Understanding supply-side and demand-side to support water management in the Asia Pacific

In an interview with Chris O’Neill of Hydronumerics, supply-side and demand-side solutions to support water supply management came up, albeit briefly. This article explores this important issue more closely.

Water, as a resource, is finite. While the earth seems to be covered in water, only a small percentage of it is actually available for human use and consumption, posing a challenge when it comes to water management. How can stakeholders ensure that resources are used and managed appropriately when demand increases while supply stays the same?

Therefore, to adequately manage water assets, stakeholders must consider both supply-side and demand-side management. Both have benefits and drawbacks, and regardless of what approach is taken, education is key.

In the Asia Pacific region, the Asian Development Bank estimates that 80% of water resources are used for agricultural irrigation. This high percentage has management implications, as demand-side efficiency and supply-side augmentation, solutions must take into consideration how the agriculture water is being used, and for what exact purposes. New technologies and approaches, when applied to agricultural water, can have significant implications for water use, reduction, and reuse, allowing farmers to better prepare for and manage water scarcity challenges.

Supply-side water management

Supply-side water management works by increasing the amount of available water, which can be done in a number of ways:

  • Through finding new sources;
  • increasing storage capacities;
  • diverting water to increase supply at a particular asset; or
  • using technology to create clean, potable water from a previously unusable source.

Supply-side water management does not usually place a burden on users to change their own usage of the available water, at least initially, when the costs are borne by the government. However, these techniques are often expensive, meaning places with fewer financial and technological resources are unable to implement them easily, and those that do have the resources may still eventually be pressured to recover costs of maintenance and upgrades from water users.

Examples of agricultural supply-side augmentation or storage solutions that may be suitable for the Asia Pacific context could include the development of small farm-sized dams or implementing water reuse for crops that can use water that may be run-off from other crops.

Demand-side water management


Demand-side water management can be defined as reducing the amount of water that is being used by people for specific purposes, such as household use, for farming, or for municipal or industrial needs.

To reduce demand, stakeholders can implement various measures. A structural or operational change, such as fixing leaky systems or upgrading existing infrastructure to reduce waste is one technique. Economic approaches focus on financial incentives for use reduction, or disincentives for overuse. Public education works to change user behaviour based on sharing knowledge about why reducing demand is important. Water management professionals may use one, or any of these techniques.

For demand-side water management to work, water managers must understand both the water resource and its users, in full. To reduce the burden on any given asset, those working in water management must explore how reducing demand will impact the user population, and if reducing demand is even feasible.

For example, Hydronumerics’ Chris O’Neill saw this challenge play out in India, noting many large companies wanting to invest in infrastructure to add supply-side management, without understanding the demand side of the equation.

Similarly, according to O’Neill, some water users do not understand their own role in demand-side management, experiencing a disconnect between how they use the water supply, and how that affects the overall availability and longevity of the resource.

Education and understanding water values are key to implementing effective demand-side water management processes. Demand-side management measures are successful when water managers understand how water is used by the people depending on the resource, and they work to educate users on best practices to reduce demand, for example by introducing efficiency measures that are suitable for the specific water use.

In an agricultural setting, demand-side measures may include replacing inefficient pumps, or using drip irrigation when appropriate. Many demand-side management approaches for agriculture look at how both water and energy demand can be addressed when implementing new technologies. Successful demand-side management interventions also have a community capacity building element. Individuals need to understand why the measures and important and what benefit they will receive before they sign on to any behaviour change or new technology.

Focusing on the long-term health and availability of a water resource can help show users why it is so important to manage water carefully.

Which approach is best?


To effectively handle water management, stakeholders have to be willing to look at both approaches and consider what will work best, whether that will be supply-side management, demand-side management, or a combination of both.

The first step to implementing any supply-side or demand-side program is to speak with the stakeholders involved, and fully analyse the data and information available. This initial scoping may take a fair amount of time, but a comprehensive understanding of the situation is essential to implementing an effective solution. Decisions and projects that take place with incomplete knowledge can waste precious money, human resources, time, and even have the unintended consequence of damaging trust.

Various reports, white papers, and industry guidelines emphasise the critical value of stakeholder engagement for water management, and a good starting point, if you are looking for more information, is the OECD 2015 Stakeholder Engagement for Inclusive Water Governance publication.

It has been demonstrated that reducing demand is usually somewhere between three to ten times less expensive than developing water-supply options, such as building reservoirs or importing water from distant places. In Australia, community engagement has helped to identify opportunities for demand-side management approaches, which has allowed governments to avoid costly new infrastructure projects.

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