Abstract
This paper demonstrates how to make investment decisions that optimally improve water supply resilience, taking into consideration both future uncertainty and management flexibility. The demonstration is done by evaluating investment strategies for a 38 Ml/d water treatment plant serving an urban area with approximately 75 000 inhabitants, where there is uncertainty with respect to future population growth, industrial production, external demand and the amount of rainfall due to climate change. It is shown that the quantification and comparison of the possible reductions in service and intervention costs over comparably long periods enables the optimal investment decisions – that is, the ones with the optimal trade-offs between stakeholders. Additionally, it can be seen that the used methodology enables the consistent and transparent consideration of (a) the concerns of multiple stakeholders, (b) the future deep uncertainty associated with key concerns and (c) the flexibility of infrastructure managers to make decisions in the future using new information. The methodology also ensures that managers have clear plans of action and considerable insight into the extent of required future financing.
Highlights
The provision of high-quality drinking water to urban areas is essential
Some of the most relevant example works in the field are shown in Table 1, along with the future uncertainty and impacts considered in each investigation, as well as the simulation method used
This paper demonstrates how to make investment decisions that optimally improve water supply resilience, taking into consideration both future uncertainty and management flexibility
Summary
The provision of high-quality drinking water to urban areas is essential. Doing so continuously over long periods efficiently and effectively, is a challenging task. Investing in water supply resilience considering uncertainty and management flexibility Adey, Martani and Hackl uncertain Four reasons for this uncertainty are the uncertain growth in the population of urban areas, the uncertain water needs of industry, the uncertain needs of neighbouring communities and the uncertain effects of climate change on rainfall patterns. It is shown how to make investment decisions that optimally improve water supply resilience where there is uncertainty with respect to future population growth, the water requirements of industry and neighbouring communities and the amount of rainfall due to climate change. The example infrastructure investigated is a 38 Ml/d water treatment plant serving an urban area with around 75 000 inhabitants, where there is uncertainty with respect to amount of rainfall due to climate change and future population growth. It is found that the optimal investment decision to improve water supply resilience is to do nothing and wait for new information
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