Recycled Water: Quantifying Some of Its’

Hidden Advantages

Gary Wolff, P.E., Ph.D.Principal Economist &

Engineer9 March 2006

The Advantages, Today:

• Yield Reliability

• Cost Stability

Yield Reliability: Acknowledgments and Disclaimers

• This Work Was Funded by the Bureau of Reclamation; Thanks to Steve Kasower and Kevin Price

• Thanks Also to Mark Buehler, Tom Chesnutt, Michael Hanemann, Michael Kiparsky, Bob Raucher, and Bob Wilkinson, for Sharing Their Thinking on This Topic

• Disclaimer: The Following Results Are A Mix of Fact and Fiction

A Fictional Water Supply Problem

Water and Financial Managers Face A Similar Problem:

How To Deliver Water or Pension Checks Year After Year, Reliably, Despite Weather or Stock Market Uncertainty

Satisfying Growth In Demand:The Old Math

DTDE

2 S.D.

Annual Reservoir Releases Available For Use (units per year)

% of Years

SN

Satisfying Growth in Demand: Portfolio Math

• On Previous Slide, SN = ( DT – DE ) Leaves Out Uncertainty in Supply Sources

• Should Write: SN = ( DT – DE ) + SR

• Where SR Is Insurance Against Uncertainty

• And SR Depends On:

– Variability of Existing (E) and New (N)– Correlation Between E and N Sources

Comparing Some Fictional Options

Source of SN S.D. of N

Correlation Of E & N

SN / Unit of Growth

Desalinated or Recycled Water

0% 0.0 1.00

Import X 10% 1.0 1.25

Import Y 20% 0.8 1.55

Landscape Use Efficiency

10% -1.0 0.85

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Desalinated orRecycled Water

Import X Import Y Landscape UseEfficiency

Do

llars

Per

Un

it

Average Unit Costs Constant-Reliability Unit Costs

Adjusting To Achieve Constant-Reliability Can Change Decisions

Cost Stability• Recycled Water Is NOT Very Energy Intensive• Its Variable Costs Are A Smaller Percent of

Operating Costs Than Seawater Desalination• Consequently, Energy Price Increases And

Volatility Affect The Cost of Recycled Water Less Than The Cost of Desalinated Water

• This Reduced Exposure to Energy Price Increases And Volatility Is A Quantifiable Advantage

Recycled Water Is NOT Very Energy Intensive (SDCWA Data)

0500

100015002000

25003000350040004500

ColoradoRiver

Aqueduct

State WaterProject

Groundwater ReclaimedWaste Water

SeawaterDesalination

BrackishWater

Desalination

Ocean-Towed Water

Bags

Ener

gy In

tens

ity (k

Wh/

AF)

Impact of Energy Price Changes on Water Cost Over Time (LA Area)

0

0.5

1

1.5

2

2.5

31971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

Year

Rela

tive C

ost

in L

A (

No

min

al

$)

Recycled Water Desalinated Seawater Gravity Surface Water

Impact of Energy Price Changes on Water Cost Over Time (SF Area)

0

0.5

1

1.5

2

2.5

3

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

Year

Rela

tive C

ost

in S

F (

No

min

al

$)

Recycled Water Desalinated Seawater Gravity Surface Water

ConclusionsRecycled Water is Even

Better Than You Think! However, We Need Case

Studies to Fully Quantify Hidden Advantages

Gary Wolff, P.E., Ph.D.gwolff@pacinst.org