A Cost-Simulation Approach to Finding Economic Optimality in Leakage Reduction for Complex Supply Systems

When negotiating for optimal decisions considering complex multi-centre (or multi-district) water supply systems, the optimal economic level of a renovation strategy for leakage reduction must be defined as reaching an equilibrium between the marginal benefits of saving water and the marginal costs of additional actions undertaken in achieving leakage reduction. This concept is used in the present paper to answer the question of what the leakage reduction target should be and how related costs can be justified. However, such a problem may be much more difficult to analyse if renovation is constrained by reduced water resources and limited funds. Here the optimal renovation strategy is thus based on a cost-simulation approach, evaluating a cost function for the water supplied to demand centres in the system. The water cost function is evaluated using a simulation tool for water system management and via cumulative cost evaluation of the paths connecting supply to demand nodes. This procedure enabled the identification of investment priorities in renovation strategies for leakage reduction between the centres in the network. An example application to a real-life water system in Sardinia (Italy) is provided for illustration.