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What is the real cost of water?

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Rain water tanks
Desalination
Well
Farm dam
Out of the Murray
Notes
Water is not consumed

Other pages...

Evaporation reduction
Murray Darling
Water in South Australia
 
This page was created on 2007/09/14 (2007, Sept. 14th), modified 2010/01/01
Contact; email daveclarkecb@yahoo.com.


The answer is not simple, it depends on many factors.

 
Cost of water (per tonne)
Murrumbidgee Irrig. Area$0.0013
Murray, Sunraysia$0.06    
Well $0.44    
Farm dam $0.50    
Mains$1.00    
Farm dam, with cover $1.43    
Rain water tank $4.00    
Bucketing$100.00    

Climate change is increasing the value of water, because it is making water more difficult to get and increasing evaporation losses from storages. It is important to reduce evaporation as far as possible; to do so costs money.

Bob Carpenter believes that he can desalinate water for Aust$0.40/kL using solar power; you be the judge.
In South Australia in late 2007 mains water is sold to most householders for about Aus$1.00/kL. That is, $1.00 per tonne, or 0.1 cents per kilogram, a very cheap commodity, especially when you consider that it is delivered to your home! If you were to pump it directly out of the Murray it might cost as little as $1.34 per megalitre (ie. 0.134 cents per kilolitre or tonne, or 0.000134 cents per kilogram). (That is when Murray irrigators could get as much water as they wanted, before the drought). At the other end of the scale, if you use a bucket to collect the cold water that comes out of your shower before it runs hot and then cart that out to your garden you would have to value it at perhaps 10¢ per kilogram to make it worth your while.

Dividing 10 by 0.000134 gives about 75 000; water is, or has been, worth 75 000 times more to some people, or in some situations, than in others. And this is all within Australia; in countries with more plentiful supplies you can be sure irrigation water would be cheaper, and in countries where people have to carry water kilometres on their heads in jars they would value it more highly than Australians who carry it a few steps from their shower to their garden in buckets. So depending on who you are, where you are, where the water is, and how we come by it, we place very different values on it.

The largest part of the cost of mains water has been the cost of getting the water to the 'consumer'; this is beginning to change.

Australia's water supply is endangered by climate change. A component in the cost of water becomes the cost of doing something about climate change.
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Rain water tanks

The SA government is encouraging (in some cases, forcing) people to buy rain water tanks. You can buy small tanks relatively cheaply (about $700 for a 2kL tank) or pay quite a bit more for a large tank (say $3000 for a 22kL tank, $15 000 for a 250kL tank). Before making a decision you should think in terms of the price that you are going to pay per kilolitre of storage space. These vary from around $400/kL for small tanks, around $140/kL for 22kL tanks and $60/kL for very large tanks. Most likely you will also have to buy a pump, perhaps another $300.

Considering only the cost of the tank (not including the cost of plumbing it into your house) what does rain water cost you? Suppose the tank has a life of twenty years. With a large (22kL) tank you might fill it and empty it twice each year, so for your $3000 you get 22kL × 20 ×2 = 880kL; this then is $3000/880 = $3.41/kL. In the case of a small (2kL) tank you might fill it and empty it four times a year, so for your $700 you get 2kL × 20 × 4 = 160kL; this then is $700/160 = $4.38/kL. Of course the small tank has the disadvantage of providing a less reliable water supply because it is much more likely to run dry than the large tank. What value do you put on reliability of supply?

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Farm dam

 

Pumping costs – calculations

I am calculating for the pump on my dam which has an electric pump, needed a 100m underground electrical line, and pumps 200m with a 20m lift.
  • Pumping cost: 800 Watts, 1.17L/sec; to pump 500kL/yr, 120hr pumping; 95kWh at $0.16/kWh, $15/yr.
  • Pump depreciation: cost $400, life 10yrs, $40/yr.
  • Pipeline depreciation: cost $440, $400 trenching, 30yr life; $28/yr.
  • Power line depreciation: $2000 installation, 30yr life; $67/yr.
Total cost: $150/yr or $0.30/kL.
A smallish farm dam (say 2ML) (if you have a place to build one, if you are allowed to build one, and if you live in an area where you get sufficient run-off to fill one) might cost you $3000 to build and another $3000 for connecting to electricity, installing pump and pipes.

A farm dam should last 30 years. Supposing you take 500kL from your dam each year for 30 years, in the box at the right I have calculated pumping costs as $150/yr, add to this $100/yr depreciation on the dam and we have $250 for 500kL each year, $0.50/kL.

If you want or need to place some sort of cover on your dam to reduction evaporation losses, and minimise build up of salinity, this will increase your water costs further. If the cover costs $7000 and lasts 15yrs, $467/yr; add another $0.93/kL, making the grand total cost of your dam water $1.43/kL.

Of course there are other ways of calculating these costs; the capital costs vary from year to year, what I paid to put in my dam 15 years ago would not cover the cost of building the same dam today (I've estimated $3000 as the 2009 cost of building the dam); I could have calculated the evaporation cover cost in terms of how many kilolitres of evaporation it would stop each year; and my estimates for the lives of the assets are arbitrary.

Some say that farmers with dams or bores get their water free!






Desalination

On my page about South Australia's water supply problems I refer to published sea water desalination cost ranging from about Aus$0.60/kL to $1.17/kL. Note that this is the cost at the desalination plant; it does not include the cost of delivering the water to the 'consumer'.
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Well

 
Cost of well water
Cost of well$4000
Cost of pump & plumbing$3000
Cost of getting power on$3000
Capital cost$10 000
Life of well30 years
Annualised$442
Per kL (assuming 1ML/yr)$0.44
A well might cost you anything from a couple of thousand dollars up to tens of thousands of dollars. After drilling, and if 'successful' it might be capable of yielding anything from a kilolitre per day to several megalitres per day. The water you get, depending mainly on where you drill, might be nearly as fresh as rainwater or more salty than the sea. In my experience, in areas where both wells and dams are feasible, wells usually yield rather more saline water than that in dams.

Chances are that you will have to get permission from a government authority before you drill a well, and a license to use water from the well. This is necessary because when you pump water from a well you are affecting your neighbours.

The cost of putting an electric pump in your well will probably be several thousand dollars, again, this can vary greatly depending on the capacity of the pump, the location of the well relative to the power supply, and other variables.

Once you have your well and your pump ready to go, getting the water out of the well will be very cheap – although will depend on the depth of the well. The further your pump has to lift the water to the surface the greater your electricity consumption per kilolitre.

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Out of the Murray

Regional water delivery charges for Murray irrigators vary from $1.34/ML in the Murrumbidgee Irrigation Area of NSW up to $60/ML in the Sunraysia district of Victoria. See table 5 on Irrigation by the Murray Darling Basin Commission.





Notes

Water is not consumed

Unlike almost all of the other things we buy, we don't destroy water when we 'consume' it. We might dirty it, we might dissolve substances in it, or we might cause it to transpire through a plant and into the atmosphere, but in almost all cases we receive water and we release the same amount of water back into the environment when we are finished with it.
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Index

On this page...
Desalination
Farm dam
Notes
Out of the Murray
Rain water tanks
Water is not consumed
Well