Volume 44 Number 12
World Spotlight: Water Scarcity & Population Boom Offset High Prices in Asian Desalination Market
Already the linchpin behind water production in many regions of the Middle East and the United States, desalination is increasingly being touted as a panacea for the world water crisis in the 21st century.
Across Asia, pressure on water resources, constituted by over-extraction, mismanagement and unnecessary pollution -- as well as droughts -- is exacerbated by the continent’s limited freshwater resources. From unparalleled droughts in Northern China to arsenic pollution in Bangladesh’s groundwater, the need for a safe and sustainable water supply becomes ever more apparent.
Facing the issues
Growth will further be galvanized by escalating demand -- due to explosive rates of population growth across Asia -- that accentuates the significance of safe freshwater resources for drinking, cooking, bathing and washing. A new study gives credence to the buoyancy of the Asian desalination plant market, which projected sales of seawater and brackish water desalination plants -- currently valued at $508.7 million -- to grow at a compound annual growth rate (CAGR) of 11 percent between last year and 2005.
Fresh is best
The municipal market is gathering momentum as prices fall, the technology becomes more user-friendly, and end-user confidence and understanding of desalination rise. One analyst pointed to price constraints as the most significant challenge confronting participants in the Asian desalination plant market.
“Although the potential for developing desalination may be high in some regions, the extent and extreme level of poverty in some countries is expected to delay market take-off. Most of the Indian subcontinent falls under this classification. This region boasts enormous potential demand for fresh water delivered through desalination plants; however, a lack of project funding remains a key stumbling block,” he comments.
“The market has seen some degree of funding from foreign bodies to provide small plants in the most dismally poverty-stricken regions; however, desalination is perceived as an expansive extravagance in comparison with alternative options to solve water shortages. Brackish water desalination equipment generally costs up to 50 percent less than its seawater counterpart. Compared to other potable water recovery techniques -- such as water recycling and reuse -- this is an expensive option.”
Getting the BOOT
Depending on its success, such a contract in Singapore -- scheduled to commence in 2005 -- represents the first large-scale desalination plant to be built in Asia and is set to become the benchmark for future projects. Ondeo, SembCorp Utilities, Tuas Power and Keppel FELS Energy submitted bids for the project -- set to produce up to 30 million gallons of water a day -- in early June.
Interaction is key
As the largest, most influential and most sophisticated regional market -- albeit on an equal par in terms of market size with Northeast Asia and the Indian Subcontinent -- Japan has spearheaded growth in the Asian market for desalination plants for the last four decades. Now other markets in the region are expected to become increasingly prominent and offer great opportunities to companies active in the desalination sector.
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