Reports

Get the results of TWRI-funded research through technical and special reports. Find abstracts and full-text online for our reports.

TR-295

An Analysis of the Economic and Financial Life-Cycle Costs of Reverse-Osmosis Desalination in South Texas: A Case Study of the Southmost Facility

A. Sturdivant, M. Rister, C. Rogers, R. Lacewell, J. Norris, J. Leal, J. Garza, J. Adams

Desalination provides a supply alternative for potable water for many communities, along with possible defenses against security threats potentially affecting clean water supplies. The economic and financial life-cycle costs associated with building and operating the Southmost desalination facility (near Brownsville, TX) in South Texas are investigated using the spreadsheet model DESAL ECONOMICS©. Primary data key to this analysis include actual initial construction costs, annual continued costs (i.e., for source-water acquisition and transport, pretreatment, purification, and delivery), capital replacement expenses, and desalination-process parameters. The input data used reflect the unique location and quality of source water, process-flow design, asset selection and configuration, management structure, local cost rates, and employed operational methods unique to the Southmost facility. Thus, the specific results are only applicable to the Southmost facility for a specific time, but do provide useful information and insight into life-cycle costs for public and commercial desalination facilities in a more general sense.

Annuity equivalent costs are reported (on both a $/acre-foot (ac-ft) and $/1,000 gallons of finished water basis, f.o.b. (free on board) municipal delivery point) for seven individual operational/expense areas, as well as for the entire desalination facility. Results are also presented across different cost types, categories, and items. The baseline results are deterministic, but are expanded to include sensitivity analyses of useful life, initial construction costs, annual energy costs, and production efficiency rate, amongst others.

The current estimated total annual life-cycle costs (in 2006 dollars) to produce and deliver desalinated water to a point in the municipal delivery-system infrastructure for the Southmost facility are $769.62/ac-ft {$2.3619/1,000 gal.}. These baseline estimates apply to the Southmost facility and are sensitive to changes in the production efficiency level, and costs incurred for energy, chemicals, initial construction, etc. Also, results indicate significant outlays, beyond those of Initial Construction, are involved with desalination. For the Southmost facility, when a commitment was made to build a facility for $26.2 million, an implicit commitment for another $39.1 million (basis 2006 dollars) was also made for Continued and Capital Replacement costs. Investigation into life-cycle costs during the design and planning stages of a desalination facility can assist with determining the least-cost asset configuration to adopt and operational methods to employ.

Also included are modifications to certain key data-input parameters that provide ‘modified results’ which facilitate a more fair basis of comparing facilities and/or technologies. The modified results, which are considered appropriate to use when comparing to similarlycalculated values (for other facilities or technologies), are $615.01/ac-ft/yr {$1.8874/1,000 gal./yr} (basis 2006 dollars).

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