Pricing Mechanism for Centralised Reused Water System with Multiple Water Headers

Abstract

Reasonable water pricing is essential for long-term sustainability and financing. The selling prices of reused/regenerated water should enable the generation of revenue that could cover the production costs. In this work, reused/regenerated water prices at different qualities are determined based on the total annualised cost of the centralised system with and without subsidy, quality factor, and profit factor. This paper presents a mathematical programming formulation that aims to maximise the centralised system’s profit in the industrial site considering multiple qualities of reused/regenerated water. A case study of numerous scenarios, each with various numbers of water headers and different water prices, is used to test the model. The results obtained show that as the total annualised cost increases, the selling prices of reused/regenerated water increase, the centralised system’s profit also increases, and there is a possibility to surpass the freshwater price. For scenarios with subsidy and low total annualised cost, there is an opportunity to increase the centralised system’s profit by increasing the profit factor in determining the reused/regenerated water price without exceeding the freshwater price. Based on the case study, Scenario 7 with the highest number of water headers is chosen as it has the highest freshwater reduction, which is 70 %, low total annualised cost, a comparable profit with a profit margin of more than 15 % and the highest profit factor can be applied compared to the other scenarios.