ABSTRACT
The cost of water production encompasses all expenditures associated with project implementation, operation, and maintenance and financing, and consists of fixed and variable components. The fixed water costs are expenditures associated with plant construction and with repayment of the capital investment in the plant and of the portion of the annual operation and maintenance (O&M) expenditures that are independent of the actual volume of water produced by the desalination plant. The capital cost for construction of the desalination plant is usually amortized over the term of repayment of the capital used to build the desalination plant. To determine the amortized value of the capital cost this cost is divided by a capital recovery factor and by the plant’s design capacity availability factor. Fixed costs are typically calculated by dividing the annual fixed O&M expenditures by the design average annual production capacity of the desalination plant and by the plant design capacity availability factor.
