International Training Program 1-4 February 2011 Lordos Beach Hotel Larnaca, Cyprus Day 2: Reverse Osmosis Desalination Systems – Design & Costs 15:30-16:30 Desalination Costs Nikolay Voutchkov, PE, BCEE Water Globe Consulting Desalination Project Costs Key Components and Factors Construction Costs O&M Costs Total Cost of Water Production Methods to Minimize Costs Desalination Cost Components Capital Costs: Operation & Maintenance Costs: Construction (Direct or “Hard”) Capital Costs; Indirect (“Soft”) Capital Costs. Variable; Fixed. Cost of Water: Annualized Capital Costs; O&M Costs. Seawater Desalination Plant – Construction Costs Pretreatment – 15% to 20 % of Construction costs RO System – 40 % to 60 % of Construction Costs Discharge – 5 to 15 % of Construction Costs Intake – 5 to 20 % of Construction Costs Indirect (Soft) Costs – 15 to 50 % of Total Capital Costs Cost Item % of Total Capital Costs Project Engineering 5.0 – 12.5 % Project Development 2.0 – 10.0 % Project Financing 3.0 – 17.5 % Contingency 5.0 – 10.0 % Total 15 – 50 % Indirect Capital Cost Comparison Conventional Water Treatment Plant: Indirect Costs - 15 to 25 % of Capital Costs; Seawater Desalination Plant: Indirect Costs - 15 to 50 % of Capital Costs. Where Does the Difference Comes from? – Cost of Project Related Risks (Intake and Source Water Quality; Permitting; Technology; Reliability, etc.). This Difference Helps Understand Why Majority of the Large SRWO Projects Worldwide are Mainly Completed Under BOOT Delivery! Intake Construction Costs – Key Factors Very Dependent on Source Water Quality Usually Between US$50 and 100/m³/day Beach Well Intakes Usually Less Costly Horizontal and Slant Wells Comparable to Open Intakes Infiltration Galleries Often are More Expensive than Open Intakes Open Intakes Construction Costs Well Intakes Construction Costs Pretreatment Construction Costs Very Dependent on Source Water Quality & Type of Treatment Technologies Usually Between US$100 and 300/m³/day High Quality Well Water Sources Require Only Cartridge Filtration (Low Cost Pretreatment) Single-stage Granular Media Filtration Usually is Less Costly than Membrane Pretreatment Seawater Pretreatment Construction Costs SWRO Plant BWRO Plants w/ Sallow & Deep Wells SWRO System Construction Costs Dependent on Source Water Quality & Target Product Water Quality Usually Between US$300 and 1,000/m³/day Single-stage/Single Pass SWRO System is Least Costly Additional Costs for Two-Pass/Two-Stage RO System May Vary Between 15 and 30 % of the These of Single Pass/Single Stage SWRO System Costs of Key RO System Components Component 8-inch SWRO Membrane Element 8-inch SWRO Pressure Vessel RO Train Piping Construction Cost (US$/item) US$450 –US$600/element US$4,000 - US$6,000/vessel US$200,000 – US$600,000 /RO Train RO Train Support Frame US$150,000-US$400,000/RO Train RO Train Instrumentation & Controls US$20,000 – US$90,000/RO Train High Pressure Pumps US$150,000 – US$800,000/RO Train Post-treatment Construction Costs Dependent on Target Water Quality: Hardness Alkalinity pH Need for Addition of Corrosion Inhibitors Type of Disinfection Need for Addition of Fluoride & Magnesium in the Drinking Water Usually Between US$20 and 50/m³/day Post-treatment Construction Costs Concentrate Disposal Construction Costs Disposal Method New Outfall w/Diffusers Construction Cost (US$ Million/ML/d) 0.50 – 1.50 Power Plant Outfall 0.05 – 0.15 Sanitary Sewer 0.03 – 0.10 WWTP Outfall 0.08 – 0.45 Deep Well Injection 0.65 – 1.65 Evaporation Ponds 0.75 – 2.50 Zero-Liquid Discharge 3.50 – 7.50 Key Capital Cost Components – 40,000 m3/day Plant w/ Low-Cost Intake & Outfall Cost Item Cost (US$) % of Total Intake 2.76 MM 4.8 % Pretreatment 4.64 MM 8.0 % RO System Equipment 18.56 MM 32.0 % Post Treatment 1.16 MM 2.0 % Concentrate Disposal 1.45 MM 2.5 % Buildings 1.74 MM 3.0 % Waste and Solids Handling 0.87 MM 1.5 % Electrical & Instrumentation 1.30 MM 2.2 % Other Items 2.90 MM 5.0 % Total Construction (Direct) Costs 35.38 MM 61 % Engineering Services 5.80 MM 10.0% Development, Financing & Contingency 16.82 MM 29 % $58.0 MM 100 % TOTAL Capital Costs and Plant Size Annual O&M Cost Breakdown Cost Item Range (% of Total O&M Costs) Variable O&M Costs 50.5 – 85.0% Fixed O&M Costs 15.0 – 49.5% Total 100 % Variable O&M Costs Cost Item (% of Total O&M Costs) 35.0 – 58.0 % Power Chemicals 5.5 – 9.0 % Membranes & Cartridges 6.5 – 11.0 % Waste Stream Disposal 3.5 – 7.0 % Total 50.5 – 85 % Fixed O&M Costs Cost Item (% of Total O&M Costs) Labor 4.0 – 11.0 % Maintenance Environmental & Performance Monitoring 3.0 – 13.0 % Indirect O&M Costs Total 7.0 – 20.5 % 15.0 – 49.5 % 1.0 – 5.0 % Indirect O&M Costs – 7 to 20.5 % of Total Costs Administrative Costs; Operations Insurance; O&M Reserve Funds Required by Investor (Project Risks); Contingency; Staff Training and Professional Development; Operator Fees. O&M Costs & Cost of Water 40,000 m3/day Plant w/ Low-Cost Intake & Outfall Cost Item Cost (US$/yr) % of Total Energy 3.24 MM/yr 55.5 % Chemicals 0.35 MM/yr 6.0 % Replacement of RO Membranes & Cartridge Filters 0.62 MM/yr 10.6 % Waste Stream Disposal 0.26 MM/yr 4.4 % 4.47 MM/yr 76.5 % Labor 0.33 MM/yr 5.7% Maintenance 0.38 MM/yr 6.5 % Environmental & Performance Monitoring 0.09 MM/yr 1.5 % Other O&M Costs 0.57 MM/yr 9.8 % 1.37 MM/yr 23.5% $5.84 MM/yr 100 % Total Variable Costs Total Fixed Costs TOTAL ANNUAL O&M COSTS Annual O&M Costs = US$5.84 MM/(40,000 m³/dayx365 days) = US$0.40/m³ Cost of Water 40,000 m3/day Plant w/ Low-Cost Intake & Outfall Annual O&M Costs = US$5.84 MM/yr ($0.40/m³) Capital Costs, Cap = US$58 MM Capital Cost Recovery Factor, CRF = [(1+i)ᵐ - 1] / [ix(1+i)ᵐ] Where: m – period of repayment of capital expenditures; i – interest rate of capital For example, for m = 20 years & i = 5% CRF = [(1+0.05)²º - 1] / [0.05 (1+0.05)²º] = 12.462 Annualized Capital Costs = Cap/(CRF x Qp x 365 d) = US$58 MM/(12.462 x 40,000m³/d x 365 d) = $0.32/m³ Cost of Water = $0.40 + $0.32 = $0.72/m³ Cost Comparison of 100 ML/d SWRO Plant with Conventional and Membrane Pretreatment Comparison of O&M costs and Costs of Water Production – 100 ML/d SWRO Plant Conventional Pretreatment Membrane Pretreatment Cost of Water Production Cost of Water of Recent Desalination Projects Costs of Recent US SWRO Projects Project Status Capital Cost (US$) Annual O&M Cost (US$/kgal) Cost of Water (US$/kgal) 0.6 MGD Sand City, CA In Operation since 2010 US$11.9 MM US$1.15/kgal US$2.91/kgal 25 MGD Tampa Bay, FL In Operation since 2008 US$138 MM US$1.54/kgal US$3.48/kgal 50 MGD Carlsbad, CA In Financing US$350 MM US$1.75/kgal US$4.00/kgal 2.5 MGD Santa Cruz, CA In Planning US$59-64 MM US$3.94/kgal US$7.6-8.0/kgal 2.5 MGD Brownsville Demo Project, TX In Planning US$22.5 MM US$2.80/kgal US$4.38/kgal 25 MGD-80 MGD Coquina Coast, FL In Planning US$180 MM US$560 MM US$1.99/kgal US$4.47/kgal (US$5.35-US$6.10 w/ conveyance) Key Factors Affecting Costs Source Water Quality - TDS, Temperature, Solids, Silt and Organics Content. Product Water Quality – TDS, Boron, Bromides, Disinfection Compatibility. Concentrate Disposal Method; Power Supply & Unit Power Costs; Project Risk Profile; Project Delivery Method & Financing; Other Factors: Intake and Discharge System Type; Pretreatment & RO System Design; Plant Capacity Availability Target. Source Water Quality & Costs Water Source (TDS, ppt /Temperature, ºC) Construction Costs O&M Costs Cost of Water 1.00 1.00 1.00 Caribbean (36 ppt /26 ºC) 1.04-1.35 1.02-1.10 1.03-1.22 Mediterranean (38 ppt /24 ºC) 1.06-1.40 1.04-1.15 1.05-1.28 Gulf of Oman/Indian Ocean (40 ppt /30 ºC) 1.15-1.50 1.10-1.25 1.12-1.38 Red Sea (41 ppt /28 ºC) 1.18-1.55 1.12-1.28 1.15-1.42 Arabian Gulf (45 ppt /26 ºC) 1.25-1.60 1.15-1.33 1.20-1.48 Pacific/Atlantic Ocean (33.5 ppt /18 ºC) Product Water Quality & Costs Target WQ Constr. Costs O&M Costs Cost of Water TDS/Cl = 500/250 mg/L; Boron = 1 mg/L. 1.0 1.0 1.0 TDS/Cl = 250/100 mg/L; Boron = 0.75 mg/L. 1.15-1.25 1.05-1.10 1.10-1.18 TDS/Cl = 100/50 mg/L; Boron = 0.5 mg/L. 1.27-1.38 1.18-1.25 1.23-1.32 TDS/Cl = 30/10 mg/L; Boron = 0.3 mg/L. 1.40-1.55 1.32-1.45 1.36-1.50 Key Project Risks and Costs Permitting Risks – Very High for Large Plants; Source Water Risks – High for Most Large Plants; Technology Risks – High, Especially for New Technologies with Limited Track Record; Operational Risks – High – Experienced Operator Needed; Desalinated Water Demand Risks – High When Cost of Desalinated Water Significantly Higher than That of Existing Supplies; Power Supply & Entitlement Risks – Moderate; Regulatory Risks – Moderate; Construction Risks – High – Limited Experience; Financial Risks – High. Project Financing Alternatives Government Financing: Key Advantage - Lowest Cost for the Final User; Key Disadvantages – Scarce & Limited. Bonds and Construction Loans: Key Advantage – Low Cost Funds (3 to 8 % rate); Key Disadvantages – Limited by the Credit Capacity of the Water Agency & Complex Approval Process. Private Project Finance: Key Advantage – Utility Responsible to Pay for Services & Borrowing Capacity Not Impacted; Key Disadvantages – Usually More Expensive for Small and LowRisk Projects. Project Delivery Alternatives Design-Bid-Build (DBB): Design-Build-Operate (DBO)/”Alliance”: Key Benefit - Utility Owns All Assets; Key Disadvantages – Utility Takes All Risks and Reduces Borrowing Capacity. Key Benefit – Utility Owns All Assets; Key Disadvantages – Utility Shares Some Construction & Operations Risks and Reduces Borrowing Capacity. Build-Own-Operate-Transfer (BOOT): Key Benefit – Utility Transfers Most Risks to Private Sector and Only Pays for Water it Receives; Key Disadvantages – Utility Does Not Own the Assets. Risk Allocation Profiles for BOOT & Alliance (DBO) Project Delivery Type of Project Risk BOOT Alliance/DBO Permitting Private Public Source Water Private Shared Technology Private Shared Operations Private Shared Water Demand Public (Take or Pay – Private Equity at Risk) Public Power Supply Private Public Construction Private Shared Financial Private Public Worldwide the Lowest Cost of Desalinated Seawater Has Been Delivered Under BOO/BOOT Contracts! Largest SWRO Desalination Projects Worldwide Cost of Water (US$/m³) Power Use (kWh/m³) & TDS Ashkelon, Israel – 330 ML/d (Largest in The World) – BOOT 0.53 3.8 (40 ppt) Point Lisas, Trinidad – 130 ML/d (Largest in The Americas) - BOOT 0.72 4.8 (38 ppt) Tuas, Singapore – 136 ML/d (Largest in Asia) - BOOT 0.48 4.3 (33 ppt) Barcelona, Spain – 200 ML/d (Largest in Europe) BD+O 1.16 4.4 (38 ppt) Fujariah, UAE – 170 ML/d (Largest in the Middle East) - BOOT 0.90 4.5 (38.5 ppt) Sydney, Australia – 250 ML/d (Largest in Australia) – DBO (Alliance) 2.29 4.2 (36 ppt) SWRO Plant Year 2004/09 The Five Lowest Cost SWRO Project Bids Worldwide Cost of Water (US$/m³) Power Use (kWh/m³) & TDS Sorek, Israel – 411 ML/d BOO (startup – 2014) 0.53 3.7 (40 ppt) Mactaa, Algeria – 500 ML/d BOOT (startup – 2013) 0.56 3.7 (40 ppt) Hadera, Israel – 330 ML/d BOO/co-located (startup – 2009) 0.60 3.7 (40 ppt) Cap Djinet, Algeria – 100 ML/d BOO (startup – 2010) 0.72 4.0 (38 ppt) Carlsbad, USA – 189 ML/d BOO co-located (startup – 2012) 0.74 2.9 (33.5 ppt) SWRO Plant What All Recent BOOT Projects Have in Common? All Yielded the Lowest Costs and Power Use of Desalinated Water in Their Respective Markets; Plant Performance & Permitting Risks Reside with the Private Sector; Debt Repayment is Private Sector Obligation; Private Sector Only Gets Paid for Delivering Product Desalinated Water; Public Utility Can Buy Out (Transfer) Project Ownership Once Plant Has Proven Its Long-term Performance. Ashkelon – Lowest Cost of Water Worldwide – How Did They Do It? Ashkelon – How Did They Do It? Low Cost Conventional Pretreatment – Single Stage Dual Media Filters; Large Size (20-micron) Cartridge Filters; Three-Center RO Design w/ Pressure Exchangers: Low Cost Post-Treatment – Calcite Filters & Blending; Self-Power Generation – 80 MW Gas Generators and Purchase of Rights to Gas Field Use; Discharge Collocation with Power Plant in Well Mixed Tidally Influenced Zone – No Need for Outfall. Sydney and Huntington Beach Desal Plant Construction Costs Costs Sydney 250 ML/d US$ Desalination Plant 492 Intake and Outfall 230 Delivery 557 Project Costs 260 Total Capital Costs Note: Sydney Costs Source – WDR - July 2007 1,539 Huntington Beach 189 ML/d/(250 ML/d) US$ 310 (410) 16 (21) 110 (146) 61 (81) 497 (658) Perth & Sydney SWRO Plants Cost Breakdowns Perth Sydney 125 <1 26.2 $325 250 4.5 14.3 $1,539 $281 $44 $982 $557 $25 $120 Capacity (ML/d) Distance from intake (km) Distance to delivery (miles) Total Capital Cost ($M) Total Capital Cost – Desal Plant ($M) Total Capital Cost - Delivery ($M) Annualized Capital Cost ($M/yr) Total Annual O&M Costs ($M/yr) Annual O&M Cost – Desal Plant ($M/yr) Annual O&M Cost – Delivery ($M/yr) Cost of Water – Capital Component ($/m3) Cost of Water – O&M Component ($/m3) $17 $16 $46 $42 $1 $0.70 $0.44 $4 $1.65 $0.58 Cost of Water – Delivery Component ($/m3) $0.02 $0.06 Total Water Cost, $/m3 $1.16 $2.29 adapted from Waterlines:NWC Australia Be Careful When Comparing Costs! Projects Differ By: Source Water Salinity and Temperature; Product Water Quality; Unit Cost of Construction, Labor and Permitting; Cost of Capital; Unit Cost of Power; Source of Equipment Supply; Project Completion Schedule. Projects Have to Be Normalized for These and Other Factors for Accurate Comparison. Typical Cost and Energy Ranges (Medium & Large SWRO Plants) Classification Cost of Water Production (US$/kgal) SWRO System Energy Use (US$/kgal) Low-End Bracket 2.0 - 3.0 9.5 – 10.5 Medium Range 3.5 – 5.0 11.0 - 12.0 High-End Bracket 6.5 - 11.5 12.5 – 14.0 4.0 11.5 Average Common Features of Low-Cost Desalination Projects Low Cost HDPE Open Intakes or Beach Wells; Near-Shore/On-Shore Discharges w/o Diffuser Systems or Co-discharge w/ Power Plant of WWTP Outfalls; Point of Product Water Delivery within 5 Miles of Desalination Plant Site; RO System Design w/ Feed of Multiple Trains by Common High Pressure Pumps and Energy Recovery Systems; Turnkey (BOOT, BOO) Method of Project Delivery. Key Reasons for Cost Disparity Between High-End & Low-end Cost Projects (US$2.0 – 3.0 vs. US$6.5-11.5/kgal) Desalination Site Location (NIMBI vs. Science Driven) Costly Plants Have Overly Long Product Water Delivery Pipelines • 120 MGD Melbourne Plant – Cost of Plant/Delivery + Power Supply Systems = US$1.7 BB/1.1 BB (50 miles) • 66 MGD Sydney SWRO Plant – Cost of Plant/Delivery System = US$560 MM/US$490 MM (10 miles of underground tunnel under Botany Bay). Environmental Considerations Phasing Strategy Complex Intakes & Diffuser Systems Intake and Discharge System Capacity; Pretreatment & RO System Design; Labor Market Pressures Method of Project Delivery & Risk Allocation Where Future Cost Savings Will Come From? Main Areas Expected to Yield Cost Savings in the Next 5 Years (20 % Cost Reduction Target) Improvements in Membrane Element Productivity: - Polymetric Membranes (Incorporation of Nano-particles Into Membrane Polymer Matrix) – CSIRO & UCLA; - Larger Membrane RO Elements (16” Diameter or Higher). Increased Membrane Useful Life and Reduced Fouling: - Smoother Membrane Surface – Carbon Nanotube Membranes – CSRO & University of Texas (Austin). - Increased Membrane Material Longevity; - Use of Systems for Continuous RO Membrane Cleaning; - UF/MF Membrane Pretreatment. Commercial Forward Osmosis Systems; Co-Location With Power Plants; Regional Desalination and Concentrate Disposal; Larger RO Trains and Equipment; Full Automation of All Treatment Processes. Nano-Structured SWRO Membranes Potential to Reduce 60 to 80 % of Energy Costs & 15 to 25 % of Cost of Water OASYS Research Directions to Meet the Long-Term 80 % Cost Reduction Goal Improve Membrane Useful Life and Productivity; Develop Corrosion Resistant Non-Metallic Materials to Replace High-Quality/High Cost Stainless Steel RO Piping; Reduce Pretreatment Costs; Develop New-Generation Energy Recovery Systems; Introduce Low-Cost Technologies for Beneficial Concentrate Use and Disposal; Explore New Technologies for Seawater Desalination Different from RO and Thermal Evaporation. Aquaporine-Based Desalination “The Best” of Seawater Desalination Present Status & Future Forecasts Parameter Today Within 5 Years Within 20 Years US$0.6-0.8 US$0.5-0.6 US$0.1-0.2 Construction Cost (Million US$/ML) 1.2-2.4 1.0-2.0 0.5-1.0 Power Use (kWh/m³) 2.8-4.0 2.5-3.5 2.0-2.5 5,000-12,000 8,000-15,000 20,000-40,000 Membrane Useful Life (years) 5-7 7-10 10-15 Plant Recovery Ratio (%) 45-50 50-55 55-65 Cost of Water (US$/m³) Membrane Productivity (gallons/day/membrane) Concluding Remarks The Ocean Will Become One of the Key Sources of Reliable and Draught-Proof Coastal Water Supply in the Next 10 to 20 Years; Large-scale Seawater Desalination is Economical Today and Will Become Even More Cost-Competitive in the Future; The Future of Seawater Desalination Is Bright – 20% Cost of Water Reduction in the Next 5 Years; Long-term Investment In Research and Development Has the Potential to Reduce the Cost of Desalinated Water by 80 % In the Next 20 Years. Seawater Desalination Costs Questions?