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TitleThe Economics of Groundwater Replenishment for Reliable Urban Water Supply
Publication TypeJournal Article
Year of Publication2014
AuthorsGao, L., Connor, J. D., Dillon, P.
IssueSpecial Issue Policy and Economics of Managed Aquifer Recharge and Water Banking
Paginationp. 1662-1670
Date Published06/2014
Publication LanguageEnglish
ISSN Number2073-4441
Keywordsdrought, economics, groundwater, Markov switching model, Monte Carlo, risk assessment, water allocation
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. [authors abstract]

URLhttp://www.mdpi.com/2073-4441/6/6/1662
DOI10.3390/w6061662

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