India. manufacturing, textiles, and apparel. Besides indus- tries, Chennai’s economic activities include medical The city’s rapid growth has created several water tourism, software, and financial services. Recent esti- challenges: mates of the economy of the Chennai Metropolitan Area have ranged from US$79 million to US$86 ­ billion • Water supply has not kept up with demand. Chennai (purchasing power parity [PPP] gross domestic product has historically relied on groundwater, which has 1 provided between 100 and 120 millions of liters of Solution: Chennai’s efforts to become circular water per day (MLD) (CMDA n.d.) and four rain- and resilient fed lakes nearby with a combined storage capacity To protect against the vagaries of nature, build resil- of about 11,000 million cubic feet (mcft) and the ience, and increase water availability, the Chennai potential to supply between 632 and 854 MLD of Metropolitan Water Supply and Sewerage Board water, depending on the monsoons. Meanwhile, (CMWSSB) embarked on several projects and invest- however, Chennai’s demand for water has increased ments to diversify water supply. Chennai was the first more than 50 percent (up to 1,200 MLD) over the city in India to mandate rainwater harvesting and the past decade. Industrial development, an increasing first to achieve 10 percent wastewater reuse. It is also population, and larger per capita needs triggered by the only utility in India with two large-scale desalina- economic growth all play a role in rising demand for tion plants. Its current water supply is already diverse water. The per capita availability of water dropped when compared with other cities in India and around from 1,816 cubic meters (m3) in 2001 to 1,545 m3 in the world, as shown in figure 1, below. CMWSSB is 2020. Because of a gap between water demand and also recovering energy from wastewater in more than the combined water supply from all sources, many half of its wastewater treatment plants (WWTPs) and households must supplement the city’s supply with exploring to sell most of the biosolids generated as their own borewells and/or tanker deliveries to meet manure for application to agricultural land. To boost their water needs. the city’s resilience and push Chennai toward circular • Extreme weather events further aggravate the issue. economy principles, CMWSSB plans to increase the percentage of wastewater being reused, restore aqui- Since the city is entirely dependent on rains for fers and lakes, improve rainwater drainage and flood recharging its water resources, monsoon failures management, and decrease nonrevenue water. lead to acute water scarcity. The city usually gets 1,200 millimeters (mm) of rain between mid-October This case study focuses on CMWSSB’s experience and mid-December that help replenish surface and in reusing, and recovering energy from, wastewa- groundwater sources. Yet over multiyear cycles, ter. The wastewater reuse initiative started in 2005 Chennai is regularly afflicted by severe floods and when industries expressed interest in purchasing droughts. In the past two decades, the city has treated wastewater from CMWSSB and secondary-­ seen floods in 2005, 2010, and 2015, bookended by droughts in 2003–04 and 2016–18. FIGURE 1. Chennai Water Supply Sources • The city’s unplanned expansion has caused water bod- ies in and around the city to contract, from 12.6 km2 in 1893 to 3.2 km2 in 2017. These water bodies have 16% Desalination been important to Chennai, providing water during 10% Recycled Wastewater drought periods and acting as a buffer during heavy rains. • The growing population and failing monsoons have 65% Reservoirs required Chennai to transport water from distant sources1 and to desalinate seawater,2 increasing the 9% Ground Water cost of water supply. Source: CMWSSB, 2020. 2 Water in Circular Economy and Resilience (WICER) further processing it for use in their facilities. Three operating the needed infrastructure with industries petrochemical industries led this effort, purchas- and with utilities/cities; and, finally, a stipulation that ing and processing 30 MLD of secondary-treated capital be financed through national/state government wastewater to meet their industrial-water needs. In programs or, preferably, through public private part- 2015, learning from this effort, CMWSSB established nerships (PPPs). two tertiary treatment and reverse osmosis plants, At the city level, Chennai promotes circular econ- with 45 MLD capacity each, and began to supply omy principles. CMWSSB has taken a number of high-quality, treated wastewater to industries in and steps to close the water loop and make the most of all around Chennai. Together these plants supply 120 available water resources in Chennai, including non- MLD of treated wastewater for nonpotable industrial traditional water sources such as wastewater. Chennai uses. Meanwhile, the fresh water previously going to is the first Indian metropolitan area to achieve almost industries has been freed to meet the city’s domestic 100 percent wastewater collection. With a sewer net- potable water needs. CMWSSB is now piloting indirect work extending over 3,000 km and twelve waste- potable reuse with the construction of two plants of 10 water treatment plants with a combined capacity MLD capacity. If the pilot succeeds, the plan is to scale of 727 MLD, Chennai collects, transports, and treats up to 240 MLD. Moreover, CMWSSB has installed, and between 520 and 660 million liters of wastewater pro- is operating, energy-recovery systems in seven of its duced daily by 4.8 million residents in the city core twelve WWTPs to reduce the energy dependence on (95 percent coverage). CMWSSB has also launched grid power and to improve the financial sustainability several bylaws to increase incentives for wastewater of its wastewater treatment operations. recycling and reuse. All stakeholders—including gov- ­ itizens— ernment authorities, the private sector, and c  olicy, Institutional, and Regulatory P are mandated by those regulations and bylaws to Environments ensure the maximum reuse of water. For example, At the national level, the National Urban Sanitation CMWSSB has increased the freshwater tariff for indus- Policy (NUSP) of 2008 promotes the use of reclaimed tries and implemented a zero-discharge policy making water, recommending the reuse of a minimum of it mandatory for industries and manufacturers to 20 percent of wastewater produced in every city. The achieve zero-liquid discharge in their operations. The National Water Policy (2012) also recognizes the impor- purpose of these initiatives is to encourage the indus- tance of wastewater reuse to meet national environ- trial sector to reuse its process water and reduce its mental objectives and mentions the possible use of a overall water use. preferential tariff to incentivize the use of reclaimed water over fresh water. Wastewater Reuse At the state level, the government of Tamil Nadu pro- First Attempt at Reuse by Industries motes wastewater reuse and has created a mandate Severe water shortages in 2001 caused the Chennai that industries be supplied only with treated waste- Petroleum Corporation Ltd. (CPCL)—a 10 million met- water for their processes. Notable features of the ric tons per annum refinery—to shutter operations for policy are, first, identifying current and future indus- 35 days, with consequent financial impacts. Between trial water demand in the state; second, establishing 2001 and 2004, the company relied on about 500 water a 10-year horizon for supplying all industries with tankers per day for its operations. Faced with frequent treated wastewater; third, directing the state indus- monsoon failures, CPCL, in 2005, decided to purchase tries department to take the lead in developing and secondary-treated wastewater from CMWSSB and Water in Circular Economy and Resilience (WICER) 3 further treat it (tertiary treatment followed by reverse internal rate of return is 9 percent. In the agreement, osmosis) to the desired quality levels for its operations. CMWSSB covered the costs of the pipes to convey the It purchases and processes 24 MLD of wastewater, suf- wastewater to CPCL, and later to MFL and MPL. ficient to meet its total process water needs. Taking CMWSSB entered into an agreement with the three a cue from CPCL, Madras Fertilizer Ltd. (MFL) and industries for the supply of secondary-treated waste- Manali Petrochemicals Ltd. (MPL) each built a tertiary water. The price of secondary-treated wastewater treatment plant for reuse, purchasing 10.50 MLD is Rs 20.25/kl with an annual increase in price of and 1.50 MLD of treated wastewater from CMWSSB, 1.5 percent. CMWSSB is responsible for the operation respectively. and delivery of secondary-treated wastewater to the industries, and the industries are responsible for estab- Financial and Contractual Arrangements lishing and operating the tertiary treatment plants. In this case, the end user of the treated wastewater This agreement has held for the past fifteen years, a has financed and operates the tertiary treatment plant. testament to the efficacy of the project. See a sche- CPCL incurred a capital expenditure of Rs 760 million matic of the process, below, in figure 2. to establish the tertiary treatment plant in its facility. The annual operation and maintenance (O&M) costs are Rs 378 million, including the purchase cost for CMWSSB’s Recycle and Reuse Efforts wastewater from CMWSSB at Rs 20.25/kiloliter (kl) With the increasing number of industries in and around (CMWSSB 2020). As a result of this effort, CPCL saves 3 Chennai, CMWSSB had to find ways and means to bal- Rs 126 million annually—the cost differential between ance the demand for water from industries alongside the the industrial water tariff paid previously at Rs 60/kl growing needs for potable water for household needs. (tariff in 2005) and the treated wastewater at Rs 45/kl Learning from its experience with recycling and reus- (Rs 20.25/kl plus the O&M costs of the tertiary treatment ing wastewater for industrial users, CMWSSB decided plant). The project payback period is 6.4 years, and the in 2015 to establish two tertiary treatment and reverse FIGURE 2. Industry use of Secondary-Treated Wastewater Wastewater Treatment Plant Tertiary Treatment City’s Wastewater Rs. 20.25/Kl CMWSSB Long-Term Purchase CHENNAI Agreement Industrial User Note: CMWSSB = Chennai Metropolitan Water Supply and Sewerage Board. 4 Water in Circular Economy and Resilience (WICER) osmosis plants of 45 MLD capacity each at two of the scheme of the government of India. The treated existing wastewater treatment plants (photo 1). The goal water is sold to industries at Rs 130/kl and, account- was to use these to further process secondary-treated ing for O&M costs, the yearly revenues amount to wastewater, then supply the treated wastewater to Rs 2.7 billion. Revenue from the sale of treated waste- industries instead of fresh water. The implementation water pays for the O&M costs of the treatment systems of this initiative is also in line with and supported by the and the operators. treated wastewater policy of the government of Tamil The project was structured as a PPP with 30 percent Nadu, as described above. Besides following the policy equity, 70 percent debt (at an interest rate of 14 percent, mandate, the reuse of treated wastewater for the indus- the commercial finance lending rate), O&M costs of trial sector is an opportunity for CMWSSB to increase Rs 36/kl (increasing by 3 percent per year), and the sale the supply of potable water available for domestic uses. price of treated wastewater at Rs 130/kl (increasing by Further, the use of treated wastewater ensures a con- 1.5 percent per year). The calculated payback period is tinued and uninterrupted water supply to industries, 4.9 years and the internal rate of return is 17 percent. which are crucial to the city’s economy. A schematic of the process is detailed in figure 3. Financial and Contractual Arrangements The Tamil Nadu Sustainable Urban Development Energy Recovery from Wastewater Sludge Project of the World Bank supported the CMWSSB in In order to reduce the energy drawn from the grid designing and financing one of the tertiary and reverse and to meet the operating needs of WWTPs, CMWSSB osmosis treatment plants and also in developing the embarked on a program in 2005 to anaerobically digest contract documents adopted in the subsequent project. sludge from its WWTPs and use the biogas, a byprod- A design, build, and operate (DBO) contract was signed uct of anaerobic digestion, in gas engines to generate between the CMWSSB and Wabag-IDE consortium electricity. Seven of the twelve WWTPs have installed and BGR Energy systems for a period of 15 years and energy recovery plants with a total installed capacity included the construction of the tertiary treatment of 7 megawatts (MW). and reverse osmosis plants and the pipelines to convey and distribute the treated wastewater to industries. The cost of retrofitting the seven plants to be able to general electricity was about Rs 174 million. These ­ The capital costs of the two tertiary treatment and plants generated 144,529,270 kilowatt-hours (kWh) reverse osmosis plants, in addition to the transmission of electricity since the time of commissioning until and distribution system, was Rs 6.32 billion; the oper- April 2020 and resulted in energy savings of Rs ating costs are Rs 972 million/year (at Rs 36/kl, con- 680  million (less energy drawn from grid). Financial sidering 300 days’ operation). The O&M cost includes analysis indicates an internal rate of return of 35 percent the cost of operating the tertiary treatment and and a payback period of 2.8 years. Further, the energy reverse osmosis plants, transmission and distribution recovered in the seven plants meets 50 percent of the of the treated wastewater, and the operator’s cost. energy needs of all the WWTPs. CMWSSB is trying to Regarding the capital costs, one plant was financed step up its game in sewerage and wastewater treat- under the World Bank’s Tamil Nadu Sustainable Urban ment by ensuring energy recovery systems in most Development Project, as mentioned above, and the WWTPs, and is now exploring solar energy to reduce other under the Atal Mission for Rejuvenation and energy dependence on the grid and make operations Urban Transformation (AMRUT), a centrally sponsored more financially sustainable. Water in Circular Economy and Resilience (WICER) 5 FIGURE 3. Industry use of Tertiary-Treated Wastewater Wastewater Treatment Plant New Tertiary Treatment Plant (secondary treatment) + RO Plant City’s Wastewater Treated wastewater CMWSSB Rs. 130/Kl CHENNAI Industrial Users Notes: CMWSSB = Chennai Metropolitan Water Supply and Sewerage Board; RO = reverse osmosis. PHOTO 1. Tertiary Treatment Plant at Kodungaiyur Source: CMWSSB. 6 Water in Circular Economy and Resilience (WICER) Benefits Reduction of greenhouse gas emissions. The use of biogas to produce electricity reduces the emissions Lower operating costs and decreased risks of water of greenhouse gases and decreases CMWSSB’s depen- scarcity for industrial users. The establishment and dency on electricity from the city grid. operation of the wastewater reuse plants have insu- lated industries from the uncertainties of water supply and ensured the availability of water now and into the Closing the Loop foreseeable future, making industries more resilient to CMWSSB’s Future Plans for Indirect droughts. The reuse of treated wastewater by the three Potable Reuse big industries (CPCL, MFL, and MPL) has resulted in Having maximized the supply of treated wastewa- annual savings of Rs 164 million. ter to industries and learning from the experience of Increased sustainability of CMWSSB. The sale of the Indian Institute of Technology (IIT), a university treated wastewater is providing additional revenue to in the city that has been operating an indirect pota- CMWSSB, thus improving its financial sustainability ble reuse plant for a number of years to meet its own as it continues to provide sanitation services to the water needs, CMWSSB decided to pilot two plants residents of Chennai. The revenues from the sale of for indirect potable reuse, each of 10 MLD capacity, secondary-treated wastewater to CPCL, MFL, and MPL scaling up afterwards to 240 MLD to meet growing add up to Rs 222 million annually. Additional revenue water demand. from the sale of wastewater treated at tertiary treat- The advantages of the proposed process are as follows: ment plants is enough to cover O&M costs, and the yearly revenues of this amount to Rs 2.7 billion. • Critical infrastructure (network and wastewater treatment plants) are available and operational. More sustainable use of existing water resources. Approximately 30 MLD of reclaimed wastewater • Required secondary treated wastewater is available. are sold to the industrial users, CPCL, MFL, and MPL. Together with the tertiary treatment, a total of • Financial (capital and operating costs) are an attrac- tive option to increase water availability when com- 120 MLD of treated wastewater will be used for indus- pared to other options (see table 1). trial purposes. This means that the use of an equiva- lent amount of fresh water is being avoided, indirectly • Lakes have the capacity to take in tertiary-treated augmenting available fresh water to meet the city’s water, which is expected to be about 10 percent of increasing water needs. the lake capacity. TABLE 1. Cost Comparison of Different Water Sources Capital cost Operating cost S. No. Source (Rs millions/MLD) (Rs/kl) 1. Desalination 153 55 2. Tertiary treatment + reverse osmosis (supply of treated wastewater to 40 36 industries) 3. Tertiary treatment + ultrafiltration + water treatment plant 35 18 4. Distance surface-water source (~250 km from the city) 77 23 Source: CMWSSB 2019. Water in Circular Economy and Resilience (WICER) 7 • Land for construction of tertiary treatment plants CMWWSB’s attempts to recycle and reuse wastewa- at existing WWTPs and water treatment plants near ter for industrial purposes will free up to 120 MLD of the lakes/distribution head works is also available. fresh water. Together with the planned indirect pota- ble reuse plants of 260 MLD capacity, CMWSSB will The proposed scheme envisages: be able to augment its supply capacity by 380 MLD, • Tertiary treatment and ultrafiltration diversifying its water sources and contributing toward building the resilience of the city’s water supply. The • Conveyance of treated wastewater to the lakes indirect potable reuse project is expected to be com- • Water treatment of blended lake and tertiary-treated pleted by 2024. wastewater Moreover, it should be noted that CMWSSB also reuses • Aquifer recharge during periods when the lake is full a small percentage of treated wastewater for other • Distribution of treated water urban purposes. About 0.3 MLD of treated wastewa- ter are provided for free to the city to be used to water CMWSSB consulted with many stakeholders (residents, plants and lawns at public parks and traffic islands. industries, commercial associations, and educational 0.5 MLD of treated wastewater are supplied to the institutions) to explain the proposed scheme and Chennai Metro Rail Ltd at a rate of Rs 18.40/Kl and responded to stakeholder queries on water quality another 0.5 MLD of treated wastewater are supplied to and cost. The stakeholders welcomed the proposed the Road Development Corporation for free. scheme, and several industrial and commercial estab- Other Circular Economy Activities lishments evinced interest in the purchase and use of Besides reusing treated wastewater for several pur- the water. poses and recovering energy in wastewater treatment A schematic of indirect potable reuse is shown, below, plants, CMWSSB is also exploring other circular econ- in figure 4. omy activities. CMWSSB produces around 50kg of FIGURE 4. Indirect Potable Reuse Wastewater Treatment Plant Advanced Puri cation (secondary treatment) Facility CHENNAI City’s Wastewater Treated wastewater Driking Water Treatment Plant Lakes 8 Water in Circular Economy and Resilience (WICER) dried sludge per ML of treated wastewater and is plan- more and more important roles in building urban water ning to sell the dried sludge to farmers for use as soil resilience and should be incorporated in planning and conditioner at Rs 71.50 per Ton. The use of biosolids in the water balance. as soil conditioner reduces the amount of sludge to be Treated wastewater tariffs are best set at competitive transported and landfilled, saving the related costs, levels. Besides reliable and constant water quality, a which can be significant. Further, the agricultural competitive tariff is needed to ensure that industrial application of biosolids benefits farmers too, since it consumers consider the use of reclaimed wastewater increases moisture retention and reduces synthetic instead of fresh water. fertilizer use. CMWSSB is also exploring options to recycle the brine produced in the desalination plants. The right contract design can incentivize energy recovery in treatment plants. Including provisions in the O&M contracts that penalize the operator by charging it a Lessons Learned higher tariff whenever power is drawn from the grid to Government support and regulations that foster waste- operate the WWTPs (where energy recovery systems water reuse are crucial for success. The fact that there are available) incentivizes operators to maximize the were national, state-level, and local regulations and efficiency of energy recovery systems. policies that incentivized or mandated wastewater Piloting a small-scale project first, with one or two end reuse was a catalyst for this type of project’s success in users, can serve as a proof of concept. The success of the Chennai. The higher water tariffs for industries and the first pilot led by the industrial user (CPCL) fostered the zero-discharge policy also forced industries to explore implementation of more wastewater reuse projects. other options and consider alternative sources such as treated wastewater. Conclusions Water scarcity encourages water reuse. Besides ade- This case study shows how CMWSSB’s efforts to recy- quate government support and regulations, this case cle and reuse between 60 and 75 percent of the city’s study shows that water scarcity also triggers the wastewater for industrial and indirect potable reuse exploration of more innovative solutions that con- will result in 380 MLD of water becoming available sider nonconventional water sources. It also shows for domestic consumption at very economical costs. that wastewater reuse is economically viable in water- Further, the city’s efforts to reuse treated wastewater scarce areas, especially where the cost of tapping the and diversify water supply builds resilience, improves nearest freshwater source is high. water security, and helps protect city residents from Proactive planning and innovative thinking are import- the vagaries of climate change. Besides, revenue from ant for building urban water resilience. Rapid urban- the sale of treated wastewater and reduced grid power ization, increasing populations, and rapid economic to operate WWTPs on account of the energy recovery development exacerbate water scarcity. Cities should system helps CMWSSB meet 90 percent of the O&M adopt proactive planning mechanisms to project cost of sewerage systems, proving that circular econ- economic growth, urbanization patterns, and water omy initiatives are not only sustainable, but make eco- demand. Nonconventional water resources will play nomic and financial sense. Water in Circular Economy and Resilience (WICER) 9 IWMI and WSP (Water and Sanitation Program). 2016. Recycling and Notes Reuse of Treated Wastewater in Urban India: A Proposed Advisory and 1. The Veeranam Canal brings 180 MLD of water from the Cauvery Guidance Document. Resource Recovery and Reuse Series 8. Colombo: River. International Water Management Institute. 2. Desalination efforts add up to 800 MLD: two plants in operation, with IWA. 2018. Wastewater Report 2018: The Reuse Opportunity. London: a capacity of 100 MLD each; a plant of 150 MLD capacity under con- International Water Association. struction; and a detailed project report for a plant of 450 MLD capac- ity under preparation. Kelkar, U. G. 2012a. “Wastewater recycle and reuse—technology evolu- tion and costs.” Presentation at “Wastewater Recycle and Reuse: The 3. See https://www.cpcl.co.in/Refineries. Need of the Hour,” a workshop organized by the Ministry of Urban Development, Government of India at New Delhi, April 18 (accessed November 28, 2013). http://mohua.gov.in/upload/uploadfiles/files​ Background Documents and References /Wastewater_Reuse_Tech_Evolution_Costs014.pdf. CMDA (Chennai Metropolitan Development Authority). N.d. Kelkar, U. G. 2012b. “Wastewater recycle and reuse—Indian experience.” “Infrastructure.” In Second Master Plan, vol. III, 157–81. Chennai: CMDA. Presentation made at the “Wastewater Recycle and Reuse: The Need of http://www.cmdachennai.gov.in/Volume3_English_PDF/Vol3_Chapter07​ the Hour” workshop organized by the Ministry of Urban Development, _Infrasructure.pdf. Government of India at New Delhi on April 18. http://mohua.gov.in​ /upload/uploadfiles/files/Wastewater_Reuse_India_Exp013.pdf. CMWSSB (Chennai Metropolitan Water Supply and Sewerage Board). 2019. “Recycle and reuse of treated wastewater for recharging urbanized PUB. 2018. Our Water, Our Future. Singapore: Public Utilities Board. lakes,” presentation to World Bank. World Bank. 2016. “Approaches to capital financing and cost recovery CMWSSB. 2020. “Experience in wastewater reuse,” presentation to in sewerage schemes implemented in India: Lessons learned and World Bank. approaches for future schemes.” Water and Sanitation Program Guidance Note, World Bank, Washington, DC. CPCL (Chennai Petroleum Corporation Ltd.). 2015. “Water management at CPCL.” Presentation, February 18–20. http://cdn.cseindia.org/userfiles​ WSP. 2014. “Cost of wastewater treatment recovery in sewerage and /CPCL-water-management-Dr.M.pdf. wastewater treatment.” Water and Sanitation Program, New Delhi. 10