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Water Industry Segment Report Desalination

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Water Industry Segment Report Desalination WATER INDUSTRY SEGMENT REPORT DESALINATION San Diego, July 2012 Prepared by: Andreas Fried Basel Serio WORLD TRADE CENTER SAN DIEGO 2980 Pacific Highway San Diego, CA 92101 T: (619) 615 0868 F: (619) 615 0876 www.wtcsd.org General Provision This report was conducted by the World Trade Center San Diego (WTCSD). The scope of this report is to provide information about the water industry segment of desalination. The report will not be, and should not be, considered as an opinion regarding a recommendation for, or the reasonableness of any specific business action. No representations or warranties are provided with respect to the results obtained from use of the analysis or surveys of this report. In no event shall the WTCSD be liable for consequential, special, direct, or indirect damages arising out of use of this material. To the best of our knowledge and belief, the statements contained in this report are true and correct. Information, estimates and opinions provided to us and contained in the report were obtained from the sources cited, and to the extent analyzed by us are believed to be true and correct. However, no representation, liability or warranty for the accuracy of such items is assumed by or imposed on WTCSD. Opinions in this report are the author’s opinion, and are not the official opinion of WTCSD. WORLD TRADE CENTER San Diego – Desalination Industry Report Page 2 of 35 Table of Contents General Provision .................................................................................................................................... 2 Introduction ............................................................................................................................................ 4 Conversion Measures .......................................................................................................................... 4 Desalination ......................................................................................................................................... 5-6 Industry at the National Level .................................................................................................................. 7 Southern California ........................................................................................................................... 7-8 MENA Desalination Industry .................................................................................................................... 8 Power Sector ....................................................................................................................................... 8 Water Sector ....................................................................................................................................... 9 Middle East .................................................................................................................................. 10-13 North Africa .................................................................................................................................. 14-15 Small Scale Projects ........................................................................................................................... 15 Trade Shows - Domestic and International............................................................................................. 16 Trade Publications and Internet Sources ................................................................................................ 18 Current Desalination Projects ........................................................................................................... 19-33 Bibliography .......................................................................................................................................... 34 WORLD TRADE CENTER San Diego – Desalination Industry Report Page 3 of 35 Introduction This report is an introductory overview of the desalination (desal) industry. The report focuses on U.S. export to the MENA (Middle East and North Africa) region and India. Water scarcity is an acute and growing problem. Essentially the amount of naturally occurring fresh water in the world is constant – or even declining because of the over-exploitation of non-renewable ground water resources. Demand for water continues to grow as the need to increase agricultural production sucks up available water for irrigation (85% of MENA water use for agricultural use), forcing urban water users to develop new resources. Desalination has been favored as method to increase the water supply. The regional desalination sector has grown into an $8 billion market in the last 5 years. Historically, especially the Gulf (GCC) region has favored large scale projects to boost supply in favor of targeting the high demand and water waste.1 The financial crisis though has opened policymakers eye’s for alternative, less capital intense projects. Campaigns for reduced water usage have also been launched as a method for tackling the region’s water shortage and less affluent countries are looking at smaller-scale desalination projects. The attractiveness of desalination has been reduced due to rising oil prices, putting upward cost pressure on a water supply process that consumes large amounts of energy. Desalination today is an expensive technology, but most of the world's 2,000 desalination plants are currently located in the Middle East where water is in short supply but energy has been cheap. Albeit, the low-cost energy has been due to energy subsidies obtained by the mostly state owned utility companies operating desalination plants in the MENA region. Desal plants are frequently built in connection with power stations. The increase in electricity prices has actually recently spurred the power plant components of desal plants. The latest desalination trend is that the increase in energy prices has made it possible for bidders to increase the power plant component with increased excess power revenues, to subsequently ‘subsidize’ the desalinized water price offered in tenders. Firstly, this paper will look briefly at the desalination industry in general; secondly, we will examine current trends and forecasts for the industry per region. The paper concludes with useful tradeshow and resource information as well as a list of current desal projects. Conversion Measures 1 m3 = 220 Imperial Gallons (IG) 1 Ha = 2.47 Acres 1 IG = 0.0045 m3 1 Acre = 0.405 Ha 1 m3 = 264 Gallons (G) 1 Liter = 0.264 Gallons 1 G = 0.0038 m3 1 G = 3.785 Liters 1 IG = 1.2 G 1 IG = 4.54 Liters 1 http://www.gulfbase.com/site/interface/NewsArchiveDetails.aspx?n=98458 WORLD TRADE CENTER San Diego – Desalination Industry Report Page 4 of 35 Desalination Because only 1 percent of the Earth's water is fresh, the oceans are an obvious way of supplementing the fresh-water supply. To be potable (drinkable), however, salt and other chemicals must first be removed from the sea water. This process of salt removal known as desalination has been practiced since ancient times. The most common desalination processes used today are distillation and membrane processes, each accounting for about half the installed global desalination capacity. Historically, distillation technologies have dominated the seawater desalination market, partly because they lend themselves well to co-generation of water and power, partly because energy subsidies favored these more energy-intensive technologies, and partly because of the lower reliability of earlier membrane technologies. However, most new desalination plants now use membrane technologies, in particular reverse osmosis (RO). This is mainly due to reductions in the costs and the energy intensity of reverse osmosis, as well as improvements in its reliability. Reverse osmosis of seawater requires much less energy than distillation processes.2 Looking forward, it is clear that membrane desalination is going to continue to pull away from thermal desalination. Although multi-stage flash and multi-effect distillation represented around 26% of the market during the period 2000- 2009, their market share is expected to amount to around 9% in the period 2010-2016. This reflects two factors. First, the desalination market outside the Gulf is expected to grow faster than the desalination market in the Gulf region, where thermal desalination is more frequently used. Second, 2 The World Bank: Seawater and Brackish Water Desalination in the Middle East, North Africa and Central Asia WORLD TRADE CENTER San Diego – Desalination Industry Report Page 5 of 35 membrane desalination is making in-roads into the Gulf market – a trend which is likely to accelerate with the move towards independent water and power projects in Kuwait and Dubai, as well as greater consciousness about energy efficiency due to rising energy prices.3 Overall global desalination capacity is expected to grow from 68.3 million m3/d at the beginning of 2011 to 129.9 million m3/d by the end of 2016.4 For 2010 and 2011 though, new capacity is on the decline, with 4.7 million m3/d and 6.8 million m3/d respectively - well below the market peak of 7.5 million m3/d achieved in 2007. There are a number of factors behind the cooling of the desalination market. These include: The completion of major desalination plant building programs in Algeria, Spain, and Australia. The weakness of the real estate market in the UAE, Southern Spain and the Western U.S. Project delays and postponements related to a variety of issues such as elections, financing difficulties, heavy rains, and administrative issues.
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