In February 2007, the government of New South Wales decided to go ahead with the construction of a $1.1-billion desalination project. The decision was a response to a prolonged drought. In an interview with C.J. Schexnayder New South Wales Water Utilities Minister Nathan Rees provides context for the government's water infrastructure strategy.

ENR: Why is there such a pressing need for a desalination plant?

Rees: The assessment of CSIRO, our preeminent scientific research body, is that we have got a dry continent that is getting dryer. We are now going through the worst drought in the last 100 years and they are telling us we can expect rainfall in Sydney and New South Wales to reduce by up to 13 percent over the next 22 years.

If you look forward, the population projections indicate we will have in the order of another million people in Sydney over the next 25 years, which, in engineering and planning terms, isn't a long way away. Less rain, more people equals a need to augment water supply.

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  • ENR: Are there any other water options available?

    Rees: In Sydney the discussion has been around either treating effluent and putting that back into the potable system so people can drink that or desal.

    If you were to trap and treat effluent on the coastal strips of Sydney which is where the big plants are and then pump it up behind Warragamba Dam that's a 60 kilometer minimum trip not counting the addition 20 kilometers you would need to pump it to ensure it got proper dispersion and exposure to UV light.

    So even leaving aside the "yuk" factor, and that's significant, the price of doing that was about $1 billion more than the construction of a desal plant.

    ENR: And rivers?

    Rees: Here in Australia we've got 80 percent of our people living on the coast and we are the most highly urbanized country in the world. Now, for the most part, there are no substantial rivers running through those areas so there is only so many dams you are able to put in.

    At one point there was a proposal to dam a large river to the south of Sydney but the problem with that in a drought, it was going to take us something like eight years to build, then eight years to fill and cost $3 billion. And it is obviously not going to help you in the present drought. That had been on the drawing board for more than 50 years but it has been indefinitely deferred.

    ENR: How confident are you that this was the right decision?

    Rees: On balance, all the advice and evidence pointed in the direction of a desal plant. It's not been a popular decision everywhere but it is obviously the right decision to make. If you are presented with all the facts and materials and projections and then would choose to not build it, that would be seriously irresponsible discharge of government.

    ENR: What prompted the timing of the decision?

    Rees: We initially said that when the dams and the capacity hits 30 percent that's when we will press 'go' on construction. Why? Because if you look at the average drop in the dam levels each week, 30 percent roughly matched the necessary construction time for a desalination plant. If there had be no rain and the water levels continued to come down and we pressed 'go' and then the water continued to come down at that rate then the plant would have been able to kick in at the point where our water finally ran out.

    ENR: Yet the decision was made before reaching that threshold, correct?

    Rees: The initial idea was to press 'go' at 30 percent but we pressed it earlier than that � not much earlier, we hit 32 percent in February � and we chose to do that for two reasons.

    First, the initial timeline for construction didn't have any allowance for contingency � if there had been a hold-up in materials or extended weather that precluded construction. The second was that for both the materials involved for the construction of the desal plant as well as the skills and expertise needed to put the thing together, we are in an international queue and that queue is getting longer.

    It made sound financial sense because we are in an international market for labor and product so if we can get in earlier we can save a substantial amount. We've been vindicated on that since the next city to go desal after us was Melbourne and they are paying about $1 billion more than we are and they only went a couple of months after us.

    ENR: What was the worst-case scenario if you had not made the decision?

    Rees: If we pressed go at 30 without any allowance for contingency and there had been a need for contingency we didn't account for, [then] Sydney could have run out of water� the consequences of that would be disastrous not just for Sydney but for the entire country.

    For Sydney and New South Wales, we've got a third of Australia's economy and if there is a major question mark on our ability to provide water to the region then it's not the New South Wales economy that gets the wobbles, it the whole country.

    ENR: Originally this was intended as an emergency resort but now water levels are back up and the project is still going forward, is that the case?

    Rees: There is no question in my mind this will become part of the baseload supply of water for Sydney and the reason for that is the population increase we are going to have.

    ENR: Why run it when dams are full?

    Rees: Right now Sydney Water buys its water from the Sydney Catchment Authority. We purchase bulk water off them, treat it, distribute it. That water costs us, at present, about 56 cents per kiloliter. An independent authority decides what the bulk water price should be for the water from behind the dam there is another determination of that cost in a couple of years time. By that stage the price is expected to go up. The marginal cost of water from desal will be 60 cents a kiloliter so, at that point it should be cheaper to use the desal water than the water from behind the dam.

    ENR: The desal plant is designed to be doubled in capacity to handle 500 Gl per annum, is there some type of trigger point for that to be initiated?

    Rees: No. It's ready to go if required but we don't need to think that through yet. We are doing this in tandem with a couple of other elements of the (Water) plan that should work together to create a substantial substitution effect for using the water from behind the dam.

    We are going to increase the amount of water we use for industrial use to 11 percent of total supply. We currently have all those industries out there using potable water. They can use recycled water. We have large-scale plans to put the infrastructure in for that and we expect to reach that 11 percent by 2015.

    Add to that the 14 percent of additional capacity from the desal plant and another three percent from permanent water restriction and that's 28 percent of additional capacity for our system over the foreseeable future.

    ENR: What type of water restrictions are in place?

    Rees: We are at Level 3 restrictions now and they are quite severe. You are talking about getting to a point that the only use left is not discretionary. People that go to Level 4 restrictions means seriously limiting your lifestyle. So we are at Level 3 now and I don't see a need to go to Level 4.

    ENR: If desal relieves your water supply crisis, is there a danger the conservation efforts will lag after that since the urgency for them will have been removed?

    Rees: No. And the reason for that is the community's sentiment over this has shifted dramatically over the last ten years. Ten years ago people looked at water restrictions as an imposition and a burden. Now, even though our dams are now up to roughly 60 percent, if I were to go out tomorrow and say "I'm going to ease water restrictions" I would be belted about the head. The community expects us to be responsible with our policies and they expect us to save water where it is appropriate and for us to come out now and ease restrictions would be seen as irresponsible.