Technical efficiency and cost analysis in wastewater treatment processes: A DEA approach

a r t i c l e i n f o Keywords: Cost structure DEA models Efficiency Wastewater Water reuse Benchmarking methodology In light of the growing importance of water reuse as an alternative source of water resources in many regional areas, the objective of this paper is to analyse the efficiency of wastewater treatment plants as a basic requisite to improve the potential of the water reuse. The analytical benchmarking methodology Data Envelopment Analysis (DEA) is used to calculate efficiency measurements. An efficiency index is obtained for each plant by means of mathematical programming techniques, aiming to minimise the inputs used in the water treatment process. This indicator is used as a reference to analyse plants' activity through a series of variables including the size of the plant or its cost structure. Given the importance of wastewater treatment in the Valencia Region (Spain), empirical research has been carried out for 338 plants located in this area. We verify the fact that the largest plants run more efficiently than smaller plants, as was to be expected. At the same time, there is evidence that a series of representative variables in the treatment process are clearly linked to efficiency. Maintenance and waste management costs are the most important factors to explain the differences between plants in terms of efficiency. Finally, the benchmarking methodology (Data Envelopment Analysis) is confirmed as a very useful management tool for the study of wastewater sector. It is common knowledge that water reuse is beneficial, not only because it enables water resources to be recovered, but also because it reduces environmental impacts. However, it is also true that some variables such as cost efficiency of the treatment process, the effluent quality and the risk existence, among others, condition its use, particularly in comparison to other available resources. In this sense, an in-depth analysis of the local water market is required in order to know the real possibilities to make water reuse an attractive option for a given sector, such as agriculture, industry and aquifer recharging. This analysis should bear in mind both the costs involved in the various water supply alternatives [1] and the type of crop, profit margins, social stance with respect to the environment, irrigation methods and guaranteeing supply, among other aspects. Any given analysis of the potential of water reuse in a particular region and for a series of specific uses requires an extensive …