Abstract
The global desalination industry is set to grow from 39.9 million m3/d at the
beginning of 2006 to 64.3 million m3/d in 2010, and to 97.5 million m3/d in
2015. This represents a 61% increase in capacity over a five-year period, and
a 140% increase in capacity over a ten-year period. The compound annual growth
rate of installed capacity is around 9%. The compound annual growth rate of
the market for new capacity is around 13%. ⇒ Chapter 4
This expansion of capacity will entail capital investment totalling $25
billion by the end of 2010, or $56.4 billion by the end of 2015. On current
trends, it is expected that more than half of this capital will come from the
private sector. This means that desalination is more open to private sector
participation than any other part of the water industry. Desalination is also
the most hi-tech and therefore the most international part of the water
industry. ⇒ Chapter 4
The increase in capacity entails increased operating expenditure. This is
expected to rise from $6.5 billion in 2006 to $9.9 billion in 2010, and to
$14.8 billion in 2015. This suggests a total market value of $66 billion
between the beginning of 2006 and the end of 2010, and a total market value of
$126 billion by the end of 2015. The current annual value of the market
(including capital and operating expenditure) is in the region of $10.9
billion. These figures do not include the cost of capital. ⇒ Chapter 4
The main driver of the growth of the market for desalination is increased
water scarcity around the world. Scarcity is a function of growing demand for
water in situations where there is limited availability of natural renewable
resources. Water scarcity is exacerbated by population growth in areas of
limited natural resources such as the Gulf region, southern Spain and the
south west of the United States. Global warming has no predictable impact on
overall scarcity, although it is believed to increase the risk of both floods
and droughts. Water resources agencies must plan for these eventualities.
⇒ Chapter 2
With a cost of around $0.55/m3, desalination remains an expensive solution to
scarcity, in comparison to most existing water resources. However, as cheaper
alternatives to desalination become fully exploited, desalination is
increasingly becoming the next cheapest solution to water scarcity. It is
acknowledged that two cheaper alternatives remain largely underexploited:
water reuse and the reallocation of resources away from the agricultural
sector. The treatment of wastewater to potable standard is a cheaper process
than desalination, but the requirement that such water should only be used for
non-potable applications means that reuse projects often entail significant
investment in secondary distribution systems. The reallocation of water away
from agriculture could potentially eliminate the need for desalination
altogether, however in most countries it is politically unfeasible. ⇒
Chapters 2&3
Historically, the growth of the desalination industry has been seen to have
been driven by the falling cost of the process, from more than $10/m3 40 years
ago to a low price of $0.47/m3 today. This continuous downward trend cannot be
expected to continue uninterrupted in future, however. With an energy
consumption of 4.5kWh/m3 of product water (at a price of $0.05/kWh), energy
costs represent around 50% of the total cost of reverse osmosis desalination.
The greatest challenge for the industry is to increase the energy efficiency
of the process faster than the price of generating electricity from fossil
fuels rises. ⇒ Chapter 1
Over the period of the forecast, the following trends will be observed:
Membrane desalination will gradually take market share from thermal
desalination: reverse osmosis (and electrodialysis) currently represent
around 60% of the market. This will increase to 65% of the market by 2015.
⇒ Country chapters & chapter 4
Multiple effect distillation will take market share from multi-stage flash
technology within the thermal desalination sector. MED currently accounts
for 24% of thermal desalination. It is expected to account for 37% of the
thermal market by 2015. Large power and water projects in the Gulf region will
be the main driver of demand for thermal desalination. ⇒ Country chapters
& chapter 4
The market for desalination outside the Gulf will grow slightly faster than
the market in the Gulf. The Gulf desalination market represents 46% of
existing capacity, but it will make up 42% of new capacity built by 2015.
Although scarcity may be growing more quickly in other parts of the world, new
desalination markets such as China, the US and India have yet to develop the
political and financial models to deliver large-scale desalination projects
within a reasonable timeframe. ⇒ Country chapters & chapter 4
There will be a trend towards larger plants in both thermal and membrane
desalination. This reflects growing needs and economies of scale. Seawater
desalination will grow faster than brackish water desalination. ⇒ Country
chapters & chapter 4
Beyond 2015, the rate of growth in the industry is expected to accelerate, as
large markets such as the US, China and India will by then have established
the financial and political models to pursue large-scale desalination
projects. The rate at which the installed capacity increases is expected to
move into double figures, and the annual increment to capacity is expected to
increase by an average of more than 15% between 2015 and 2020.
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