The Far East and India are facing challenges – growth in population number and density, and growth in industry – which threaten already tenuous resources. Zoe Grainge takes a look at this region and sees how desalination is being used to ensure access to clean water.
The state of play
The most recent statistics from the World Health Organisation put the number of people in the world without safe and clean drinking water at around 1.4 billion. The use of desalination as a potential solution to some areas suffering chronic water shortages became slowly more widespread throughout most of the twentieth century, and now, as technology has advanced, there is a momentum gathering behind it.
According to international market research company, Research and Markets, the global desalination industry would grow from 39.9 million cubic metres a day (m3/d) at the beginning of 2006 to 64.3 million m 3 /d by 2010 and 97.5 million m3/d in 2015. The expansion of this capacity will entail capital investment totalling $25 billion by the end of 2010, or $56.4 billion by the end of 2015. This means that, globally, desalination is more open to private sector participation than any other part of the water industry.
As well as water scarcity and industrial growth in countries like China, the falling cost of the desalination process has made it more feasible. Some 40 years ago, the cost of desalinated water stood at $10/m3 . Now, the average cost is around $0.47/m3 , although this varies widely depending on the region.
The situation in China
In the Asian Far East, there are a few countries recognised by the United Nations as having chronic water shortages. China, Japan, and India all have populations in so-called water stressed areas. In China, there are 300 cities suffering from water shortage. Desalination is looking more like a favourable option compared to the alternatives of distributing water around the country. Trans-regional water transfer involves project investment, operation fees, management fees, and losses like evaporation, seepage, river closure and pollution, as well as the occupation of large amounts of land.
Existing desalination in China
There are around 20 small desalination plants in China already. In 2006, market analysts Global Water Intelligence put the online installed capacity (including Hong Kong and Macau) at 380,000 m3/d. The forecast for desalination capacity for 20112-15 is 2.5 million m3/d. The size of the desalination project market (capex) was $55-70 million in 2006 and should reach $600-860 million in 2012-15.
There is political support in the shape of a plan produced in 2005 by the Chinese State Oceanic Administration, the State Development and Reform Commission, and the Ministry of Finance. This confirmed full central government support for the desalination industry. There has also been a requirement since 2004 that coal fired power plants being built in water stressed areas be prohibited from accessing groundwater and their use of surface water be controlled. This trend has spread to other industries such as chemical and petrochemical. This could mean that desalination growth be spurred on by large industrial developments.
However, the cost is still prohibitive in a country with a planned economy where water companies rely on public funds. The price of drinking water in China is around 1.5 to 2 Yuan per cubic metre, very low, and as a result water departments are loaded with debt burdens as the price severely deviates from the cost of water production. The price of desalinated water in China including water drawing, equipment, production, operation and management is around 4.5 to 8 Yuan per cubic metre. Yet, the country suffers economically and socially through water shortage, and given the nation’s fast industrialisation, desalination plants offer a solution.
Although the Chinese desalination market is small, foreign companies are invited to compete for project development contracts and the supply of membranes and other equipment. Although Chinese equipment manufacturers are catching up fast with foreign producers of desalination systems. Reverse osmosis is the dominant technology in terms of number of projects, but the planned capacity for the power and petrochemical sectors will mostly use MED. Nuclear desalination is likely to play an important role in China beyond 2010. The municipal markets for desalination are not evolving at the same pace as the industrial, but drinking water tariff reform is underway in cities.
Global Water Intelligence says in the next five years “the desalination sector will come of age as an industrial sector in China.” This will lead to accelerated sector growth, larger projects and service contracts.
The situation in Japan
Japan has a more advanced desalination industry, and is in a position to export its expertise to neighbouring countries.
In June 2005, the desalination plant in the Fukuoka District Waterworks Agency began operating. The plant provides drinking water capacity of up to 50,000m3/d, which is the largest in Japan. The plant technology is hollow fibre reverse osmosis.
Although distillation has been the most popular technology for desalination globally, particularly in the Middle East, reverse osmosis is catching up because of advances in the technology and reduction in cost.
In the Fukuoka plant an ultra-filtration membrane was adopted for the pre-treatment stage, and the newest reverse osmosis system was selected on a partial two-step design including a low pressure reverse osmosis process. This means seasonal adjustments to seawater changes can be made. The plant has an operating recovery rate of 60 per cent, one of the highest in the world.
In 2006, the Japanese government agreed to provide a desalination plant to the Polynesian nation of Tuvalu under its Grant Assistance for Grassroots Human Security Projects aid scheme. The plant should help alleviate the chronic water shortage of the island of Funafuti, which has a population of around 5000 people. The plant will have a capacity of 65 m3/d.
The situation in India
In 2005, the world’s first low temperature thermal desalination plant was opened in Kavaratti, one of the Indian Lakshadweep islands. It produces 100,000 litres a day of potable water. The Indian government said it expected production costs to decrease as capacity increased. There is widespread government support for desalination in India, with a pledge made two years ago to set up desalination plants with a capacity of 10 million litres a day on all islands and coastal areas. In India more than China, there is the opportunity for nuclear power plant desalination projects. The Nuclear Power Corporation of India already has a desalination plant catering to the needs of a 2000MW nuclear plant in Tamil Nadu.
Who is involved?
The large water companies Veolia and Suez are not significantly active in Asia. Although the companies have interests in the Middle East and Australia, neither has been able to yet move into the Far East with a headline project although both see this region as a growth area.
Jean-Marc Langard, head of marketing, Asia, at Suez-owned Degremont says; “There could be the possibility of Degremont moving into Taiwan, but at the moment there are no significant projects for us in Asia. The most water stressed areas of Asia are the north of China and the south of India, and these are not rich areas.”
The main sticking point in moving into these areas is the price of the output water, says Langard. “The Chinese government wants desalinated water to have a price of $0.5 m 3 . Currently, surface water has a price of around $1-2 m 3 . We can’t see desalinated water having that price unless the government provides some subsidies. The membranes on the plants that we’d use are not available in China, so key components of the plants would have to be imported. This makes the plant the same price as in the rest if the world.” This combined with the problematic energy consumption of desalination plants, and the overall cost to build far exceeds what could be recouped with a water price of $0.5 m 3 .
Langard says surface water will always be cheaper than desalinated water. “If you don’t have surface water, then you go for desalination,” he says. “The price of surface water treatment has not increased substantially in recent times.” Langard thinks one of the problems with water shortages is bad water management. He says around 70 per cent of water goes to agriculture, 20 -25 per cent to industry and 5-10 per cent to the population. Better water management is important for avoiding problems that arise from this.
Despite the company’s hesitation over the Asian market, Degremont has an office in Beijing and around 170 contracts in China for waste water processing in industry.
Black & Veatch
Earlier this year, US-based Black & Veatch opened a Global Design Centre for water in Singapore, and established a Centre for Excellence in Desalination. In December 2006, the company had announced its intentions to establish its already-existing Singapore office as a “key node” for its global water infrastructure business. As well as opening the door to contracts for the company, Black & Veatch has committed to investing in training its Singaporean staff.
Dan McCarthy, president and chief executive of Black & Veatch’s global water business said at the opening: “The Global Design Centre operates as a key part of our integrated global workforce. [we] are also seeing increasing use of desalination as a treatment process throughout the world. However, desalination is still constrained by high energy consumption and membrane lifespan. The Centre for Excellence in Desalination will focus on optimising the performance of plants and enhancing membrane life.”
Black & Veatch was involved on the design side for the one of the largest desalination plants in Asia, operated by Hyflux, in Singapore. Brought onstream in 2005, the $127 million SingSpring reverse osmosis plant in Tuas is capable of producing 30 million gallons a day, meeting 10 per cent of Singapore’s daily water needs at a potential selling price of $0.49 m3 .
Singapore is also experimenting with membrane distillation technology – a hybrid technique in which seawater is boiled and the vapour is passed through microfiltration membranes before condensation. This technology supposedly uses three times less energy than reverse osmosis, and cut could the salt content in seawater a thousandfold. Singapore hopes to build a large demonstration plant later this year.
Singapore-based Hyflux is a major investor in a multi-million dollar membrane and materials technology research and development centre in Singapore. The centre was officially launched in November 2004, and is the largest membrane and materials technology centre in Asia outside Japan. The facility focuses on research applications aimed at spearheading the development of cutting edge technologies in water and environmental engineering solutions. The research includes the development of hollow fibre membranes and modules, including flat sheet membranes; the development of various types of novel membranes with different configurations; and new applications for membranes used in environmentally friendly solutions by industries.
As well as the SingSpring desalination plant in its home country, Hyflux has contracts to build desalination facilities in Tianjin and Ningxia in China, and also in Dubai.
The SingSpring desalination plant in Singapore came to be built because of diplomatic rows over Singapore’s dependence on neighbouring Malaysia for fresh water piped into the country. Singapore objected to the hike in price Malaysia put on the water, triggering the development of the plant to ensure a degree of sustainability. However, commentators in the region have suggested the most recent output of the desal plant at a mere 10 per cent of capacity due to political agreements reached in the price of surface water coming from Malaysia. So desalinated water once again suffers because of its uncompetitive price.
On the fringes of Asia, Degremont’s reverse osmosis desalination plant in Perth, Australia, is claimed as the largest in the southern hemisphere. Coming onstream in April 2007, the plant is 45 gigalitres a year and provides 1.5 million people with water. It supplies 130 million litre of water a day. Degremont has the contract for 25 years. The scope of works consists of seawater intake, pre-treatment, reverse osmosis desalination, drinking water and pumping station in Kwinana, south of Perth.
Is desalination just too expensive?
Expensive water prices and large energy consumption makes desalination a daunting prospect for companies operating in Asia. As Jean-Marc Langard from Degremont points out, the plants could be as expensive to build, or more so, than anywhere in the world and the cost surface water will nearly always be cheaper. It’s clear unless regional governments provide subsidies, large scale desal plants for local populations simply may not happen in great numbers in areas where they are needed most. However, as industry grows in China and India, desalination projects for process industries may be viable as environmental regulations get slowly more stringent in these countries. China’s own research estimated that their industry lost $24.7 billion in output value annually from 2001 to 2005 due to water shortages. This guarantees it a certain amount of political goodwill, but whether that goodwill could be translates into funds for projects and subsidies, remains to be seen