Desalination 205 (2007) 340–353

Overview of the cost of desalinated water and costing

methodologies

K.V. Reddy, N. Ghaffour*

Middle East Desalination Research Center (MEDRC)
PO Box 21, Al-Khuwair, PC. 133, Muscat, Sultanate of Oman
Tel: þ968 695 351; Fax: þ968 697107, email: nghaffour@medrc.org.om

Received 9 February 2006; accepted 6 March 2006

Abstract
In the last decade desalination has been considered as a solution for potable water needs only for specific
water scarcity countries having cheap fuel. Now, desalination is extensively used, even where it was unthinkable
twenty years back, due to reduction in desalination cost. The cost reduction is due to new developments and
improvements in desalination technologies, particularly in RO technology. The RO is a well accepted technol-
ogy due to recent increase in energy prices and takes up a major share in worldwide market. But, it is not able to
achieve its proper share in the Arabian Gulf market due to difficult seawater composition and extensive
historical use of thermal desalination. But RO still has potential in hybrid systems in the Arabian Gulf to
account for seasonal and night to day fluctuations in the demand for power and water. There is a need for an
accurate methodology for evaluation of desalination costs to help in selection of appropriate technology suitable
for a specific location, for process design and other requirements. However, existing methodologies and soft-
ware packages do not account for all the parameters that contribute for desalting cost and their accuracy is
limited to specific conditions. This paper presents an overview of the trends in desalination costs for major
desalination technologies like Multi Stage Flash, Multi Effect Distillation and Reverse Osmosis and review of
costing methodologies.

Keywords: Desalination costing; Costing softwares; Cost trends; Technologies developments

*Corresponding author.

Presented at EuroMed 2006 conference on Desalination Strategies in South Mediterranean Countries: Cooperation
between Mediterranean Countries of Europe and the Southern Rim of the Mediterranean. Sponsored by the European
Desalination Society and the University of Montpellier II, Montpellier, France, 21-25 May 2006

0011-9164/07/$– See front matter  2007 Elsevier B.V. All rights reserved
 K.V. Reddy, N. Ghaffour / Desalination 205 (2007) 340–353
1. Introduction
The cost of desalination is decreasing in
recent times due to the developments in
desalination technologies and desalination is
now able to successfully compete with
conventional water resources for potable
water supplies. However, the cost of desalina-
tion is site-specific, mostly based on the qual-
ity of the feed water available at the selected
site. It is thus essential to select an appropri-
ate desalination technology that produces
desalinated water at a low cost for any site
under consideration.
Most desalination plants in the Arabian
Gulf region are co-generation type, producing
both power and water. The power and water
demand ratio varies considerably in different
seasons. To cope with such situation, hybrid
desalination systems are generally suitable
and in recent plants such a concept has been
used. Right costing methodologies for both
desalination and power plants, are thus
required to select appropriate combinations
and capacities of co-generation hybrid desali-
nation configurations.
Prices of fossil fuels have increased consid-
erably during the last five years and the same
trend may continue. In future, the use of
nuclear or renewable energy for desalination
may be cost-effective. Since there are many
types of nuclear power generation reactors
and renewable energy sources, cost estima-
tions for many combinations of energy
sources and the desalination process for any
particular site will be required to evolve from
economical configurations.
The above requirements necessitate the
need for an accurate methodology/software
that evaluates the cost of desalinated water
produced by each technology for the site-spe-
cific conditions to help in selecting a suitable
technology for that specific location. How-
ever, existing methodologies and software
341
packages do not account for all the cost para-
meters and their accuracy is limited to specific
conditions.
Reliable desalination cost data is required
for policy makers, planners, consultants,
plant suppliers, process engineers and
researchers. Policy makers, planners and con-
sultants need the cost data for conducting
feasibility studies for the selection of appro-
priate technologies, process engineers to
optimize the process configuration and
equipment sizing for minimizing the cost of
production and researchers for developing
new technologies and improving the existing
ones.
The aim of the present paper is to give an
overview of the trends in desalination costs,
costing methodologies for different desalina-
tion technologies, with emphasis on Multi
Stage Flash (MSF), Multi Effect Distillation
(MED) and Reverse Osmosis (RO), which are
the major desalination technologies that are
used for seawater desalination.
2. Trends in desalination costs
The earliest interest in desalination was to
produce fresh water for boiler and for drink-
ing purpose on ships. Vapor compression
units were first used in naval vessels powered
by diesel engines in 1940. The MSF process
was invented in 1950 by Silver. Reverse
Osmosis phenomenon was discovered in
18th century but the breakthrough occurred
in 1950 with the invention of cellulose acetate
membranes. The Electrodialysis membrane
was discovered in 1950. The MED technology
was adopted for desalination in 1900 which
has been in extensive use in the chemical
industry.
By the Second World War, hundreds of
mobile MED and vapor compression desali-
nation units were in use. But the cost of
desalinated water was US$0.5 per m3 for the
342 K.V. Reddy, N. Ghaffour / Desalination 205 (2007) 340–353
prevailing low fuel prices of 10–20 US$/ton.
It was considered very high at that time. The
Office of Saline Water was established in
1952 with initial funding of US$2 million,
which was later increased to US$160 million
for desalination research. Since then, tremen-
dous interest was shown by both government
and private sectors in desalination research,
which led to the introduction of ED techno-
logy in 1952, freezing desalination and RO in
1954. A MSF unit of 0.05 MGD for seawater
desalination was demonstrated for the US
Navy in 1954. The first commercial MSF
unit of 0.5 MGD was built at Shuwaikh in
Kuwait later in 1957.
Since 1960, MSF process became highly
popular and many commercial plants were
built worldwide using this technology during
the last four decades, particularly in the
Arabian Gulf. During this period, many
national programs were initiated to study and
evaluate the use of nuclear energy in desalina-
tion by Office of Saline Water, International
Atomic Energy Agency and Oak Ridge
National Laboratory. ED was modified to
current Electrodialysis Reversal (EDR) and
accepted as a commercial process during this
period. In 1966 a spiral wound RO process of
0.05 MGD capacity was demonstrated.
By the 1970s, improved MSF, MED, VC,
ED and RO were available for commercial
production and many desalination plants
were built worldwide using these technolo-
gies. The total desalination capacity by all
processes contracted till 2005 is 53.69 million
m3/day. The contracted capacity was low,
with a meager 110,000 m3/day, in the first
Table 1
Contracted capacity of all desalination plants world-wide
Duration 1950–59
3
Contracted Capacity (Million m /day) 0.11
ten years from 1950. But it picked up gradu-
ally and increased exponentially with more
than 50% during 2000–2005. The contracted
capacity figures from 1950 to 2005 are given
in Table 1 [1].
The cost of desalinated water produced by
these technologies in 1970 was high and var-
ious organizations continued their efforts to
reduce the desalination cost. Considerable
decrease in the desalination costs of these
technologies took place in the last four dec-
ades and, presently, desalinated water cost
reached about US$0.5 per m3. These low
costs are contributing to narrow the gap
between conventional water supplies and desa-
linated water even for the non-water stressed
countries. The unit water cost comparisons
were made by Sommariva as in Fig. 1 [2]. In
many countries in the Middle East, identified
as geographical area A in the figure, price con-
cepts are not applicable, as natural resources
are so limited that life and industry would not
be sustainable without desalination. Geogra-
phical areas B and C are for regions that over
exploit the natural resources and regions with
abundant natural resources respectively.
2.1. Multi stage flash
Even though MSF is thermodynamically
inefficient, large numbers of plants were
installed world over, in particular in the Ara-
bian Gulf countries, because of its reliability.
Since MSF is mostly used for desalination of
seawater, the data for seawater desalination is
only considered. The total contracted capa-
city of all MSF plants worldwide till 2005 is
1960–69 1970–79 1980–89 1990–99 2000–05 Total
0.89 5.12 8.04 12.56 26.97 53.69
 K.V. Reddy, N. Ghaffour / Desalination 205 (2007) 340–353 343

Water value area A

1.6 no cost criteria applicable

Water cost/value (US$/M3)

1.4 Water cost from desalination
1.2
1
Breakeven points
0.8
Water cost from re-use
0.6
0.4 Water value area B
0.2 Water value area C
0
1994 1996 1998 2000 2002 2004
Year

Fig. 1. Trends in desalination and conventional water costs. [2]

17 million m3/day with about 32% of the total reduction of cost of desalination, particularly
desalination capacity. The contracted capa- in the investment cost. Operating costs also
city of MSF desalination plants is given in decreased to some extent due to improve-
Table 2 [1]. ments in the process performance. The actual
The first MSF plant was contracted in investment costs of some of the MSF installa-
1957 and the contracted capacity 1957–59 tions world over in the last four decades as
was only 27,000 m3/day. In the next decade, provided by Wangnick [1], are plotted by the
1960–69, it was only 694,000 m3/day. But it authors in Fig. 2. It is clear from this figure,
increased considerably to about 20% of the that the data is very much scattered and
total contracted capacity during 1970–79 and mostly clustered around investment cost of
about the same percentage increase continued 1000–2000 US$/m3/day up to 1990 and
till 1999. The growth was steep in the last five around 1000–1500 US$/m3/day after 1995.
years with a contracted capacity of 6.396 mil- This indicates that in spite of inflation, the
lion m3/day. investment cost reduced marginally over a
The cost of water produced by MSF was period of time.
high in 1960 but many improvements took Zhou and Tol [3] calculated the annual
place later in the process design. Though the amortized capital costs with annual discount
basic concept of the process has not changed rate of 8% and a plant life of 25 years using
till today, the top brine temperature was the investment cost data reported in
gradually increased to 112  C with the Wangnick Report 17. Since operating costs
availability of better anti-scalants and newer are not included in the Wangnick data, they
materials of construction. This led to the assumed that the total cost comprises 40%

Table 2
Contracted capacity of all MSF desalination plants world-wide

Duration 1950–59 1960–69 1970–79 1980–89 1990–99 2000–05 Total

Contracted Capacity (Million m3/day) 0.027 0.694 3.213 3.546 3.124 6.396 17.00
344 K.V. Reddy, N. Ghaffour / Desalination 205 (2007) 340–353

4000

3500

US$ per cubic meter per day

3000

2500

2000

1500

1000

500

0
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Year

Fig. 2. Investment cost of MSF per m3/day capacity over years.

capital cost for interest and depreciation on cost increase by more than 100%. The main
the investment and 60% for running costs. factors for such reduction are the following:
The load factor was assumed as 90%. They
adjusted all Wangnick reported costs accord-  Severe competition among MSF plant con-
ing to the United States Consumer Price tractors and from RO plant suppliers
Index with 1995 as base year. The unit forced the contractors to propose improve-
water costs thus calculated are plotted by ments/deviations to the technical specifica-
them in Fig. 3. tions of MSF plants and implementation
It is clear from Fig. 3 that over 40 years of such suggestions led to the reduction in
the unit water costs of MSF decreased by a the installation costs. The other contribu-
factor of 10. The main contributor for such tor is engaging subcontractors from Far
reduction is due to about 50% reduction in Eastern countries who had developed tech-
the installation costs despite the increased nical skills, instead of engaging subcontrac-
cost of raw materials by 40% and the labor tors on a regional/national basis.

12.0

9.0
Unit cost ($/m3)

6.0

3.0

0.0
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Year

Fig. 3. Unit water cost by MSF process over years. [3]

 K.V. Reddy, N. Ghaffour / Desalination 205 (2007) 340–353
 The feedback from earlier projects helped
in improving the process and equipment
design of the MSF process. These
improvements are specifically related to
the increase in unit capacity of MSF
plants over the years, 2–3 MGD in 1960–
70, 2–5 in 1971–80, 3–7.5 in 1981–90,
3.5–12 in 1991–00 and 7–20 after 2000.
The use of Duplex steel instead of AISI
316, 316L and 316Ti reduced the cost.
Duplex steel is cheap, has better mechan-
ical properties and higher corrosion resis-
tance than AISI 316, 316L and 316Ti,
which were being used earlier. The use of
thinnest titanium tubes in place of well-
known copper nickel alloy for heat trans-
fer tubes also contributed to the reduction
in the investment cost.
 The relaxation of stringent specifications
by users with respect to fouling factors,
distiller hydraulic test pressures, distillate
purity, brine load, construction material
specifications, heat exchange tube thick-
ness, bypass on control valves, removable
water boxes and redundancy of equip-
ment and instrumentation helped the con-
tractor to arrive at appropriate options
which led to the reduction in the invest-
ment cost.
 The BOOT contract specifications, which
changed from technical to functional, has
allowed the contractor to further optimize
the plant and helped in reducing the cost.
 Increased top brine temperature from 90
to 112  C over the last 10 years helped in
improving the performance of the MSF
plant and also contributed to the reduc-
tion of unit water cost.
The above improvements helped in redu-
cing the unit water cost produced by MSF to
less than US$1.0 per m3. Unit water cost
depends on the investment cost and operating
cost. The investment cost of MSF plants is
345
about US$900 per m3/day capacity based on
the average value of the contracted plant in
the Middle East in the last years [4]. The
share of operation cost in the unit water
cost will be 55–60% depending on the cost
of capital, plant life assumed and on energy
cost.
Recently Borsani and Rebagliati [4] esti-
mated the unit water cost at US$0.52 per m3
for MSF for Middle East conditions. This
unit water cost may be on the lower side.
Their costs are compared with Wade [5] in
Table 3. The total cost according to Wade is
1.044 US$/m3. Presently, the unit water cost
could be between these two values, but may
be closer to that given by Wade. The compo-
nents of operating costs and their contribu-
tions are compared in Table 4. It is
interesting to note that they are considerably
different. The cost of chemicals reported by
Sommariva [2] is on the high side. Similarly,
the cost of personnel and spares reported by
Borsani and Rebagliati [4] are on the low
side.
2.2. Multi effect distillation
Multi effect distillation is thermo-dynami-
cally a more efficient process compared to
MSF. The performance ratio is directly pro-
portional to the number of effects unlike for
the MSF. But it has some scaling problems
compared to MSF.
Small capacity MED plants were built
since 1900 in ships. But the first land-based
MED desalination plant was built in 1930 in
Saudi Arabia. The total contracted capacity
of MED without vapor compression by the
end of 2005 was only 1.175 million m3/day,
which is much less than that of MSF. The
contracted capacities in each decade from
1950 to 2005 are given in Table 5 [1]. The
contracted capacity was roughly constant
around 20% after 1970. Most of the MED
346 K.V. Reddy, N. Ghaffour / Desalination 205 (2007) 340–353

Table 3 plants are small or medium size unit capacity.

Typical unit water cost comparison The largest MED unit capacity is only 5
MGD compared to 17 MGD of MSF.
Desalination Wade Borsani There are two types of commercial vapor
and compression desalination plants: thermal
Rebagliati
vapor compression and mechanical vapor
Production capacity (m3/day) 31,822 205,000 compression. MED technology is used in
Number of units/trains 1 3 vapor compression plants, particularly in
Performance ratio 8.0 8.5 thermal vapor compression. Since MED
Top brine temperature 112
Number of stages 19 with mechanical vapor compression has not
Heat consumption, MJ/m3 290 much effect on the specific power consump-
Power consumption, kWh/m3 3.6 tion, only single effect is generally used. On
Load factor, % 90 the other hand, MED with thermal vapor
Energy cost, US$/GJ 1.5 compression decreases the specific energy
Power cost, US$/kWh 0.03 0.03
consumption and most of the recent MED
Plant life, years 25 20
Discount rate, % 8 7 plants are coupled with thermal vapor com-
Amortization, % 9.37 10.59 pression. The contracted total capacities of
Capital cost, US$ in million mechanical and thermal vapor compression
Distillers installed 34.5 plants are 504,358 and 1,455,433 m3/day
Seawater intake and out fall 2.8 respectively.
Foundations and building 5.6
Financing during construction 4.3 It was attempted to plot the actual invest-
Engineering and consultancy 4.3 ment cost data given by Wangnick for MED
Total capital cost 51.4 180 plants against contracted year as was done in
Operating Cost in US$/m3 the MSF case. But it was not possible to get
Heat energy 0.242 0.136 any trend correlation due to the limited data
Electrical energy 0.109 0.119
and different plant sizes and specifications.
Operation and maintenance 0.126
Spares 0.082 However, from the data reported in the lit-
Chemicals 0.024 0.032 erature, the cost reduction trend over years is
Sub-total operating cost 0.583 0.287 similar to MSF with improvements in similar
Capital charges in US$/m3 0.461 0.233 parameters as discussed below.
(Total capital cost/ Most of the MED plants built till 1970
production capacity)
Total in US$/m3 1.044 0.52 were for brackish or river water desalination

Table 4
Comparison of operating cost contributions

Component % contribution

Borsani and Rebagliati Wade Sommariva

Thermal Energy 46 42 38
Electrical Energy 40 19 14
Chemicals 9 4 30
Personnel & Spare parts 5 35 18
 K.V. Reddy, N. Ghaffour / Desalination 205 (2007) 340–353
Table 5
Contracted capacity of all MED desalination plants worldwide
Duration 1950–59 1960–69
Contracted Capacity (Million m3/day) 0.083 0.108
and they used submerged tubes with unit
capacities of 1 MGD or less due to scaling
problems with seawater desalination. Heat
transfer coefficients were low in submerged
tube evaporators and hence vertical and hor-
izontal tube falling film evaporators were
introduced to improve the heat transfer coef-
ficient. Higher heat transfer coefficients in the
falling film allowed in reducing the top brine
temperature to less than 70  C, which helped
in reducing the scaling problems. The first
large capacity MED plant for seawater desa-
lination with 3.5 MGD capacity and vertical
tube evaporator was built in Kazakhstan in
1964 and similar plants were built later in
1966, 1967, 1968 and 1970 in the same coun-
try. Since horizontal tube falling film eva-
porators have higher heat transfer
coefficients compared to vertical tube eva-
porators for large scale applications, they
became popular in the industry. Horizontal
tube falling film MED of 0.1 MGD for sea-
water desalination was first built in Belgium
in 1970.
Large scale MED of 4.5 MGD with hor-
izontal tube evaporator was built in Israel at
Ashdod in 1980. In the last ten years, many
developments took place in MED with respect
to coupling of thermal vapor compression
with MED, use of improved horizontal tube
falling film evaporation, stabilization of low
temperature operation, use of aluminum for
heat transfer tubes resulting in realization of
modern MED plants and reduction of unit
water costs. Modern MED plants are reliable,
matured and have better performance than
MSF even for the harsh Gulf water
347
1970–79 1980–89 1990–99 2000–05 Total
0.292 0.242 0.239 0.207 1.175
conditions. This led to the construction of 2
MED units of 5 MGD unit capacity in 1999 at
Layyah in Sharjah. They have also opened the
way for its application for large BOT projects
in the Gulf Region, as e.g. Taweelah A1 where
its high reliability is fully manifested. Many
large-scale MED plants of 6 MGD with ther-
mal vapor compression were built in UAE at
Ajman in 2003, at Al-Nakheel in 2003 and at
Ras Al-Khaimah in 2003. An excellent review
of the performance of some of the operating
MED plants is reported by Al-Shammiri and
Safari [6].
Increase in unit capacity, increase in heat
transfer coefficients with horizontal tube eva-
porators and use of appropriate materials for
low temperature operation have considerably
reduced the unit cost of desalinated water
using MED. The unit water cost of MED
was always lower than MSF after the intro-
duction of falling film evaporation and this
further decreased after the integration with
thermal vapor compression, or heat pump.
The unit water cost of the recent MED
plants is 0.55–0.7, which is less than for
MSF and very close to RO. The capital cost
is about US$850 per m3/day capacity and
energy consumption is less than MSF.
2.3. Reverse osmosis
The RO desalination was commercialized
much later than MSF and MED. The first
commercial brackish water RO plant with
spiral wound membrane was contracted to
build at Kashima in Japan in 1969 to cater
to the water needs of a power plant. After 6
348 K.V. Reddy, N. Ghaffour / Desalination 205 (2007) 340–353

years in 1975, a seawater RO plant of plotted by authors against contracted year.

1500 m3/day capacity was contracted to The investment cost data is more scattered
build at Al-Kharj in Saudi Arabia. The total before 1995. After 1995, it is more clustered
contracted capacity of RO plants by the end between 500 and 1000 US$ per m3/day capa-
of 2005 reached 23.36 million cubic meters city. This indicates that the investment costs
per day, which is the highest capacity com- decreased in the last ten years. With the same
pared to any other process. But the seawater assumptions as were made in MSF for calcu-
desalination share is only 9.611 million cubic lating unit water cost, Zhou and Tol [3] cal-
meters per day. The contracted total capacity culated the unit water cost for RO and
and contracted seawater desalination capacity plotted them in Fig. 5. The unit water cost
from 1950 to 2005 are given in Table 6 [1]. decreased considerably over the years and at
It is clear from the values given in Table 6 about 0.5 US$/m3, it is presently lowest of all
that the total and seawater RO capacity have the processes.
grown fast in the last 30 years and it has There are many developments over the last
exponentially increased for both total and three decades that contributed to the reduc-
seawater RO capacity in the last five years tion of unit water cost of RO desalination,
with 50% growth in the total capacity and particularly membrane module performance
70% in seawater RO capacity. and reduction in energy consumption. The
In Fig. 4, actual investment cost of sea- performance of the membrane modules
water RO plants given by Wangnick is improved with respect to increased salt rejec-

Table 6
Contracted capacity of RO desalination plants worldwide

Duration 1950–59 1960–69 1970–79 1980–89 1990–99 2000–05 Total

Contracted Capacity Total – 0.016 1.241 3.168 7.227 11.713 23.365

Million m3/day Seawater – – 0.48 0.577 2.162 6.824 9.611
US$ per cubic meter per day capacity

4000

3500

3000

2500

2000

1500

1000

500

0
1975 1980 1985 1990 1995 2000 2005 2010
Year

Fig. 4. Investment cost of seawater RO plant per m3/day capacity over years.
 K.V. Reddy, N. Ghaffour / Desalination 205 (2007) 340–353
6.0
5.0
Unit cost ($/m3)
4.0
3.0
2.0
1.0
0.0
1965
Fig. 5. Unit water cost by RO over years. [3]
tion, increased surface area per unit volume,
increased flux, improved membrane life,
capacity to work at high pressure and also
decrease in membrane cost. The recovery
ratio increased considerably over the years
due to improved salt rejection. The recovery
ratio for seawater desalination was about
25% in 1980s and it increased to 35% in
1990s. Currently it is about 45% and it will
be more if 2nd stage is included. Improved
recovery facilitated a decrease in the invest-
ment cost and also operating costs. The capi-
tal cost reduction is due to a reduction in RO
trains and intake system sizes. The operating
cost reduction is due to a reduction in usage
of chemicals and pumping energy.
The surface areas per unit volume
increased considerably with the introduction
of hollow fine fiber modules and spiral
wound modules. The increase in surface area
per unit volume and increase in flux contrib-
uted to the reduction of investment cost.
Improved membrane life and capacity to
work at high pressure also helped in reducing
the operating cost.
The membrane costs should increase due
to inflation over a period of time. But they
have fallen down by 86% between 1990 and
349
BRACK
RIVER
SEA
PURE
WASTE
1970 1975 1980 1985 1990 1995 2000 2005
Year
2005, which contributed considerably for unit
water cost reduction.
Recently the specific energy consumption
has been considerably decreased with the
introduction of better energy recovery system
from reject brine such ERI (Energy Recovery
Inc.) or DWEER (Dual Work Exchanger
Energy Recovery). The developments in var-
ious parameters of RO as desalination pre-
sented by Sommariva [2] are given in Fig. 6.
Apart from improvements in RO technol-
ogy, increase in plant capacity also contribu-
ted to the reduction in unit water cost. The
magnitude of the respective costs due to
improvements in the membranes and increase
in plant capacity are difficult to measure since
they have both taken place simultaneously.
The plant capacity increased by a factor of
10 between 1995 and 2005.
As in the case of thermal desalination,
competition among the plant suppliers, sub-
contractors, membrane suppliers also contrib-
uted to the reduction in unit water cost.
The investment cost of recent seawater RO
desalination plants is about US$800 per m3/
day capacity. In order to have a better idea of
the latest cost figures, the data reported by
Dreizin [7] for Ashkelon seawater RO
350 K.V. Reddy, N. Ghaffour / Desalination 205 (2007) 340–353

10.00
Cost
9.00 Productivity
Recip.SP
8.00 Life
Energy
Unit Improvements 7.00

6.00

5.00

4.00

3.00

2.00

1.00

0.00
1980 1985 1990 1995 2005 2010
Year

Fig. 6. Membrane improvements over years. [2]

desalination plant and calculated by Borsani 1970s there were other desalination technolo-
and Rebagliati [4] for Arabian Gulf condi- gies in the market and there was a need for
tions are given in Table 7. better evaluation process for their merits
based on the cost analysis. However, only
3. Review of desalination costing methodologies investment cost and performance were used
for comparison and evaluation. Recognizing
In the 1960s only MSF was available for the importance of various factors at play, in
commercial application and the bidding pro- 1972 Office of Saline Water issued a Desalt-
cess would normally call for an investment ing Handbook For Planners that included a
cost proposal with performance data. In the chapter on factors influencing the process
selection and water cost, including a format
Table 7
for calculating capital cost and total cost of
The average total water price of Ashkelon RO plant
water. Larson and Leitner prepared an
US$/m3 updated report for the Office of Water
Research and Technology in 1979, which con-
Cost Item Ashkelon Borsani and
Rebagliati tained comparison of MSF, MED and RO in
a standard format. This report was updated
Base fixed price 0.311 0.22 again in 1982 and it received favorable
Base variable price reviews. But even in 1981 these standard for-
Energy 0.134 0.148
Membranes 0.28 mats were not used for evaluating project
Filters 0.005 bids and total cost of water was not an
Chemical 0.21 0.078 important criterion.
Post treatment 0.009 A workshop on production cost of water
Others 0.17 was held in 1989 in Bahrain, which generated
Sub total 0.214
interest for a computer software program
Base total water price 0.525 0.446
that included a tool for preliminary
 K.V. Reddy, N. Ghaffour / Desalination 205 (2007) 340–353
engineering design to each process along with
the evaluation method for calculating the
capital and total cost based on the latest
standards. In 1991, Leitner and Associates
in cooperation with International Desalina-
tion Association developed two software
packages for this purpose; one for seawater
desalination and other one for brackish water
desalination.
The seawater desalting costs program of
Leitner calculates design parameters like
heat transfer surface area required for MSF,
MED and TC/MED and number of mem-
branes modules for seawater RO and also
calculates operation performance data like
required power, steam and chemicals. These
calculations are simple and are devoid of any
rigorous methods. The program evaluates the
capital and the total cost of desalinated
water. The Brackish water desalting costs
program also performs similar calculations
for RO and ED using the input data for
brackish water desalination.
International Atomic Energy Agency
(IAEA) issued in 1989 a software program
called ‘‘Desalination Economic Evaluation
Program’’ Version 1 called DEEP 1.0, which
is useful for preliminary economic evaluation
for different combinations of various energy
sources of fossil and nuclear power plants
with different desalination processes [8]. It
contains desalination models for MSF,
MED, RO and possible hybrid combinations.
It includes power models for five nuclear
reactors, three nuclear steam power plants,
super heated steam boilers for coal, oil or
gas; an open cycle gas turbine; a combined
cycle gas turbine; a diesel, used as a power-
only plant and a boiler (steam or hot water),
used as a heat-only plant. Steam extraction/
condensing turbine models are assumed both
for nuclear and fossil energy options. This
package is continuously updated and Version
2.2 is in the market. Work is in progress for
351
releasing Version 3. The developments in new
versions include advanced gas turbine designs
and a new generation of nuclear power plants
of the small and medium type. The desalina-
tion technology developments include
improved thermal designs, increased energy
efficiency and a new generation of high-per-
formance membranes. The new version also
includes a lost shaft work calculation for
steam extraction configurations in a form
similar to the one used for backpressure sys-
tems. Available performance correlations and
cost data will also be included to reflect new
developments in technology.
DEEP is a spreadsheet tool that enables
side-by-side comparison of a large number of
design alternatives, which help in identifying
the lowest cost options for water and/or
power production at a specific location. It
calculates process performance and costs
based on a combination of user defined and
built-in input data. The main components of
the DEEP program are input data, perfor-
mance calculations of the energy source and
the desalination plant, cost calculation, eco-
nomic evaluation and output results.
The MSF and MED process performance
is based on estimating the gain/output ratio,
which is a function of the available tempera-
ture range and the number of stages.
Whereas, the performance of RO is based
on the recovery ratio, salt rejection and
permeate flux depend primarily on membrane
characteristics and feed properties, mainly
salinity, temperature and pressure. The feed
flows and energy requirements are then deter-
mined based on calculated gain/output ratio
or recovery ratio. Based on the required
water production capacity, an estimate of
the number of thermal or membrane units
of pre-defined capacities is obtained. Distilla-
tion energy costs are estimated based on lost
shaft work. For RO systems, energy costs are
represented by electricity consumption and
352 K.V. Reddy, N. Ghaffour / Desalination 205 (2007) 340–353
pumping power costs are estimated accord-
ingly. A total cost estimate is then calculated,
which includes investment costs, energy costs
as well as operation and maintenance costs.
Another well known computer software
program, WTCost, was developed by
the US Bureau of Reclamation and I. Moch
& Associates for evaluation and comparison
of water treatment processes that employ
reverse osmosis/nanofiltration, electro-dialy-
sis, microfiltration/ultrafiltration, and ion
exchange [9]. This project was sponsored by
the American Membrane Technology Asso-
ciation. It uses flexible cost indexes and
adjustable inputs and includes cost equations
for estimating different pre and post-treat-
ment unit operations such as media filtration;
coagulation and flocculation with powdered
activated carbon, alum, ferric chloride, fer-
rous sulfate, or polyelectrolyte; disinfection
by chlorine, monochloramine, ozone, and
ultraviolet light; lime/soda softening; electri-
cal operations including energy recovery; and
chemical consumptions and intake and out-
fall infrastructures. A number of default
water compositions are included. Labor and
supervision, membrane replacements, amorti-
zation rates, and tanks, piping, and instru-
mentation are also included, which permits
calculation of plant capital requirements and
operating and maintenance costs.
4. Conclusions
It is clear from the costing data presented
for various desalination processes in the pre-
vious sections and from other sources in the
literature that the selection of costing para-
meters, costing procedures and costs figures
are not consistent. However, it is true that the
cost of desalination has considerably
decreased over the last three decades and
desalination technologies, particularly RO,
may compete soon with conventional water
supplies for potable purposes even in the non-
water stressed regions. The cost reduction has
a good correlation with increase in desalina-
tion capacity and growth rate in the last four
decades. This has been discussed in the paper
in detail.
The total desalinated water cost comprises
capital and operating costs and they are spe-
cific to location, feed water components and
composition, energy cost, other cost para-
meters and the method selected for costing.
The cost figures reported in different sources
thus vary considerably. The parameters that
contributed to the reduction in cost are dis-
cussed in clear detail in this paper rather than
just providing large data of costs reported.
Therefore, each component cost and total
water cost serve the purpose of knowing the
range rather than the absolute values. This
situation demands the necessity to identify
and specify the parameters that will contri-
bute to the desalination cost and develop
procedures for the estimation of desalinated
water cost of any plant.
There are many methods and software
packages reported in the literature for costing
desalinated water. They are either, methods
and software packages of private organiza-
tions such as consultants and plant suppliers
or publicly available methods and software
packages.
The parameters that are considered and
the methodology adopted in private software
packages are proprietary. There are some
software packages developed by membrane
suppliers, which are publicly available for
use but details are not available, whereas
the details of publicly available software
packages discussed in the previous section
are in the open domain. The accuracy of the
costs estimated by these packages will be in
the range 30% according to the American
Association of Cost Engineers. Furthermore,
these packages do not consider all the
 K.V. Reddy, N. Ghaffour / Desalination 205 (2007) 340–353
equipment and site parameters. For example,
for MSF plant steam requirement in the Leit-
ner methodology considers heat transfer coef-
ficients whereas the DEEP consider the Gain
Output Ratio. WTCost package is more
rigorous than Leitner and DEEP software
packages but it includes only membrane pro-
cesses, but not thermal. Presently, they are
working to include thermal processes in
WTCost package. These packages are nor-
mally applied only for feasibility studies but
not for project budgeting. Even for the feasi-
bility studies, the accuracy of the costs esti-
mated by these packages is not sufficient.
Inclusion of thermoeconomics in the costing
packages may improve the accuracy of the
results. These packages should also account
for the reliability and long term operating
costs, and means to project reliable forecasts,
leading to lower total cost of water to cater to
the needs of latest BOO or BOOT contracts.
Realizing the importance of desalination
costing, Middle East Desalination Research
Center organized an international conference
on desalination costing in December 2004 in
Cyprus with the aim of formulating generally
accepted procedures for costing with the hope
that, in the end, a standard procedure would
possibly emerge that would be globally
approved. However, due to the vastness of
the endeavor the conference only allowed lim-
ited review of desalination technologies, exist-
ing cost models, desalination project
boundary conditions, planning issues and
case studies. The Center has further plans
353
for standardizing procedures for desalinated
water costing and for producing a costing
software package that could be made avail-
able to the desalination community.
References
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Inventory Report No. 18, International Desali-
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[2] C. Sommariva, Desalination Management and
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[4] R. Borsani and S. Rebagliati, Fundamentals and
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