The Economics of Desalination and It's Potential Application to Australia

Future concerns about the quality and quantity of Australia’s fresh water supplies from salinisation has necessitated the need for action. Several options exist to secure fresh water supplies for the future, including revegetation, engineering methods, and desalination. Revegetation and engineering options can be very expensive when applied on the scale needed. Desalination has considerable potential as it gives immediate benefits and can be applied anywhere saline water exists, subject to it being suitably cost-effective. This paper shows that, in Australia, based on current prices charged for water, desalination is currently only competitive with traditional water sources in remote locations. There are two ways that this might change. There may be a continuation of advances in technology for desalination, or alternatively the true cost of traditional fresh water sources may rise. Even if the former does not occur, the latter appears certain