Last minute investments in high cost desalination plant and responses to extreme rain across much of Australia have highlighted the need for the water sector to make efficient investment and operational decisions in the face of increasingly volatile weather.

Splash is Frontier Economics’ proprietary water model. It provides stakeholders with a fast, powerful, easy to use tool for optimising both long term augmentation plans and shorter term operational decisions within a single model. Critically, Splash enables analysis of outcomes with regard to uncertainty about rainfall and demand.

Splash determines the efficient (least-cost) operation and augmentation in a water system over a long-term horizon (e.g. 5-50 years) with regard to expected inflows and demand or with regard to uncertainty across multiple future ‘states of the world’. The model can also incorporate regulatory policy constraints, for example environmental releases.

Including more detail on pipelines and regional demand allows operational decisions to be modelled. Splash can be used to determine the efficient long run marginal cost of a water system, to determine the insurance value of desalination plant over the long term and to analyse policies that impact on the sector such as scarcity pricing as an alternative to water restrictions.

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