Forecasting the economic costs of desalination technology

Government policy, in the form of grants and contracts for desalination technology, has had a major impact on steadily declining costs of desalination. The process, reverse osmosis (RO), exhibits economies of scale, which increases its feasibility as a water treatment technology for large populations. Ultrafiltration, an RO pre-treatment, also shows economies of scale. The real economic costs of desalination technology can be forecast using an ARIMA model. If these costs fall below those of conventional water treatment processes, RO and ultrafiltration become competitive with conventional water treatment technology. Our ARIMA forecasts are validated by using independent plant level cost data.