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Reports highlight current and future trends in the desalination market
FEATURE
Reports highlight current and future trends in the desalination market Here we provide the key points from two recently released reports that highlight current trends in the desalination market and provide an insight into how this sector may develop in the future. Industry rather than municipal supply is now the strongest driver of the desalination market, according to a new report published recently by Global Water Intelligence (GWI), a UK-based firm that researches and publishes business data and information about the water markets worldwide. Since the financial crisis of 2008, the growth of the market for sea-water desalination to augment municipal water supply has slowed to a standstill, but the use of the technology among industrial water users is accelerating – with double-digit growth rates expected over the next five years – says the company. Desalination technology removes salt and other dissolved solids from water. It can be used to make fresh water from sea water, to polish process water to create ultrapure water for use in applications such as generating power and washing microchips, or to clean up hazardous wastewater streams, for example, flow-back water from fracturing activities in shale gas extraction.
Capital expenditure The report explains that between 2002 and 2007 annual capital expenditure on desalination infrastructure increased from $2.4 billion to $8.7 billion, but over the past two years, expenditure has struggled to clear $5 billion per year as the flow of large municipal projects in Spain, Algeria, Australia and the United Arab Emirates (UAE) has all but dried up. Water technology companies are increasingly looking for demand from industrial users to fill the gap. The company’s ‘Industrial Desalination and Water Reuse’ report suggests that capital expenditure on industrial desalination and water reuse technologies will grow from $2.8 billion in 2011 to $5.7 billion in 2017.
Emerging themes Amid a rising awareness of water risk, and of the role that water technology can play in increasing productivity, themes are emerging as 8
Membrane Technology
the main drivers of this market, and are summarised in the points listed below. UÊ Process water is needed for industrial development in countries such as India and China, and in the Middle East. Power generation and petrochemicals use more fresh water than all other industries put together, but the fastest growing economic regions also have the lowest natural endowment of fresh water. This is driving demand for sea-water desalination and water-efficient reuse technologies. UÊ / iÀiÊÃÊ>Ê}ÀÜ}Êii`ÊÌÊÌÀi>ÌÊÜ>ÃÌiÜ>ÌiÀÊ from unconventional oil and gas extraction. Shale gas, oil sands and coal bed methane all bring to the surface produced water that is heavily laden with dissolved solids. Desalination technologies enable these waste streams to be disposed of safely or reused. UÊ 7>ÌiÀÊÃÊÀiµÕÀi`ÊvÀÊ}Ê«iÀ>ÌÃ]ÊLÕÌÊ many of the world’s most significant mineral resources are in regions where water is scarce, such as Western Australia, Northern Chile and Southern Peru. In some places, conflict over water resources has brought mining projects to a halt. Desalination and water reuse technologies enable miners to have a zero impact on local water resources. UÊ >À}iÊÛÕiÃÊvÊ } ÞÊ«ÕÀiÊÜ>ÌiÀÊ>ÀiÊ used in the microelectronics market, and as the trend towards smaller line widths and larger wafers continues, it becomes essential to develop desalination technologies that can remove every single ion of dissolved salt from the process water. UÊ "Ì iÀÊ`ÕÃÌÀiÃÊv>V}ÊVÀi>Ãi`Ê`i>`Ê for desalination and water reuse technologies include the food and beverage, pharmaceuticals, and pulp and paper sectors.
Barrier to growth Christopher Gasson, publisher of the report, remarked: ‘Industrial water users are waking up to the fact that water could be the biggest barrier to their continued growth. If you are an oil produc-
tion company in Alberta, an oil refinery on Bohai Bay, China, a power generator in Gujarat, a copper miner in Peru or a semiconductor manufacturer in Taiwan, you are going to need to spend a lot of money on water technology in order to ensure you stay in business over the next five years.’ ‘There is a fixed amount of water in the world, but demand is growing, particularly in the emerging economies, and in the resourcerich economies that feed them. Developing new, fresh- water resources through desalination, and making the most of existing ones through water reuse, is the only way forward for many industries.’
Water wars Gasson continued: ‘People talk about water wars, but the bigger conflict at the moment is between different user groups within a single country.’ ‘Last year, for example, three people were killed in protests against Southern Copper’s Tia Maria mine in Peru because they thought the company was not doing enough to protect the water environment. It is very difficult for businesses to win a water war like that. In the long run, it is much cheaper to invest in the technologies that make the problem disappear.’ ‘The companies which stand to gain most from the growth in the market for industrial desalination and water reuse are Veolia, GE Water and Siemens Water. GE and Siemens both bought into the water technology sector in 2004, but they were never able to make much of the municipal market. Now they are very well placed for the action on the industrial side – as is Veolia, which has steadily built up an enviable industrial water portfolio over the past decade.’ ‘Other companies to watch are Aquatech International, which has a strong membrane and thermal desalination portfolio; forward osmosis specialists Oasys Water and HTI; Memsys, which has a novel membrane distillation system; and Japanese ultrapure water specialists such as Kurita, Organo and Nomura Micro Science. Some of the mainstream
October 2012
FEATURE sea-water desalination companies like IDE, Abengoa and Acciona are also making the transition to industrial desalination successfully.’
Declining costs Once considered too expensive to use on a large scale, the cost of desalinated water has declined, says NRG Expert, an energy intelligence and market research publisher with offices in London, UK, and Toronto, Canada. This is because of technological advances, improvements in energy efficiency and an increase in the lifetime of desalination plants. NRG Expert says that: UÊ global capital expenditure on new and replacement desalination plants is expected to grow from $6 billion in 2010 to $18 billion in 2015; UÊ LÞÊÓä£xÊ"ÊEÊ ÊÜÊ}ÀÜÊvÀÊfÇ°£ÊLlion to $16.3 billion – mostly from the private sector; UÊ VÕÀÀiÌÞÊÌ iÀiÊ>ÀiÊÛiÀÊ£xÊäääÊÜ>ÌiÀÊ desalination plants in over 100 countries worldwide; and UÊ ÛiÀÊÈxÊÊÐÊ«iÀÊ`>ÞÊvÊÜ>ÌiÀÊ`iÃ>nation capacity is currently in operation and over 71 million m³ per day is contracted. As the price of water desalination is falling – and may be equal to freshwater extraction
in 2020 – it is becoming more appealing to government decision-makers, says the company. Key points from its recently released study ‘Global Desalination Report’ are listed below.
Contacts: Global Water Intelligence, 27 Park End Street, Oxford OX1 1HU, UK. Tel: +44 865 204208, www.globalwaterintel.com
UÊ / iÊÕvÊ>Ài>ÊÜÊVÌÕiÊÌÊLiÊÌ iÊ>À}est market, with its rapidly growing population, depleted groundwater resources and the need for replacement capacity for old desalination plants. UÊ / iÊÕÃiÊvÊ`iÃ>>ÌÊÃÊ}ÀÜ}ÊÊ the Mediterranean countries – notably Morocco, Algeria, Tunisia and Spain. UÊ / iÊÕV«>Ê>ÀiÌÊÊÌ iÊ1-ÊÃÊ expected to grow, with more communities favouring desalination. UÊ >Ê>`Ê`>ÊLÌ ÊiÝ«iÀiViÊ>VÕÌiÊ water shortages and have the two largest populations in the world. Together with rapid industrialisation they require huge volumes of water. Both are constructing desalination plants. UÊ 7>ÌiÀÊÃÌÀiÃÃÊÃÊV>ÕÃi`ÊLÞÊÌi`ÊvÀiÃ Ê water supplies and in many parts of the world water usage exceeds renewable water capacity. UÊ ÀÕ`Ü>ÌiÀÊÃÕ««iÃÊ>ÀiÊvÌiÊÛiÀ exploited, while rising temperatures and declining annual rainfall have led to increased evaporation of surface water. Increasing industrialisation is also leading to higher incidents of water contamination.
American Water Intelligence, PO Box 684787, Austin, TX 78768-4787, USA. Tel: +1 512 961 5693 Global Water Intelligence, 80 Toh Guan Road, Waterhub, Singapore 608575. Tel: +65 6515 5016 NRG Expert (Europe, Middle East & Africa), 103 Latymer Court, Hammersmith Road, London W6 7JF, UK. Tel: +44 20 8432 3059, www.nrgexpert.com NRG Expert (Americas, Asia & Oceania), 59 Hoyle Avenue, Suite 100, Toronto, Ontario M4S 2X5, Canada. Tel: +1 416 840 5847
(GWI’s report includes a market and technology overview and provides forecast data by technology/system, by year and country, depicted in a series of charts and tables, and is available on CD-ROM. The latest water desalination market research report from NRG Expert includes coverage of mobile desalination plants, energy-recovery devices, waste management, desalination technology, the desalination market place and investment potential.)
Towards efficient use of water resources in Europe While most people living in Europe have historically been ‘‘insulated’’ from the social, economic and environmental impacts of severe water shortages, the balance between water demand and availability in parts of this region is reaching critical levels, says the European Environment Agency (EEA). Such water stress typically arises from overabstraction, together with periods of low rainfall or drought. Reduced river flows, lowered lake and groundwater levels and the drying up of wetlands are widely reported, alongside detrimental impacts on freshwater ecosystems. EEA’s report, entitled ‘Towards efficient use of water resources in Europe’, is the first in a series of thematic assessments that the agency is publishing to support discussion and development of the ‘Blueprint to safeguard Europe’s Water Resources’. It builds on earlier EEA reports describing the state of Europe’s water resources and the pressures they face (EEA, 2009, 2010a, 2010b and 2010c). It focuses on resource efficiency and
October 2012
describes the opportunities for more efficient water use and avoiding pollution across all sectors, while staying within sustainability boundaries.
Resource-efficiency measures According to the executive summary, the report highlights a range of resource-efficiency measures that can enable users at varying levels and in different sectors to reduce their water use and achieve more sustainable water management. It says that resource-efficiency measures in the urban and industrial areas often offer win–win situations, with technologies that cut water use also helping to reduce energy use (for example in drinking-water and wastewater treatment) and achieve more efficient chemicals use. Water utilities and water-intensive industries have an important role to play here. In some cases, however, measures to meet water or energy needs can create problems in the other sector. The energy intensity of
technologies like desalination necessitates more efficient water use and the development of renewable energy, says the report. There is also a need to address gaps in implementation of existing water legislation such as the Urban Waste Water Treatment Directive, the Drinking Water Directive and the Nitrates Directive, which are the basic measures for implementing the Water Framework Directive. Boosting resource efficiency in these areas should foster investments in the most advanced treatment and technologies – integrating water, energy and material-saving objectives. Contact: European Environment Agency, Kongens Nytorv 6, 1050 Copenhagen K, Denmark. Tel: +45 33 36 7100, www.eea.europa.eu
(‘Towards efficient use of water resources in Europe’, ISBN 978-92-9213-275-0, http://dx.doi.org/10.2800/95096.)
Membrane Technology
9
Reports highlight current and future trends in the desalination market Here we provide the key points from two recently released reports that highlight current trends in the desalination market and provide an insight into how this sector may develop in the future. Industry rather than municipal supply is now the strongest driver of the desalination market, according to a new report published recently by Global Water Intelligence (GWI), a UK-based firm that researches and publishes business data and information about the water markets worldwide. Since the financial crisis of 2008, the growth of the market for sea-water desalination to augment municipal water supply has slowed to a standstill, but the use of the technology among industrial water users is accelerating – with double-digit growth rates expected over the next five years – says the company. Desalination technology removes salt and other dissolved solids from water. It can be used to make fresh water from sea water, to polish process water to create ultrapure water for use in applications such as generating power and washing microchips, or to clean up hazardous wastewater streams, for example, flow-back water from fracturing activities in shale gas extraction.
Capital expenditure The report explains that between 2002 and 2007 annual capital expenditure on desalination infrastructure increased from $2.4 billion to $8.7 billion, but over the past two years, expenditure has struggled to clear $5 billion per year as the flow of large municipal projects in Spain, Algeria, Australia and the United Arab Emirates (UAE) has all but dried up. Water technology companies are increasingly looking for demand from industrial users to fill the gap. The company’s ‘Industrial Desalination and Water Reuse’ report suggests that capital expenditure on industrial desalination and water reuse technologies will grow from $2.8 billion in 2011 to $5.7 billion in 2017.
Emerging themes Amid a rising awareness of water risk, and of the role that water technology can play in increasing productivity, themes are emerging as 8
Membrane Technology
the main drivers of this market, and are summarised in the points listed below. UÊ Process water is needed for industrial development in countries such as India and China, and in the Middle East. Power generation and petrochemicals use more fresh water than all other industries put together, but the fastest growing economic regions also have the lowest natural endowment of fresh water. This is driving demand for sea-water desalination and water-efficient reuse technologies. UÊ / iÀiÊÃÊ>Ê}ÀÜ}Êii`ÊÌÊÌÀi>ÌÊÜ>ÃÌiÜ>ÌiÀÊ from unconventional oil and gas extraction. Shale gas, oil sands and coal bed methane all bring to the surface produced water that is heavily laden with dissolved solids. Desalination technologies enable these waste streams to be disposed of safely or reused. UÊ 7>ÌiÀÊÃÊÀiµÕÀi`ÊvÀÊ}Ê«iÀ>ÌÃ]ÊLÕÌÊ many of the world’s most significant mineral resources are in regions where water is scarce, such as Western Australia, Northern Chile and Southern Peru. In some places, conflict over water resources has brought mining projects to a halt. Desalination and water reuse technologies enable miners to have a zero impact on local water resources. UÊ >À}iÊÛÕiÃÊvÊ } ÞÊ«ÕÀiÊÜ>ÌiÀÊ>ÀiÊ used in the microelectronics market, and as the trend towards smaller line widths and larger wafers continues, it becomes essential to develop desalination technologies that can remove every single ion of dissolved salt from the process water. UÊ "Ì iÀÊ`ÕÃÌÀiÃÊv>V}ÊVÀi>Ãi`Ê`i>`Ê for desalination and water reuse technologies include the food and beverage, pharmaceuticals, and pulp and paper sectors.
Barrier to growth Christopher Gasson, publisher of the report, remarked: ‘Industrial water users are waking up to the fact that water could be the biggest barrier to their continued growth. If you are an oil produc-
tion company in Alberta, an oil refinery on Bohai Bay, China, a power generator in Gujarat, a copper miner in Peru or a semiconductor manufacturer in Taiwan, you are going to need to spend a lot of money on water technology in order to ensure you stay in business over the next five years.’ ‘There is a fixed amount of water in the world, but demand is growing, particularly in the emerging economies, and in the resourcerich economies that feed them. Developing new, fresh- water resources through desalination, and making the most of existing ones through water reuse, is the only way forward for many industries.’
Water wars Gasson continued: ‘People talk about water wars, but the bigger conflict at the moment is between different user groups within a single country.’ ‘Last year, for example, three people were killed in protests against Southern Copper’s Tia Maria mine in Peru because they thought the company was not doing enough to protect the water environment. It is very difficult for businesses to win a water war like that. In the long run, it is much cheaper to invest in the technologies that make the problem disappear.’ ‘The companies which stand to gain most from the growth in the market for industrial desalination and water reuse are Veolia, GE Water and Siemens Water. GE and Siemens both bought into the water technology sector in 2004, but they were never able to make much of the municipal market. Now they are very well placed for the action on the industrial side – as is Veolia, which has steadily built up an enviable industrial water portfolio over the past decade.’ ‘Other companies to watch are Aquatech International, which has a strong membrane and thermal desalination portfolio; forward osmosis specialists Oasys Water and HTI; Memsys, which has a novel membrane distillation system; and Japanese ultrapure water specialists such as Kurita, Organo and Nomura Micro Science. Some of the mainstream
October 2012
FEATURE sea-water desalination companies like IDE, Abengoa and Acciona are also making the transition to industrial desalination successfully.’
Declining costs Once considered too expensive to use on a large scale, the cost of desalinated water has declined, says NRG Expert, an energy intelligence and market research publisher with offices in London, UK, and Toronto, Canada. This is because of technological advances, improvements in energy efficiency and an increase in the lifetime of desalination plants. NRG Expert says that: UÊ global capital expenditure on new and replacement desalination plants is expected to grow from $6 billion in 2010 to $18 billion in 2015; UÊ LÞÊÓä£xÊ"ÊEÊ ÊÜÊ}ÀÜÊvÀÊfÇ°£ÊLlion to $16.3 billion – mostly from the private sector; UÊ VÕÀÀiÌÞÊÌ iÀiÊ>ÀiÊÛiÀÊ£xÊäääÊÜ>ÌiÀÊ desalination plants in over 100 countries worldwide; and UÊ ÛiÀÊÈxÊÊÐÊ«iÀÊ`>ÞÊvÊÜ>ÌiÀÊ`iÃ>nation capacity is currently in operation and over 71 million m³ per day is contracted. As the price of water desalination is falling – and may be equal to freshwater extraction
in 2020 – it is becoming more appealing to government decision-makers, says the company. Key points from its recently released study ‘Global Desalination Report’ are listed below.
Contacts: Global Water Intelligence, 27 Park End Street, Oxford OX1 1HU, UK. Tel: +44 865 204208, www.globalwaterintel.com
UÊ / iÊÕvÊ>Ài>ÊÜÊVÌÕiÊÌÊLiÊÌ iÊ>À}est market, with its rapidly growing population, depleted groundwater resources and the need for replacement capacity for old desalination plants. UÊ / iÊÕÃiÊvÊ`iÃ>>ÌÊÃÊ}ÀÜ}ÊÊ the Mediterranean countries – notably Morocco, Algeria, Tunisia and Spain. UÊ / iÊÕV«>Ê>ÀiÌÊÊÌ iÊ1-ÊÃÊ expected to grow, with more communities favouring desalination. UÊ >Ê>`Ê`>ÊLÌ ÊiÝ«iÀiViÊ>VÕÌiÊ water shortages and have the two largest populations in the world. Together with rapid industrialisation they require huge volumes of water. Both are constructing desalination plants. UÊ 7>ÌiÀÊÃÌÀiÃÃÊÃÊV>ÕÃi`ÊLÞÊÌi`ÊvÀiÃ Ê water supplies and in many parts of the world water usage exceeds renewable water capacity. UÊ ÀÕ`Ü>ÌiÀÊÃÕ««iÃÊ>ÀiÊvÌiÊÛiÀ exploited, while rising temperatures and declining annual rainfall have led to increased evaporation of surface water. Increasing industrialisation is also leading to higher incidents of water contamination.
American Water Intelligence, PO Box 684787, Austin, TX 78768-4787, USA. Tel: +1 512 961 5693 Global Water Intelligence, 80 Toh Guan Road, Waterhub, Singapore 608575. Tel: +65 6515 5016 NRG Expert (Europe, Middle East & Africa), 103 Latymer Court, Hammersmith Road, London W6 7JF, UK. Tel: +44 20 8432 3059, www.nrgexpert.com NRG Expert (Americas, Asia & Oceania), 59 Hoyle Avenue, Suite 100, Toronto, Ontario M4S 2X5, Canada. Tel: +1 416 840 5847
(GWI’s report includes a market and technology overview and provides forecast data by technology/system, by year and country, depicted in a series of charts and tables, and is available on CD-ROM. The latest water desalination market research report from NRG Expert includes coverage of mobile desalination plants, energy-recovery devices, waste management, desalination technology, the desalination market place and investment potential.)
Towards efficient use of water resources in Europe While most people living in Europe have historically been ‘‘insulated’’ from the social, economic and environmental impacts of severe water shortages, the balance between water demand and availability in parts of this region is reaching critical levels, says the European Environment Agency (EEA). Such water stress typically arises from overabstraction, together with periods of low rainfall or drought. Reduced river flows, lowered lake and groundwater levels and the drying up of wetlands are widely reported, alongside detrimental impacts on freshwater ecosystems. EEA’s report, entitled ‘Towards efficient use of water resources in Europe’, is the first in a series of thematic assessments that the agency is publishing to support discussion and development of the ‘Blueprint to safeguard Europe’s Water Resources’. It builds on earlier EEA reports describing the state of Europe’s water resources and the pressures they face (EEA, 2009, 2010a, 2010b and 2010c). It focuses on resource efficiency and
October 2012
describes the opportunities for more efficient water use and avoiding pollution across all sectors, while staying within sustainability boundaries.
Resource-efficiency measures According to the executive summary, the report highlights a range of resource-efficiency measures that can enable users at varying levels and in different sectors to reduce their water use and achieve more sustainable water management. It says that resource-efficiency measures in the urban and industrial areas often offer win–win situations, with technologies that cut water use also helping to reduce energy use (for example in drinking-water and wastewater treatment) and achieve more efficient chemicals use. Water utilities and water-intensive industries have an important role to play here. In some cases, however, measures to meet water or energy needs can create problems in the other sector. The energy intensity of
technologies like desalination necessitates more efficient water use and the development of renewable energy, says the report. There is also a need to address gaps in implementation of existing water legislation such as the Urban Waste Water Treatment Directive, the Drinking Water Directive and the Nitrates Directive, which are the basic measures for implementing the Water Framework Directive. Boosting resource efficiency in these areas should foster investments in the most advanced treatment and technologies – integrating water, energy and material-saving objectives. Contact: European Environment Agency, Kongens Nytorv 6, 1050 Copenhagen K, Denmark. Tel: +45 33 36 7100, www.eea.europa.eu
(‘Towards efficient use of water resources in Europe’, ISBN 978-92-9213-275-0, http://dx.doi.org/10.2800/95096.)
Membrane Technology
9