Analysis of Drinking Water treatment costs – with an Application to Groundwater Purification Valuation

Abstract

Understanding the factors affecting drinking water production costs is crucial for choosing a cost-effective solution for public drinking water supply systems. An important determinant of water treatment costs is the purification of raw water. Despite water purification being a well-acknowledged ecosystem service, its monetary value has not been assessed much yet. We present the first study analysing the determinants of drinking water production costs and valuating groundwater purification in the Czech Republic. We tested the impact of the type of raw water, the amount of drinking water produced, electric power consumption and treatment technologies and chemicals. The results suggested that drinking water production from groundwater was cheaper than from surface water. Even though drinking water production from groundwater was cheaper than from surface water, the application of some technologies, for example, chlorine or manganese removal, increased the production cost. Hence groundwater production costs can exceed surface water production costs. The outcome of the regression was applied for the valuation of groundwater purification. The valuation was further used for the development of monetary drinking water accounts within the System of Environmental- Economic Accounting – Ecosystem Accounting.