Benchmarking energy efficiency in water utilities: Evidence from England and Wales

• Energy efficiency of drinking water services was estimated using efficiency analysis trees. • Optimal use of energy according to the size of water utilities was estimated. • Factors influencing energy efficiency of water utilities were identified. Production and distribution of drinking water is an energy intensive process. Understanding the energy efficiency of drinking water services and what drives efficiency could improve sustainability of water cycle. In this study, we use the Efficiency Analysis Trees (EAT) method to benchmark the energy efficiency of several water utilities in England and Wales based on their energy consumption. Unlike traditional parametric and non-parametric methods previously used to assess the performance of water utilities, EAT does not suffer from overfitting. We further employ bootstrap truncated regression techniques to understand what drives energy performance. The results showed that the average energy efficiency of the English and Welsh water industry during the 2011–2020 period was 0.767. This means that energy consumption could be reduced by 23.3% while delivering the same level of water to customers. Equivalently, on average water utilities could potentially save 63,479 MWh per year. Water treatment complexity, source of raw water and population density were factors that influenced energy efficiency of drinking water supply processes. Conclusions of this study are useful to water regulators and water companies for informed decisions towards a low-carbon urban water cycle.