Lower Rates Spur Desalination Market Boom | Fluence

In Israel and other arid parts of the world, rates for seawater desalination have dropped to $1/m3 or lower, spurring growth in the market.

IDA Water Security Handbook projects 2019 will be the best year ever for growth in seawater desalination, driven by lower rates

The current IDA Water Security Handbook projects that 2019 will be the best year ever for growth in the seawater desalination market, surpassing even what was seen in the late 2000s. It’s not surprising that desalination’s shrinking capital and operational costs are among the main drivers of the increase. The handbook is a publication of the International Desalination Association (IDA) and Global Water Intelligence (GWI).

The diminishing cost of producing desalinated water, in fact, has a long history as a driver of desalination’s adoption and growing acceptance worldwide. For instance, between the 1960s and the 1980s, the cost of multistage flash distillation (MSF) desalination, a thermal process, dropped by approximately 90%, with acceptance of the procedure growing as well. (As late as 2017, MSF rates for desalinated water dropped again by another 20% in some regions.)

Desalination Financing

Currently, 50% of desalination projects are contracted under the build-own-operate-transfer (BOOT) structure, and since 2010, 90% of contracted capacity has been for membrane process desalination such as seawater reverse osmosis (SWRO). 2019 is expected to be no exception, with membrane processes continuing to dominate the market. Thermal process desalination like MSF has been maintaining a niche mainly for large-scale projects in the Mideast.

The BOOT project financing model started to come into its own by the early 1980s, making modest SWRO plants possible in the Mediterranean and Caribbean. The first BOOT model Mediterranean SWRO plant contracts were awarded at $1.50-2.00/m³.

Desalination Rates

Over the past few decades, desalination rates have varied widely. The cost of powering desalination plants is the greatest variable in the process, and the cost of electricity can differ substantially from region to region.

  • Mediterranean: With the development of a more knowledgeable workforce and optimization of energy efficiency, one Mediterranean plant was producing at $0.74/m³ in 2001. In 2018, another contract was awarded at $0.51/m³. Development inn Spain in the 1990s culminated in contracts with rates of $0.20-0.36/m³. After an earlier false start, Algeria also launched an ambitious and well-structured build-out of 12 plants with rates as low as $0.57/m³.
  • Israel: With technological advances in Israel in the mid 2010s, the Askhelon, Hadera, and Sorek plants began producing desalinated water at the disruptive rates of $0.70-0.95/m³.
  • Asia and Australia: Singapore, Australia, India, and China are distinguished for their desalination infrastructure, although rate information is hard to come by for India and China. Chennai, India’s rate stands at $1.03/m³ and Quingdao stands at $0.71/m³. Singapore’s National Water Agency (PUB) is now contracted at a rate of $0.54/m³. The plant in Melbourne, in Australia, produces at a rate of $0.89 /m³.
  • Mideast Market: On the Mediterranean and Red Seas, SWRO plants operate with lowest rates between $1.06 and $1.32/m³, while multiple-effect distillation (MED) maintains a slight edge over SWRO rates in the Persian Gulf at $1.21-1.34/m³. Yet with 2018’s contracts, three new plants will desalinate at low rates of $0.55/m³, $0.52/m³, and $0.49/m³.
  • United States: Although the U.S. is not a world leader in overall desalination volume, RO desalination of brackish water is at one of the highest levels in the world. U.S. rates are outliers at $4-5/m³ because of higher development costs and longer approval periods.

Contact Fluence, a world leader in energy efficient desalination, for projects of all scales, from large-scale plants to Smart Packaged, decentralized units suitable for small islands and applications off the grid.