A Market Report Worth Its Salt: Desalination Markets 2010

"A market report worth its salt": Desalination Markets 2010 - a review by Sahana Singh, Editor, Asian Water magazine, February 2011

In a world finding itself short of reliable supplies of freshwater, it is hardly surprising that the only perennial and inexhaustible source of water – the ocean - is becoming more important despite its saltiness. Desalination Markets 2010: Global Forecast and Analysis published recently by Global Water Intelligence takes a comprehensive look at the business of desalination worldwide.

Analysing the crisis of water scarcity, the report notes that increasing the efficiency of water use such as by applying conservation measures is rarely taken up as the first line of action by public authorities. There is a tendency to pursue technological means of increasing water supply rather than attempting to change the lifestyles of people. Thus, there has been impressive progress in the development of desalination technologies, which has led to a reduction in their costs. Economies of scale have helped in reducing the costs of thermal desalination plants. Improvements in membrane flux and better energy recovery devices have helped to drive down the costs of reverse osmosis (RO).

The authors of the report have forecast that the desalination market will grow from 68.3 million m3/day to 129.9 million m3/day between 2010 and 2016. Saudi Arabia is expected to be the leading desalter in terms of capital expenditure followed by USA, UAE, Australia, China, Kuwait, Israel and Libya.

The report examines the various desalination technologies available today, compares their features and forecasts their growth in different parts of the world. It points out that seawater is being more widely desalted than brackish water because of the greater ease of disposal of brine. It directs attention to the rising competition between Multi-Stage Flash (MSF) and Multi-Effect Distillation (MED) amongst the Gulf countries. Some interesting insights have been given into new technologies which are still in pilot-scale.

Historically, MED was perceived as uncompetitive for larger capacities but recent innovations have changed the trend and made it as competitive as MSF for large capacities such as the 800,000 m3/day plant at Marafiq, Jubail in Saudi Arabia. The Gulf countries with their highly saline waters and cheaper energy costs (compared to international prices) have generally preferred thermal distillation methods while in the rest of the world, RO dominates desalination technologies.

Desalination Markets 2010 features profiles of 33 countries, giving updates about their water sector, their existing and proposed desalination capacities as well as forecasts of their capital and operating expenditures up to 2016. In each country, the progress of desalination projects is tracked in a tabular format.

Profiles of 106 companies have been provided along with their desalination strategies and listing of selected projects. Over 600 pages are packed with charts, tables and commentaries on the desalination market.IDE stands out with the largest developer market share in the Build-Operate- Transfer (BOT) projects followed by Hyflux, Abengoa, Hutchinson, ACS, Sacyr Vallehermoso, Macquarie Capital, Suez Environnement, Thiess and Veolia Environnement in that order.

An interesting highlight in the report is that since the Tuas contract in Singapore (2003), no other desalination plant has been able to deliver water at a cost below US$0.5/m3. The falling dollar, rising environmental and energy costs, and shortages of labour and materials have been attributed to the apparent rise in the cost of desalination.

However, there is no stopping the size of desalination plants. When Hyflux completes its 500,000 m3/day plant in Mactaa, Algeria this year, it will be the largest in the world but only until Israel’s 510,000 m3/day plant in Soreq is ready. The biggest giant among them all will be Saudi Arabia’s Ras Azzour plant with a capacity of 1,025,000 m3/ day set for completion in 2014. With plants getting bigger, there is another repercussion. Forecasts can go awry even if one giant project does not take off as planned. However, that will not diminish the value of this report as an important reference book.