The Global Desalination Market

Christopher Gasson Global Water Intelligence

This presentation
The bad news: market forecast downgraded The good news: medium to long term picture looks good Market trends

What has changed

The Arab spring: project delays across North Africa La Nina: rains in Australia and California Weak economic recovery: US & Spain affected Gulf demand projections scaled back Trinidad politics turns against desal Natural resource sector demand increases China and India buoyant

The new market forecast

Capacity cut from 2011/12

Tracked projects

Capital expenditure

Capital expenditure trends

Operating expenditure

Good News
Still significant under developed markets Increased energy in the water cycle Changing precipitation patterns India and China Natural resource industries need water The long term picture is good

Undeveloped markets

Increased energy in the water cycle

Ocean water mass

Land water mass

Famiglietti et al., 2011, in prep

Changing precipitation patterns

Change in freshwater storage 2002-2010

Famiglietti et al., 2011, in prep

Food:Energy:Water Nexus

From just in case to core resource

There are two stages of desal demand: 1) Plants built to overcome temporary shortages 2) Plants built to meet day-to-day urban water needs The former are very difficult to build; the latter are easy. The water/food nexus will force the transition.

Israel case study

488l/c/d

182l/c/d

The top 10 markets

China
Desal is not a significant priority in China today Industrial strategy is not developed South North Transfer will quietly fail By 2018 China could start building plants with a capacity of more than 1Mm3/d Befesa, IDE, Aqualyng, & Hyflux are well placed

India
Both Chennai and Mumbai have increased their desal programmes from 200,000m3/d to 400,000m3/d in the past month. Like China, the local industry is very much focused on the power sector. It is very EPC led. Like China, tariffs are a problem Financial models may evolve

Oil and gas

Desal has a role to play in four areas: frac water treatment,
recycling in the tar sands, recycling produced water where disposal options are limited and low sal flood water production. It is a tough market to enter Minimising brine rather than cheap product water is the goal

Mining
There is currently 1.8 million m3/d of desal capacity on the drawing board in Chile, and 500,000m3/d proposed for Western Australia. Additionally desal is becoming the standard wastewater requirement in the sector, as firms implement global best practice for corporate social responsibility reasons GWI report on the market published next month.

Long range forecast

CAGR = 8% - 9%; Market value in 2025 = $25bn capex ($5.7bn in 2011)

Market trends
Competition is horrible: you lose if you win, and you lose if you lose - expect some departures BOT continuing to take market share from public finance There is still a shortage of operators UF is spreading in pretreatment, but it is not the silver bullet New RO technologies Modern Water and NanoH2O - are making headway Any technology dependent on waste heat is not Have we seen the end of MSF?

Thank you