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Investigating the value of keeping options open for water infrastructure in the Lower Hunter, New South Wales

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  • Rust, Steven
  • Silberberg, Ben
  • Turner, Emma
  • Sharp, Basil

Abstract

Policy discussions around the world have increasingly focused on the need for resilient water and wastewater systems. The use of small-scale, ‘incremental’, measures that maintain substitutability in investment choices can improve a system's adaptability. Using past shifts/shocks, we estimate an option value for unforeseen events that can change the yield-demand balance for potable supply. For a hypothetical dam, we find avoided costs ranging from $11.1 m to $78.1 m for amounts of extra time ranging from one to ten years; and for a permanent desalination plant, the avoided costs ranged from $33.6 m up to $234.7 m for the same amounts of extra time.

Suggested Citation

  • Rust, Steven & Silberberg, Ben & Turner, Emma & Sharp, Basil, 2020. "Investigating the value of keeping options open for water infrastructure in the Lower Hunter, New South Wales," Utilities Policy, Elsevier, vol. 62(C).
    • Handle: RePEc:eee:juipol:v:62:y:2020:i:c:s0957178719303339
    DOI: 10.1016/j.jup.2019.100980
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