The Economics of Groundwater Replenishment for Reliable Urban Water Supply

Lei Gao,Peter Dillon,Jeffery Connor

doi:10.3390/w6061662

Lei Gao, Peter Dillon + Show 1 more

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https://doi.org/10.3390/w6061662

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Abstract

This paper explores the potential economic benefits of water banking in aquifers to meet drought and emergency supplies for cities where the population is growing and changing climate has reduced the availability of water. A simplified case study based on the city of Perth, Australia was used to estimate the savings that could be achieved by water banking. Scenarios for investment in seawater desalination plants and groundwater replenishment were considered over a 20 year period of growing demand, using a Monte Carlo analysis that embedded the Markov model. An optimisation algorithm identified the minimum cost solutions that met specified criteria for supply reliability. The impact of depreciation of recharge credits was explored. The results revealed savings of more than A$1B (~US$1B) or 37% to 33% of supply augmentation costs by including water banking in aquifers for 95% and 99.5% reliability of supply respectively. When the hypothetically assumed recharge credit depreciation rate was increased from 1% p.a. to 10% p.a. savings were still 33% to 31% for the same reliabilities. These preliminary results show that water banking in aquifers has potential to offer a highly attractive solution for efficiently increasing the security of urban water supplies where aquifers are suitable.

Highlights

IntroductionIn some arid and semiarid regions, climate change is projected to lead to reduced inflows to surface water reservoirs that have traditionally been the main sources of city water supply [1,2,3,4]
Growing population is increasing demand for water in many cities
This paper evaluates the economics of aquifer injection and banking of climate independent supplies to enable increased use of groundwater during drought when there is a low surface water supply

Summary

Introduction

In some arid and semiarid regions, climate change is projected to lead to reduced inflows to surface water reservoirs that have traditionally been the main sources of city water supply [1,2,3,4]. More variable surface water supply and growing demand means that many urban water utilities are contemplating or have already made additional investments in less rain dependent supply sources. Unknown future inflows and unknown supply reliability from existing surface water reservoirs mean that if the future turns out wetter than anticipated, large capital investments can be underutilised and the full capital plus operating cost of small amounts of water supplied to ensure demand is met reliably may be very large [7]

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