The current state of desalination
Good morning, ladies and gentlemen. On behalf of the International Desalination, our strategic partner Global Water Intelligence, and World Congress host TechnoPark, I want to thank you for joining us as we announce the latest desalination inventory and explore current and projected trends in our industry.
I am pleased to report that the desalination market continues to grow. According to the 22nd DesalData IDA Worldwide Desalting Plant Inventory, there are 14,451 desalination plants with a combined capacity of 59.9 million cubic meters per day (m3/d) now online. This represents an increase of 12.3% over last year. In addition, a further 244 plants with a capacity of 9.1 million m3/d are known to be under contract.
More plants with more capacity have been brought online during the past year than ever before.
One of the major trends the industry is seeing is sharp growth in demand for seawater desalination. In fact, since IDA’s last World Congress in 2007, the installed capacity of seawater desalination plants has grown by 29.6%.
The world’s largest desalination plants, both online and in the planning stages, are seawater facilities located here in the Middle East region. We tend to build desalination plants in phases, adding onto facilities as demand grows. The Jebel Ali complex here in Dubai is a good example, where an additional 600,000 cubic meters per day of capacity was recently contracted. The largest production from an individual installation is the Shoaiba 3 project on the west coast of Saudi Arabia, serving Jeddah, Makkah and Taif, producing 880,000 cubic meters per day. Seven other commissioned or contracted plants have capacities in excess of 400,000 cubic meters per day. And Ras Azzour, on the east coast of Saudi Arabia, has a planned capacity of one million cubic meters per day
The chart showing various types of feedwater for installed capacity illustrates the importance of seawater. As of June 30, more than 62 percent of installed capacity was seawater desalination, followed by 20 percent for brackish water and just under 18 percent for all other sources combined.
Of the two desalination processes, reverse osmosis, a membrane process, accounts for nearly 2/3 of contracted capacity. The increase in market share is being driven by sharp acceleration in the growth of membrane markets in such countries as Spain, Algeria and Australia.
Thermal processes, led by Multi-stage Flash, account for about 1/3 of installed capacity. Thermal processes are the most widely used desalination technologies in the Middle East region, accounting for more than half the world’s installed capacity.
While the Middle East remains the largest market for desalination, we have seen a change in the geography of desalination since 2003. Large scale programs in Australia, Algeria and Spain have made these markets much more prominent.
Saudi Arabia continues to lead the list of Top 10 countries by total installed capacity since 1945, followed by the United States, the United Arab Emirates, Spain, Kuwait, China, Japan, Qatar, Algeria and Australia.
Now that we’ve explored the numbers, let me address the top trends we are seeing. First, energy efficiency a primary driver in the selection of technologies and design/operating parameters. There is a push toward more efficient desalination technologies such as reverse osmosis for seawater. In addition, energy recovery technologies are dropping SWRO energy consumption below 3 kWhr/m3. The focus on energy efficiency is driven partially by concerns about greenhouse gas emissions, but also the cost of power in general.
Second, environmental considerations have become increasingly important in site selection, in choosing a source of power for the desalination process as well as when making technology and design decisions. As an industry, we are now seeing the results of being better stewards of the environment. IDA has taken a leadership role by encouraging the use of environmentally responsible desalination practices and intakes and outfalls. In fact, IDA is launching an Environmental Task Force at this World Congress. Tom Pankratz will go into further detail about the important issue of desalination and the environment, so let me just say that this is an issue of increasing importance to all of us involved in desalination.
As noted earlier, desalination plants are rapidly increasing in size. This presents opportunities in terms of economy of size. The industry is aggressively developing technologies and practices by which to leverage economy of size advantages including increasing unit sizes of specific equipment in both thermal and membrane desalination.
We are also seeing a trend towards privatization of desalination projects. Since 2002, 38% of desalination plant capacity has been privately financed. Privatization of desalination began in the Caribbean and was instituted in Abu Dhabi in early 2000s. In fact, there is a movement throughout the GCC toward privatization of both power and desalination.
Finally, we continue to pay increased attention to driving down the cost of desalination. Cost depends on a number of factors, and we need to be mindful that the cost equation includes both capital expenditures and operating costs, which are highly dependent on the cost of power. Overall, I am pleased to report that the industry has been successful in lowering operating costs, so that we are typically seeing operating costs in the range of $0.40-0.90/m3 – the variability largely a function of the local cost of power.
While the desalination market continues to grow, the rate of growth slowed in 2008/2009 as a function of the global economic downturn, as many plants were put on hold due to the industry’s difficulty in obtaining project financing.
However, while some projects may have been delayed, the demand for water continues to increase. Such factors as population and economic growth, pollution of existing water resources, and climate change continue to drive the need for new, reliable sources of water. Desalination is one of the answers, and it continues to be an increasingly important part of global water solutions for the 21st century.
Now that we have explored the current state of desalination, I’d like to turn the program over to Christopher Gasson, publisher of DesalData.com by Global Water Intelligence, who will talk about forecast trends.
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