The Underestimated Cost of Delivered Water from Occasionally Operating Water Projects

Abstract Many arid areas contain cities that are exhibiting rapid increases in water demand and are considering or developing large, expensive water projects. A number of those projects are expensive to operate and thus are used only under drought with other less costly projects supplying basic needs. But in considering proposed projects, the delivered water cost estimates are typically developed assuming full capacity, year-round operation. This underestimates the cost of water deliveries. In this paper, we examine the magnitude of this underestimate in the context of partially operating desalination possibilities. We find that applying the fixed cost to a plant operating at 10% of capacity can raise the actual delivered water cost by up to 10 times relative to that computed under assumed full operation. Thus, ignoring partial operation biases cost comparisons and may lead cost conscious decision makers to choose more expensive projects. We argue it is desirable to factor in a realistic operation level so as to yield an accurate cost ranking of potential water projects.