Oct. 11, 2010 -- The US will be spending $3,330 million per year on building and operating desalination plants suggests a new report by Global Water Intelligence (GWI). This represents a 191% increase on current expenditure according to Desalination Markets 2010 (see www.desalmarkets.com) published this month.
The US currently has 2,324 million gallons per day of contracted desalination capacity, but this will rise to 3,434 million gallons per day by 2016. During that time the cost of operating existing plants and the new plants that come on line will rise to $1,302.9m, compared to $822.1m in 2010. This steep increase in expenditure on desalination is part of a global trend towards the development of alternative water resources in the face of growing scarcity.
The forecast is based on the timing of proposed desalination projects in the US, and expectations of increased demand for water as a result of urbanisation, economic growth, and increased irrigation. There are currently 43 medium and large desalination projects on the drawing board in the US.
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, forcing urban water users to develop new resources. Overall global desalination capacity is expected to grow from 18 billion gallons per day at the beginning of this year to 34.3 billion gallons per day by the end of 2016. Full details can be found at www.desalmarkets.com.
Christopher Gasson, editor of Desalination Markets 2010, commented: "The US invented the reverse osmosis desalination system, but it still struggles with the concept of actually building large scale seawater desalination plants -- almost all of the 2.3 billion gallons a day of contracted desalination capacity is for desalting inland brackish water.
"We have been tracking desalination projects in California for seven years, and during that time not a single large scale project has started construction in a meaningful way. It is not because they don't need the water or can't afford it, it is because there is not the political will to break the deadlock. But this will come, particularly now that Schwartzeneggar has cancelled the proposed water bond for the state. If pumping from the delta continues to be restricted, cities down the coast are going to have to look elsewhere for their water."
Desalination Markets 2010 also illustrates that after years of falling costs, the price of desalinated water has started to rise again. There has been considerable progress in reducing the energy consumption of desalination plants, which has brought down operating costs, but the cost of building new plants is rising. This is largely due to extra spending to protect the environment, and the cost of more energy efficient equipment, the report finds. Five years ago the benchmark price for a thousand gallons of desalinated water was around US$1.90 ($619/AF), but today the best plants struggle to deliver water for less than US$2.27 per thousand gallons ($740/AF).
Mr Gasson added "My guess is that the average price of seawater desal in the US will be closer to $1,500/AF than the sub-$1,000 levels enjoyed elsewhere in the world. Consumers in California will want to know that their water is made using the highest environmental standards, and that is going to cost a lot more than most water agencies in the state currently anticipate."
* Desalination Markets 2010: Global Forecast and Analysis The market forecasts in this report are based in part on an analysis of the 300 projects tracked by GWI in its Desalination Tracker each month, and in part on GWI's research into supply and demand for water in each country. The forecasts are completed by marrying up the capacity forecast with DesalData.com's cost calculator to put a dollar value on the expected market share. In total, 33 countries are profiled, showing key market indicators, waster sector structure, demand and supply of different water types and proposed plants and opportunities - along with 106 company profiles, a who's who of industry leaders and active participants.
The report can be purchased at Global Water Intelligence, price £1700. Contact Clair Blakeway, cblakeway[at]globalwaterintel.com tel: +44 1865 204208.
Further information:
Besides Desalination Markets 2010, Global Water Intelligence publishes the IDA Worldwide Desalting Plant Inventory (now in its 23rd edition), GWI magazine's Desalination Tracker (which provides updates on all major desalination projects worldwide), Water Desalination Report (a weekly newsletter for the desalination business) and DesalData.com (a complete information service for the desalination industry). Its market forecasting service is widely accepted as the most authoritative in this industry. See www.desalmarkets.com and www.globalwaterintel.com.
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