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

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.