Paradigm shift to enhanced water supply planning through augmented grids, scarcity pricing and adaptive factory water: A system dynamics approach

This paper details a system dynamics model developed to simulate proposed changes to water governance through the integration of supply, demand and asset management processes. To effectively accomplish this, interconnected feedback loops in tariff structures, demand levels and financing capacity are included in the model design, representing the first comprehensive life-cycle modelling of potable water systems. A number of scenarios were applied to Australia's populated South-east Queensland region, demonstrating that introducing temporary drought pricing (i.e. progressive water prices set inverse with availability), in conjunction with supply augmentation through rain-independent sources, is capable of efficiently providing water security in the future. Modelling demonstrated that this alternative tariff structure reduced demand in scarcity periods thereby preserving supply, whilst revenues are maintained to build new water supply infrastructure. In addition to exploring alternative tariffs, the potential benefits of using adaptive pressure-retarded osmosis desalination plants for both potable water and power generation was explored. This operation of these plants for power production, when they would otherwise be idle, shows promise in reducing their net energy and carbon footprints. Stakeholders in industry, government and academia were engaged in model development and validation. The constructed model displays how water resource systems can be reorganised to cope with systemic change and uncertainty. •System dynamics model integrates supply, demand and financial dimensions.•Diverse supply source portfolios that are grid connected alleviates water scarcity.•Desalination reduces need for restrictions compared to a rain-dependent portfolio.•Pressure retarded osmosis technology integration into desalination component of water supply networks for renewable energy.•Scarcity pricing is an effective strategy for reducing demand while simultaneously generating the additional revenues.