Forecasting the economic costs of desalination technology

Government policy, in the form of grants and contracts for desalination technology, has had a major impact on steadily declining costs of desalination. The process, reverse osmosis (RO), exhibits economies of scale, which increases its feasibility as a water treatment technology for large populations. Ultrafiltration, an RO pre-treatment, also shows economies of scale. The real economic costs of desalination technology can be forecast using an ARIMA model. If these costs fall below those of conventional water treatment processes, RO and ultrafiltration become competitive with conventional water treatment technology. Our ARIMA forecasts are validated by using independent plant level cost data.

The US Federal Government’s policy of investing in R&D from 1952 to 1982 resulted in the unit cost of desalted water to decrease steadily. Our ARIMA model forecast indicates that desalination costs will continue to decline. Costs are likely to continue to fall due to the development and improvement of desalination technologies. UF, a desalination pretreatment technology, also exhibits economies of scale. As these costs fall below those of conventional water treatment technologies, state-of-the-art desalination can be utilized in all water treatment plants. The extent of the use of desalination in the future depends on the decreasing costs, the increasing demand for drinking water, the decreasing viability of alternatives, and stricter drinking water and discharge standards. The decline in energy costs, especially when using renewable energy, will make membrane technology for water production even more attractive in the future. A case in point is the Tampa Bay desalination plant, which uses gravity as part of its energy requirements, making it perhaps the most efficient plant when it reaches full capacity in 2008. It is expected that the cost of water at Tampa Bay will fall to $0.49 per m3.