Citation:

Muhammad Ridho Fithri Wikarta, Pri Hermawan. "System Dynamics Modeling to Develop Industrial Wastewater Recycle Business in Indonesia" International Research Journal of Economics and Management Studies, Vol. 3, No. 12, pp. 141-154, 2024.

Abstract:

Water is an important resource for daily consumption, production, and industrial operations. Global freshwater demand has increased, and water scarcity has become a critical challenge in industry. Freshwater withdrawals and wastewater discharge hold significant potential for developing a wastewater recycling business in Indonesia. Factors such as the growth of industrial estates, rising freshwater costs, and industry-driven sustainability goals further amplify this opportunity. Establishing a wastewater recycling industry in Indonesia requires systemic solutions that address the complexities of diverse industrial sectors, varying water sources, and regional cost disparities. This study employs a quantitative approach, drawing on literature reviews, discussions with water treatment company stakeholders, and internal project data to identify key variables influencing the development of wastewater recycling. A system dynamics framework was used to analyze relationships between variables, employing Causal Loop Diagrams (CLD) and Stock and Flow Diagrams (SFD) for simulation. Scenario simulations were conducted on critical variables, including wastewater recycling demand, recycling ratios, and associated costs. Findings reveal that wastewater recycling offers significant benefits, including freshwater savings, reduced customer costs, and annuity revenue streams for water treatment companies. Using a case study of an industrial estate in West Java, the research demonstrates the high potential for wastewater recycling development in Indonesia. Vensim modeling shows that 2.38 million m3/year of fresh water might be saved overall, and that water treatment providers could earn 26 billion rupiah in 2027 from chemicals and equipment. The framework provided in this study serves as a valuable decision-making tool for considering investments in wastewater recycling processes.

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Keywords:

Causal Loop Diagram, Industrial Wastewater, System Dynamics, Stock and Flow Diagram.