The fall in oil price may be forcing Royal Dutch Shell to slash investment by $15bn over the next year three years, but it shouldn't impact operation costs or a drive a new uptake in thermal desalination plants ...
Falling oil prices won't impact thermal desalination projects
The fall in oil price may be forcing Royal Dutch Shell to slash investment by $15bn over the next year three years, but it shouldn't impact operation costs or a drive a new uptake in thermal desalination plants, according to an industry expert and past president of the International Desalination Association (IDA).
A 60% decline in the price of crude since June, slipping to below $50 – its lowest since March 2009 – has had huge implications for the oil industry.
As prices tumble, oil giants BP and ConocoPhillips will be cutting over 500 jobs in the North Sea, Reuters reported this year.
In the US, oil-related revenues contribute $1.2 trillion to the nation's GDP and support 9.3 million permanent jobs. However, the number of drilling rigs operating in the US is reportedly to be 1,019, the fewest since July 2011. Since October, the number of rigs has dropped by 35%.
With energy utilities being prompted by treasuries to pass on the fall in oil prices onto consumer bills, it raises the question of whether potential energy savings will be seen in water processing?
With drinking water and wastewater systems accounting for 3% to 4% of national energy consumption in the US, electricity-related operational costs are one expense in which utilities would welcome a saving.
However, for the UK market, with price limits being fixed for five-year periods by industry regulator Ofwat, any immediate energy saving would not be passed onto consumers.
Chloe McIvor, corporate affairs executive at Water UK, a body representing UK water utilities, told WWi (Water & Wastewater International): "Unlike energy, water charges are tightly regulated with price limits set every five years after a thorough review of all the costs and required investment of providing water and sewerage services."
Utilities Thames Water and Southern Water were unavailable to comment on the issue.
During a WWi LinkedIn group discussion, one contributor said that with oil price nearing $50 a barrel, "thermal desalination may make a graceful comeback".
Responding, Dr Corrado Sommariva, former president of the IDA and managing director, ILF Engineering Middle East, told WWi: "Thermal desalination plants have a useful life of 40 years…A temporary decrease of oil is irrelevant in the economic evaluation of the technology which should be done considering oil prices in average for the next 20 to 40 years."
In 2012, for seawater desalination installed membrane capacity was 29.4 million m3/day compared to 23.2 million m3/day for thermal technologies, such as MSF (multi-stage flash) or MED (multi-effect distillation). Sommariva added: "The fact that oil is cheaper does not mean that we should burn it forgetting the latest commitments we made towards sustainability, especially the IDA task force.
"Thermal plants as they stand now consume five to eight times more power. Therefore I am not sure how they could gracefully come back.
"Regarding CAPEX - even at the low energy price of today the energy costs allocated to the destination plants is still a fraction of the real cost and remains heavily subsidized. The main contributor to the water tariff therefore remains still CAPEX…Again I believe it is difficult to forecast a comeback."
Industry analyst David Lloyd Owen, managing director of Envisager Consultancy, added that "there is no hard evidence that the oil price change will last more than one to three years".
Speaking to WWi, he said: "The design, finance, build and get ready to operate times for a thermal plant must be three to five years, so we'd need a long-term change in the price of oil.
"Lower cost RO may impede (for the time being) the development and deployment of new low energy desalination approaches. For now, the cost gap between conventional water and desalinated will be smaller, which may encourage heavier use of desalination plants."
Saudi Arabia aims for 100% reuse in small cities by 2025
Saudi Arabia aims to increase water reuse to more than 65%by 2020 and over 90% by 2040 by transforming its existing and planned wastewater treatment assets into source water suppliers across all sectors.
Valued at over US$4.3 billion, the kingdom's water reuse market is the third largest in the world, according to a new white paper from GE. Over US$66 billion in long-term capital investments have been committed for water and sanitation projects in the kingdom in the next 10 years, while the government aims to achieve 100% reuse of wastewater from cities with 5,000 inhabitants or more by 2025.
The white paper highlights the water reuse patterns in the kingdom with agriculture accounting for the highest, followed by landscaping, industries and recreational purposes. Water reuse is expected to increase at a compound annual growth rate of 4% from 2,367 million m3/day to 5,834 million m3/day in 2035.
Water reuse is promoted in the kingdom through governmental decrees as well as the active participation of the private sector. The 9th Development Plan aims to increase treated wastewater reuse to 50% as one of its key goals. A new water law establishes a Supreme Council for Water Affairs and an independent regulator for water resources and water services and creates a water management department at the Ministry of Water & Electricity, which are among the projected policy goals in the sector for this year.
The first recommendation from the white paper focuses on promoting education and outreach, to recognise awards and certification programs as well as information dissemination and educational outreach.
The white paper highlights how financial, regulatory and technical barriers to reuse can be overcome. It evaluates the scope of direct subsidies, pricing mechanisms and structuring water rights as policy option. As a result, said GE, mandates and regulations could restrict potable water to human and food-related uses. This is as well as encouraging utility companies to develop plans for recycled water.
Advanced hypochlorite system delivered in England In an effort to reduce risk from bulk storage of liquid chlorine, the Huntington Water Treatment Works in Chester, England - Europe's largest potable water brine electrochlorination plant - has received an advanced on-site hypochlorite generating system from Severn Trent Services. Six units were installed, each with a production capability of up to 680 kg/day of chlorine equivalent. Originally, the £35 million upgrade, part of a £3.6 billion investment, called for the construction of a new facility to store drums of liquid chlorine on site. An aternative process was identified to eliminate the need to store liquid chlorine.
Japan to help fund Vietnam WWTP capacity upgrade
A $130 million contract has been awarded by the Urban Civil Works Construction – Investment Management Authority of Ho Chi Minh City in the Socialist Republic of Vietnam for the expansion of a large-scale sewage treatment facility in the city.
A three-pronged consortium including Veolia subsidiary OTV, Hitachi and South Korean construction company POSCO Engineering & Construction will expand the city's wastewater treatment plant's capacity from 141,000 m3/day to 469,000 m3/day.
Funded by loan assistance from the Japanese government, the project aims to improve Ho Chi Minh City's urban and domestic sanitation. As the largest city in Vietnam, Ho Chi Minh City has seen its volume of industrial and domestic wastewater surge in step with rapid industrialisation and urbanisation.
The expanded capacity would be sufficient to meet the wastewater treatment needs of approximately 1.4 million people. A ground-breaking ceremony for the plant was held in February.
The expansion project in Ho Chi Minh City is the second large-scale project awarded to OTV and Hitachi, following orders received in 2014 for a 199,000 m3/d desalination plant and pre-treatment facilities in Basrah, Iraq.
Over half of India faces high to extremely high water stress
With 54% of India's total area facing high to extremely high stress, almost 600 million people are at higher risk of surface-water supply disruptions.
Data from World Resources Institute (WRI) has said that India is one of the most water-challenged countries in the world: groundwater levels are falling, available water is often polluted, and the national supply is predicted to fall 50% below demand by 2030.
A map from the Institute showed competition between companies, farms and people for surface water in rivers, lakes and streams. Data showed that 40% of the annually available surface water is used every year.
Groundwater levels are also declining across India. Of the 4,000 wells captured in the India Water Tool (IWT) 2.0 from WRI, 54% dropped over the past seven years, with 16% declining by more than 1 meter per year.
Among the IWT's 632 groundwater quality districts, only 59 are above BIS (Bureau of Indian Standards limits. Whenever a particular pollutant concentration exceeds BIS limits, drinking water is considered unsafe.
WRI said: "Tools like the India Water Tool may only be a first step in a long process of risk reduction and mitigation, but they are an essential one."
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