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Ever-cheaper solar power is a tailwind for the global energy transition. It can make energy intensive technologies more affordable. As a result, desalination is becoming a more popular option for providing drinking water to some of the driest areas of the world.
The logic of desalination is clear. Water is increasingly scarce as populations grow and climate change bites. Already, more than half of the global population experiences severe water scarcity for at least part of the year, says the World Health Organisation. This pits users against each other, as in Spain’s most recent drought.
Desalination taps an almost infinite resource — some 97 per cent of the world’s water is in seas and oceans. Costs have plummeted. Older, thermal plants, which used heat to turn salt water into steam, delivered potable water at more than $3 per cubic metre.
Since then, reverse osmosis technology — in which water is pushed through a membrane to remove salt, minerals and impurities — has taken over. Plants cost less to build — perhaps $400mn to purify 500,000 cubic metres per day, says Christopher Gasson of GWI. Including installation, a return on capital and operating costs, that translates to $0.30 per cubic metre of water.
Newer plants also need less energy — 2.6KWh per cubic metre — and are increasingly powered by cheap solar plants. The cheapest plant in the world gets energy at $0.025/KWh, or $0.07 per cubic metre. Put that together and it explains how the Hassyan project in Dubai has promised desalinated water at just $0.37 per cubic metre. For reference, drinking water in London is priced at £1 per cubic metre.
At this sort of level, desalination becomes more affordable for dry, coastal areas, not just in the Middle East but also in Egypt, Algeria and Morocco, which are all building new plants.
Desalination has also become cheaper than building new infrastructure to transport water over long distances: the cut-off is roughly 500km according to Acciona, a major operator. As a result, the market for new plants is expected to grow by perhaps 8 per cent a year from now to 2030.
Of course, desalination is still unlikely to be the answer to the bulk of the global water crisis. Many areas of the world only face temporary or occasional water shortages, which spreads the capital costs of infrastructure over a much smaller volume of water. Agriculture, which accounts for 70 per cent of the world’s consumption, needs cheap water to produce affordable crops.
Yet, for all this, early movers in the desalination sphere, including Saudi Arabia’s ACWA power, Spain’s Acciona and France’s Veolia, have a clear advantage in a competitive race.
camilla.palladino@ft.com
