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Costing and evaluation of desalination Technologies-a case study in India

Conference Paper · January 2015

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Trombay symposium on Desalination and Water Reuse
22-23 January 2015, Mumbai, India

Costing and Evaluation of Desalination Technologies-

Case Studies in India.
R. Venkatesan1*, Raju Abraham2
1
Senior Consultant, National Council of Applied Economic Research, 11, Indraprastha Estate, New Delhi- 110002
2
Scientist, National Institute of Ocean Technology, Velachery-Tambram Road, Chennai-600 100, India
* Corresponding author. Tel: +91 11 23379861, Fax: +91 11 23370164, E-mail: rvenkatesan@ncaer.org

Abstract: There are several desalination technologies like Reverse Osmosis (RO), Multi Stage Flash evaporation
(MSF), Multi Effect Distillation (MED), Low Temperature Thermal Desalination (LTTD) etc. gaining momentum
due to acute potable water shortages and industrial water requirements all over the world. Any particular technology
cannot be the best option everywhere: each location would choose the best technology. The unit of analysis cannot
be the technology, but has to be location or area affected by the project. All technology options in the project area
would be evaluated by arriving at a composite cost of economic cost, environmental cost, as well as ecological cost
per unit output of desalinated water. The economy cost would consider plant cost, labor cost, power cost, utility cost
etc. to arrive at the cost per litre of desalinated water that would yield an economic Internal Rate of Return (IRR)
equivalent to social discount rate (12%). The environment cost is a relative cost due to the excess specific power
consumption over the best technology option in the project area evaluated in terms of equivalent carbon release. The
ecological cost is evaluated as the cost due to a change in the eco system measured as the change in GDP in project
catchment area per litre of desalinated water due to the introduction of a particular technology. The present paper is
an attempt to estimate the composite cost of desalinated water for three technologies such as RO, MED and LTTD in
different project contexts in India. The first project context is for a small Island with a need for a standalone
desalination unit for pure drinking water; the second being a large Island with an existing power plant which needs a
cogeneration desalination plant for supply of drinking and industrial water; the third is for a coastal area with an
existing power plant, cogeneration desalination plant; and the fourth being a coastal area with no thermal plant, a
standalone desalination plant.

Keywords: Cost of water, environmental cost, ecology cost, technology option

1. Introduction
Global demand for fresh water has been increasing at around twice the growth rate of world
population; such increased demand, is not being matched by the increased water recharge. Sea
water desalination is being conceived as the key alternative to fill the gap. Worldwide desalination
market is growing a rate of 10-20% and the present global desalinated water production is
estimated as 66.5 million m3/day. The water demand is expected to double within 4-5 years. The
cost of desalinated water is going down considerably and emerging as a competitive source vis-à-
vis with other natural sources existing due to an increased cost of extraction, transportation or
intermittent availability. The desalinated water cost has reduced to less than 0.5 US$/m 3 from a
cost of about 10 US$/m3 during the 1970’s. The major factors that contributed to the reduction of
cost of water are development of technology, utilization of low cost materials, considerable
increase in the plant capacity, energy recovery, etc. However there is a reversal in trends in recent
years due to increase in material, land, labor cost and stringent environmental regulations. The
reduction in input water quality also causes an increase in pre-treatment costs [1]. Most of the cost
estimations of water neglect the negative impact on environment and ecology. Certain
technologies have a positive impact on ecology which ultimately benefits the local economy. The
present paper discusses the ecological and environmental impact to be accounted while costing
water for decision making purposes.
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Trombay symposium on Desalination and Water Reuse
22-23 January 2015, Mumbai, India

1.1. Desalination Technologies

The commercial desalination technologies can be divided into two main categories: thermal
desalination and membrane separation process as shown in the fig. 1. Selection of a suitable
technology is based on different factors such as capacity of the plant, cost of electricity, cost of
thermal energy, cost and availability of skilled labor, quality of feed water, quality of product
water, operation and maintenance issues, environmental regulations etc.

Desalination
Technologies

Thermal Desalination Membrane-based

Stand-alone Co-generation Reverse

using steam from Osmosis
power plants

LTTD MED
Lakshdweep Kiniolos
Islands (NIOT) Island in MSF MED
using Greece using
temperature geothermal
difference energy of the
between surface island
and deep sea
level water

Note:
 LTTD: Low Temperature Thermal Desalination
 MED: Multi Effect Distillation
 MSF: Multi Stage Flash Distillation
 Cogeneration: waste heat utilisation (power plants)
Fig. 1. Comparison of desalination technologies.
Source: Aviation Meteorological Services, Sea Water Desalination, Ornamental Fish Culture, and Lobster and Crab Fattening: Economic
Benefits, Project Impact Analyses and Technology Policy, NCAER 2002

1.2. Principles of operation

 In RO, water at high pressure is made to pass through a porous membrane having pores of
size of 0.5–1.5 nm. The dissolved solids are left behind. Higher flexibility and operating
capacities make RO technology attractive. Need of chemicals during the pre and post
treatment is an important limitation.
 In MSF, heated water flashes inside a low pressure chamber and the steam generated is
condensed in a sequence of stages. Large capacity MSF plants have been built.
Requirement of steam and problems associated with high temperature operation restrict the
use of MSF plants.

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Trombay symposium on Desalination and Water Reuse
22-23 January 2015, Mumbai, India

 Multi-effect distillation (MED) was the first process used for sea-water desalination. It is
based on heat transport from condensing steam to sea water or brine in a series of stages or
effects. It is a distillation process where the evaporation of sea water is obtained by the
application of heat delivered by compressed vapour inside horizontal tubes.
 LTTD works on the principle of utilising temperature gradient between surface sea water
and deep sea cold water to evaporate the warmer water at low pressure and condense the
resultant vapour with the colder water to obtain freshwater. This can also be implemented
utilising the temperature gradient in cooling water discharge in power plants. The harmful
effects of the thermal effluents are thus reduced.

Detailed reviews on technologies are available with references [2-5]. However the scope of this
paper is restricted to a comparison of MED, LTTD and the RO based desalination technologies in
the broad framework of economic, environmental and ecological impact of technology adopted on
cost of water generated.

1.3. Current trends on cost of water

Desalination has become a major option to meet the demand-supply gap in the growing water
demand scenario. Desalination market is growing and expected to reach over US$ 31 billion by
2015 and 50% of the investment will for SWRO due to the higher flexibility. Among the thermal
plants the tendency is that MED will replace MSF or compete with RO due to the low cost energy
availability and increasing feed water pollution. Co-generation plants for power and water shall be
an attraction for future. Also hybrid plants with different desalination technologies are good
combination for flexibility in operation and reduction in cost [1, 6]. Due to technology
developments, increase in plant capacity and process optimization, the cost of water by RO and
thermal technology has gradually reduced considerably in the past. However there is an increasing
trend in cost due to the increase in cost of land, equipment, electricity, manpower and raw
materials. In additional to that environmental regulations are stricter and cost of treatment and
approvals are increasing. Besides, ecological costs due to a disturbance in the eco system need to
be considered.

A large increase in urbanization and industrialization is predicted for future which means the
demand for high quality water is considerably increased compared to the higher demand for
agriculture sector in the past. Figure 2 shows the projected increase in tendency in the domestic
and industrial sector up to 2050[7]. This shall have negative impact on water cost due to an
increased demand for high quality water.

2. Factors that influence cost of water

2.1. Fixed Investment cost of the plant
The fixed cost of desalination plant is based on the cost of the land, equipment, construction of
building, intake and discharge systems etc. This includes cost of designs, approvals, resettlements
and cost of construction of pre and post treatments systems.

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Trombay symposium on Desalination and Water Reuse
22-23 January 2015, Mumbai, India

2.2 Operating cost of the plant

The operating cost of the desalination plant includes the cost of power, salaries, utilities,
consumables etc. Most of these are variable cost and depends on the local factors. Nearly 55-60%
of water cost is due to operating expenses and for SWRO systems it is higher compared to thermal
systems.

Projected change in water share in India

100
90
80
70
Percentage

60
50
40
30
20
10
0
2000 2010 2025 2050
Domestic 5 6 8 11
Industry 6 9 11 18
Agriculture 89 85 81 71

Fig. 2. Prediction of high quality water requirement for future.

2.3 Environmental factors for water cost

Adoption of technologies for desalination can have an adverse environmental and ecological side
effects. For instance, adoption of certain technologies can cause considerable damage to ecology
and environment in a number of ways including (i) the uncontrolled discharge of concentrated
brine that can contaminate water aquifers and damage aquatic ecosystems as discussed by Von
Medeazza et.al.[8] The brine discharge may also contain pre-treatment chemicals, corrosion
materials, nuclear contaminants, etc.; This can cause “sea desertification” and “imbalance to the
marine eco-system”. (ii) desalination plants use the thermal energy from an attached power plant
from the waste water discharge of the condenser unit. (iii) The electrical energy used in the process
of desalination emits carbon dioxide, which results in environmental pollution. (the lesser the
energy requirement by desalination technology, the lesser this indirect environmental impact is
going to be) (iv) Desalination plants may cause noise pollution, gaseous emissions and chemical
spills.

As far as the harmfulness of discharged concentrate is concerned, total dissolved solids (TDS),
temperature and specific weight (density) of the discharge are of critical importance as they result
in damage to the aquatic environment. TDS discharge is directly proportional to the recovery ratio
of the plant. The increased temperature can also harm the aquatic life. The increased density
results in the sinking of the discharge termed as desertification of seas causing harm to certain
parts of the ecosystem.
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Trombay symposium on Desalination and Water Reuse
22-23 January 2015, Mumbai, India

•Plant cost
Fixed Investment •Based on location
cost •Based on capacity
•Re-settlement

•Treatment cost
•Based on feed water quality
•Based on product water requirement
Operating cost •Cost of spares
•Utlity cost
•Energy cost
•Labor cost

Environemental
• Cost due to higher specific enegry consumption
cost

•Brine or chemicals discharge consequent impact on the eco

Ecological cost
system

Fig. 3. Factors that contribute to the cost of water.

2.4 Ecological effects due to desalination plants

The most important ecological impact associated with desalination process arises due to brine and
hot water discharge into the sea. However there are positive benefits in installing desalination
plants such as MED or LTTD using flue gas/waste steam or hot water discharge from power plants.
Such plants reduce heat or waste discharge to the environment and the carbon credit due to this
must be accounted. LTTD also works with ocean temperature difference at suitable locations such
as Islands. The discharge water from the desalination plant is around 15-18oC and can be used for
air-conditioning. Deep sea cold water is rich in nutrients and this can be used for aquaculture. As
a result of deep ocean water discharge into the sea, fishing activity shall be enhanced. The potential
ecological and economic benefits must be accounted to the cost of the desalinated water.

Fig. 3 shows the different factors that contribute to the cost of water.

2.5 Technology Choice – Methodology Outline

The choice of technology was reviewed on the basis of the composite cost of providing one litre
of desalinated water of each technology option. The composite cost was arrived at as the
cumulative cost of the following:

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Trombay symposium on Desalination and Water Reuse
22-23 January 2015, Mumbai, India

i. Price per litre of desalinated water that would yield a 12 per cent Internal Rate of Return
(IRR) on investments in desalination plant, assumed as the base cost. The test discount rate
of 12 per cent used is the Social Discount Rate.

ii. Environmental cost per litre of desalinated water is arrived at on the basis of additional
energy consumption per litre of desalinated water over the technology option with the least
specific energy consumption. In the Indian context, 1 megawatt hour (MWH) energy
consumption is assumed to imply a tonne of carbon dioxide emission. If a process involves
a reduction of specific energy consumption by 1 MWH, it is assumed to have earned one
Certified Emission Reduction (CER).

iii. Ecological cost per litre of desalinated water is arrived at as the change in GDP in the
‘project catchment area’ due to the introduction of a particular technology derived per litre
of desalinated water. The reduction/increase in final output in the project area is arrived at
by evolving an Input–Output Table for the project catchment area and arriving at both
direct and indirect effects of the introduction of technology from the Leontief-Inverse
Table.

The composite cost was arrived as the sum of base cost, environmental cost and ecological cost
per unit output of desalinated water.

In order to understand how the direct and indirect effects of a technology introduction on project
area domestic product are computed, we need to construct a Leontief Inverse for the project area.

Economic interpretation of Leontief Inverse is briefly explained in the next section as an

understanding is crucial to estimate the ecological cost per litre of desalinated water. In a simple,
refined form originally designed by Professor Leontief, an input-output coefficient table
represents, in each of its columns, a technique of production.
AX + Y = X ……………… (1)
Relationship (a) is the basic input-output system of equations. Matrix A is called the input-output
coefficient matrix, vector X is the vector of output and vector Y is the vector of net final demand.

Mathematically, the vector of output X in the system of equation (1) can be solved as follows:
X-AX = Y
(I-A)X = Y………………… (2)
X = (I-A)-1Y
Where I stands for identity matrix which is a square matrix where all the diagonal elements are
equal to 1 and all other elements are equal to zero. (I-A)-1 is the Leontief inverse which can be
calculated.

The input structures represented by the A-matrix show the type and amount of various inputs each
industry requires in order to produce one unit of its output but tell nothing about indirect effects.
For example, the effect of the production of a motor vehicle does not end with the steel, tyres and
other components required. It generates a long chain of interaction in the production processes
since each of the products used as inputs needs to be produced and will, in turn, require various

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Trombay symposium on Desalination and Water Reuse
22-23 January 2015, Mumbai, India

inputs. The production of tyres, for instance, requires rubber, steel and cloths, etc. which, in turn,
requires various products as inputs including the transport service provided by motor vehicles that
necessitates the production of motor vehicles in the first place. One cycle of input requirement
requires another cycle of inputs which in turn requires again another cycle. This chain of
interaction goes into infinity. However, the sum of all these chained reactions is determined from
the value of the Leontief inverse. The changes in the GDP due to the introduction of a technology
can be now measured as the changes due to both direct and indirect effects.

3 Comparison of costing for MED, RO and LTTD technology

3.1 Unit cost of water
An MED plant located in a power plant utilizes the waste steam (if available) above 0.4 bar (a) or
bled steam from the last stages of turbine after the power generation for this purpose. If thermo-
vapor compressor is employed for maintaining vacuum as in most of the MED systems, steam
pressure above 3 bar (a) is required. The brine discharge from the system is normally above 10%
salinity and temperature of the feed water. The chemicals present in the discharge are anti-fouling
and anti-scaling agents. Hence MED technology has the positive aspect of reducing global
warming as well as the negative impact of chemical discharges into the seawater. SWRO system
doesn’t utilize any thermal energy, however the chemicals used for pre- and post- treatment need
to be discharged. The chemicals present is a considerably higher than that of MED plant. There
are no chemical discharges to the sea water from LTTD plant. An LTTD plant utilizes ocean
temperature difference between the deep water and surface water. The deep sea water drawn up
for condenser and later discharged near the ocean surface can be used for mari culture and air-
conditioning. Appendix 1-3 and Fig. 4 shows the costing of water considering the fixed and
variable costs for MED, SWRO and LTTD technology of 1 MLD capacity choosing a power plant
premises as location. The total economic cost in Rs/m3 is computed first considering the capital
and operating costs. Environment and ecology cost is added to it separately. The ecological cost
of MED or LTTD is negligible and hence not considered.

3.2 Environmental and ecological impacts

The reduction of 1 MWh specific energy consumption per unit output is valued at 1 Certified
Emission Reduction (CER) equivalent; since 1 CER is traded at six Euro, it can be valued the
additional environmental cost per litre of desalinated water assuming that the exchange value of
unit Euro at around Rs 84. The additional environmental cost works out to a negligible 0.23 paise
per litre. The aquaculture now contributes more than 20% to global aquatic food production. It is
estimated that the annual revenue from fish culture from a 10 MW OTEC/Desalination facility is
$3.3 million/year, which can be increased up to $82.5 million/year with more efficient species [9].
Similarly a 1 MW net OTEC/Desalination plant can supply cooling water for air conditioning for
500 rooms after the power and water production. However pumping of large quantity of seawater
can disturb the environment and destroy marine larvae and living beings.

3.3 Costing Software for Desalination

There are software programmes like DEEP, WTCost© available for costing of water using
different desalination technology. However these software programmes apart from being

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Trombay symposium on Desalination and Water Reuse
22-23 January 2015, Mumbai, India

inaccurate do not consider the environmental or ecological costs. These programmes serve as
guidelines for feasibility studies.

Fig.4. Cost of water in Rs/m3 including environment and ecological cost

4 Conclusion
Appropriate costing for water has become essential for the selection of suitable technology, pricing
of water, etc. especially when the demand for high quality water for industrial and domestic
requirement is increasing. The environmental and ecological impact of desalination technologies
are normally neglected while estimating the water cost. Three technologies namely MED, SWRO
and LTTD are compared and the attempt is done to include the environmental and ecological
factors for costing. Site specific measurements and information is required for further refinements.
Following is the illustrative example of technology options for different project areas.
Table 1 Technology options in India
Illustrative Skilled Labour Technology
Project Area Ecological Cost
Examples Supply Option
Small Island Lakshadweep
High** Constrained LTTD
(Standalone)* Islands
MED or LTTD or
Big Island (Cogeneration) Sumatra Low Adequate
RO
Coastal Area Thermal
Tuticorin High** Adequate MED or LTTD
Plant Site (Cogeneration)*
Coastal Areas Urban More than
Chennai Medium MED or RO
Cities (Cogeneration) Adequate
Coastal Areas with no
More than
Thermal plant Kochi Medium RO
Adequate
(Standalone)

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 Trombay symposium on Desalination and Water Reuse
22-23 January 2015, Mumbai, India

Note: * Significant proportion of population is dependent on fisheries. ** Ecological cost is defined as the
change in GDP due to disturbance in the ecosystem on introduction of a technology. Therefore, high
ecological cost arises because of disturbance in the Coral Island’s ecosystem.

References
[1] N. Ghaffour et al., Technical review and evaluation of the economics of water desalination:
Current and future challenges of better supply and sustainability. 309(2013)197-207.
[2] El-Dessouky H. L and Ettouney H.M., Fundamentals of sea water desalination, Elseveir
Science B. V(2002).
[3] Raphel Semiat, Desalination: Present and Future, Water International, 25, 1(2000) 54-65.
[4] Adrea Cipollina et. al. Sea Water Desalination: conventional and renewable processes,
Springer (2009).
[5] Mathioulakis,E. et al. Desalination by using alternative energy-Review and state of the art,
Desalination, 203(2007)346-365.
[6] K. V. Reddy and N. Gaffour, Overview of the cost of desalinated water and costing
methodologies, 205(2007)340-353.
[7] www.ey.com/India Ernest &Young Pvt. Ltd. Water sector in India, Sept 2011.
[8] Von Medeazza, G. M. et al., Desalination in Chennai: What about the Poor and the
Environment?, March 18, 2006, Economic and Political Weekly.
[9] Fujio Matsuda et al., The Ultimate Ocean Ranch, Sea Technology, August 1999.

Appendix 1 Unit cost of water including environmental and ecological cost in a power plant.

Rs/m3 of desalinated water to yield 12% IRR

Ecologi Total
Economic Cost Environmental Cost
cal Cost Cost
Capital Operatin Opera Operati Total Power Extra Total Total Rs/m3
cost g cost- ting ng cost Econo Consumpt Power Environ Ecologi
Technology
Fuel and cost - - mic ion (per Consumpti mental cal Cost
1
Chemical Maint Manpo Cost kWh/m3) on (per Cost
enanc wer kWh/m3)
e
MED 29.1 28.0 4.4 8.9 70.4 22.0 00.0 0.0 0.0 70.4
RO 23.3 27.1 8.9 14.8 74.1 50.0 28.0 1.4 140 215.5
LTTD 47.2 39.7 3.0 8.9 98.8 80.0 58.0 2.9 0.0 101.4

1
Ecological cost is considering 10% of fish population affected.
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Trombay symposium on Desalination and Water Reuse
22-23 January 2015, Mumbai, India

Appendix 2 Estimation of unit cost of water for 1 MLD MED, RO and LTTD plant in a
mainland power plant premises.
MED plant RO plant in
LTTD plant in
in Mainland Mainland Justification/ Remarks
Item Mainland
(1000 (1000 m3/day)
(1000 m3/day)
m3/day)
800
Land area required ( m2) 500 600 1. Cost indicated in
Lakhs of Rupees
Land cost2 30 40 unless otherwise
50
specified.
Capital cost of the plant3 900 715 1450 2. MED and LTTD
plant is power plant
Electric power
92 330 based which is site
consumption(kWh) 210
specific.
Cost of Fuel or
3. MED plant requires
Chemicals/year 62 8 6
steam at 75oC
( Steam cost)
@3600 kg/hr and
Construction Period
steam cost is
(months) 20 18 24
approximately Rs
Cost of power/year4 5 40 91 143 200/ton.
Maintenance cost for one 30 4. An LTTD plant
15 10
year utilizing deep sea
Manpower for operation cold water can have
30 30 an ecological gain
and maintenance 50
Total operating cost/year 85 171 183 about 11 Rs/m3 with
combined
Water cost (Rs/m3) 70.4 74.1 98.5 utilization of
Environmental cost 1.4 aquaculture and air-
0 2.9
(Rs/m3) conditioning.
5. Ecological gain of
Ecological cost / 140 MED or LTTD
0 0
gain(Rs/m3) couldn’t be
estimated as of
Actual cost of water now.
produced(Rs/m3) 70.4 215.5 101.4

2
Land cost is highly site specific.
3 Projected cost of MED/RO/LTTD is based on the market survey during 2013-14.
4 Consumption of power is considered as 2.2 kW/m3 for MED, 5 kW/ m3 for RO and 8 kW/m3 for LTTD.
5 Unit cost of power Rs 5/kWh.

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 Trombay symposium on Desalination and Water Reuse
22-23 January 2015, Mumbai, India

Appendix 3 Unit economic cost of water without environmental and ecological factors.

1 MLD MED plant in power plant

Year Capital Operating Operating Operating Lakh
cost cost-Fuel and cost - cost - Litres/year
Chemical maintenance Manpower
1 533
2 367 34 15 30 1200
3 102 15 30 3650
4 102 15 30 3650
5 102 15 30 3650
6 102 15 30 3650
7 102 15 30 3650
8 102 15 30 3650
9 102 15 30 3650
10 102 15 30 3650
11 102 15 30 3650
12 102 15 30 3650
13 102 15 30 3650
14 102 15 30 3650
15 102 15 30 3650
16 102 15 30 3650
17 102 15 30 3650
18 102 15 30 3650
19 102 15 30 3650
20 102 15 30 3650
21 102 15 30 3650
22 102 15 30 3650
23 102 15 30 3650
24 102 15 30 3650
25 102 15 30 3650
26 102 15 30 3650
Present Value 689 739 118 235 26,440

Capital Operating Operating Operating Total Cost

cost cost-Fuel and cost - cost -
Chemical maintenance Manpower

Rs/m3 of
desalinated water 29.11 28.0 4.4 8.9 70.4
to yield 12% IRR

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