August 2008, Vol. 20, No.8

Global Desalination Market on the Rise

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As water shortages persist, the need for desalination will continue to grow

Across the globe, booming population growth is placing increasing demand on freshwater resources that are needed to supply the world’s growing agricultural and domestic needs.

However, as this demand is rising, water shortages and regional droughts are becoming more severe, creating an unprecedented need to develop new sources of water supply.

At a recent Top Five Risks conference hosted by Goldman Sachs (New York), a panel of experts said that a catastrophic water shortage poses a substantial threat to mankind this century, and a Goldman Sachs report presented at the conference states that demand for water continues to escalate at unsustainable rates, with global water consumption doubling every 20 years. Along with this forecast, the International Water Management Institute (Battaramulla, Sri Lanka) estimates that by 2025 some of the world’s most severe water scarcity problems will be located in countries experiencing tremendous population growth, such as China and India, as well as dry desert regions, such as the southwestern United States, the Middle East, and Southern Africa.

As the ever-increasing global demand for water continues to become more urgent, many countries are turning to the ocean and its vast supply as a future source for water sustainability. With this, the global market for desalination is poised for significant growth in the years to come.

Earlier this year, BCC Research (Wellesley, Mass.) released its Seawater and Brackish Water Desalination report in which it was estimated that the global market for desalination would grow at a compound average annual rate of 13.4% through 2012. Although less than 1% of the world’s water supply is produced by desalination, the BCC report says that this percentage is changing rapidly. Currently, global desalination capacity is about 42 million m3/d (11,100 mgd). However, another 24 million m3/d of capacity is anticipated to be added during the next 5 to 10 years.

BCC analyst Susan Hanft, the report’s primary author, said desalination projects are either being planned or considered in almost every region worldwide. Indeed, Sub-Saharan Africa, due to a lack in capital and resources, is the only major region not exploring desalination as a viable option for future water demand. Hanft said the Middle East is the world’s largest desalination market, comprising 55% of the world’s capacity and a current market value of more than $1 billion. This market also is anticipated to experience 14.2% annual growth during the next 5 years.

While the Middle East is the largest, Hanft said Europe is the world’s fastest-growing desalination market, with Spain, Greece, and Cyprus being the major driving forces.

“There are over 700 plants located in Spain alone,” Hanft said. “However, Spain plans on doubling its total capacity over the next 5 years. Much of Europe’s forecasted desalination growth is also based on the tourist industry, which is largely dependent on desalination.”

The same holds true for tourist locations in the Caribbean, where BCC found cost-effective, small-scale desalination projects being installed in hotels and resort communities located in such destinations as Jamaica and the Antilles.

Alternative-Energy-Based Desalination

Within the last two decades, desalination has become more of a viable water treatment alternative due to advancements in membrane technology that have significantly dropped operating costs, making the process much more efficient and cost-effective. “Since the early 1990s, the economy of scale for desalination has steadily improved,” said Tom Pankratz, director of the International Desalination Association (Topsfield, Mass.) and editor of the Water Desalination Report. “However, it began leveling off around 2003 as higher energy costs began to take hold. Desalination is also subject to higher commodity prices; these overall increases have prohibited operating costs of desalination from going down further.”

Escalating commodity and energy prices are one good reason why many regions and countries are beginning to pursue desalination projects fueled by renewable energy. “The use of renewable energies is increasing exponentially as power sources for desalination,” Pankratz said. “This is a very important trend, as desalination is a fairly energy-extensive process.”

According to BCC, most of the world’s planned and current desalination projects will be powered by conventional means. However, various forms of alternative and renewable energy, including nuclear, solar, wind, and even wave power where tidal forces are utilized to generate electricity, are being tested in pilot-scale projects.

Hanft said wind-powered desalination projects have been built in Australia, Germany, France, Greece, Israel, Spain, Puerto Rico, and the United States. Nuclear-powered desalination also is attracting considerable interest, with pilot-scale projects being advanced in Japan, South Korea, Indonesia, Russia, Pakistan, Morocco, Argentina, and Egypt.

According to a study by the German Aerospace Center titled Concentrating Solar Power for the Mediterranean Region, solar power will be the most cost-effective method for desalination in the Middle East by 2020. BCC found that most of the world’s solar-powered desalination projects are located along the Mediterranean. However, solar power is the least explored of the different types of alternative-energy-based desalination projects due to the need for large areas of solar panels. “Experts estimate that about 200 ac [81 ha] of solar panels are currently needed to power a 50-mgd [189,000-m3/d] plant,” Hanft said.

Pankratz said Australia has the most renewable-energy-based desalination projects, with new plants being built in Sydney, Adelaide, and Melbourne that will all be greenhouse-gas neutral. In Perth, a 136,000-m3/d (36-mgd) project has been built that is indirectly powered by a nearby wind farm, and a second similar desalination project is now under way. “The Australian government has a very progressive view on energy use and is doing everything [it] can to minimize energy requirements and to use renewable sources,” Pankratz said.

In the United States, wind-powered desalination is being advanced in West Texas, where a pilot project is being developed in partnership by the Texas Office of Rural Community Affairs (ORCA), Texas Tech University (Lubbock), and the City of Seminole that will desalinate brackish groundwater from the deep Santa Rosa aquifer. Initially, the project will be built with a 50-kW wind turbine to help power a reverse-osmosis facility with a capacity of 114 m3/d (30,000 gal/d). However, the project will be constructed for future expansion, and, if successful, 3 MW of wind turbines will be installed to power a plant capable of desalinating as much as 11,355 m3/d (3 mgd). The project will be the first of its kind in the United States in which wind power is utilized for desalinating groundwater.

Travis Brown, renewable energy program manager for ORCA, said the project holds a great amount of promise for many small towns and rural communities in the Great Plains and the Midwest that have no access to surface water. Wind power also holds great potential throughout much of West Texas and the Texas Panhandle. “This region is one of the best locations for harnessing wind power in the U.S., if not the world,” Brown said. “Texas is the nation’s highest producer of wind power, with more than 5000 MW of annual capacity.”

So far, the project has received a total of $2.7 million in grants that include $500,000 from ORCA, $400,000 from the City of Seminole, $300,000 from the Texas Water Development Board, and $200,000 from Texas Tech University. More funding could come later from the U.S. Department of Energy, as well as the U.S. Bureau of Reclamation.

Regulatory Obstacles

The majority of new U.S. desalination projects are located in California, Florida, and Texas. These states, along with others, are experiencing acute water supply shortages and urgently need new water supply projects to meet the needs of growing populations. In California alone, where Gov. Arnold Schwarzenegger recently declared a statewide drought, Hanft said a total of 28 desalination plants are in some stage of planning or development. However, California’s stringent environmental regulations are proving to be a major impediment for timely desalination plant construction.

One example is the $300 million Carlsbad desalination plant and pipeline system to be developed by Poseidon Resources Corp. (Stamford, Conn.). Once built, the plant will be the largest and most technologically advanced desalination facility in the Western Hemisphere. The project is anticipated to treat and supply 189,000 m3/d (50 mgd) of water to meet the needs of 112,000 people in Southern California, or 9% of San Diego County’s total water demand.

However, despite Southern California’s urgent need for a reliable and droughtproof water supply, the Carlsbad project has been held up in the state’s permitting process for the last 5 years, even though it was proposed a decade ago.

“To put this in perspective, while the Carlsbad project has been slowly winding its way through the state’s environmental regulatory process, a number of desalination projects have been aggressively advanced in Australia where similar drought conditions exist,” said Peter MacLaggan, senior vice president of Poseidon Resources. “A major desalination facility has been commissioned in Perth, and other similar projects are either being planned or are currently under construction in Sydney, Melbourne, and Adelaide.”

In total, MacLaggan said the projects in Australia will have a combined operational capacity of 681,300 m3/d (180 mgd) by 2011. “What is important to point out is that the Australians are not shortcutting the environmental process,” MacLaggan said. “They are approving, permitting, and building desalination projects in an environmentally responsible manner, combined with an aggressive timetable.”

The Carlsbad desalination project will be the first major California infrastructure project to eliminate its carbon footprint through the use of a high-efficiency energy-recovery system and energy-efficient pumps and motors, implementation of solar photovoltaic systems, and the purchase of renewable energy credits. Despite the delays, MacLaggan estimates that construction will begin by the first half of 2009. 

 Jeff Gunderson, WE&T