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Solar energy, increasingly cheaper, 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 supplying drinking water to some of the driest areas of the world.
The logic of desalination is clear. Water is becoming increasingly scarce as Populations are growing and climate change is affecting. More than half of the world’s population already suffers from severe water shortages for at least part of the year, according to the World Health Organization. This confronts users against each other, as in the most recent drought in Spain.
Desalination takes advantage of a nearly infinite resource: about 97 percent of the world’s water is found in seas and oceans. Costs have plummeted. The oldest thermal plants, which used heat to convert salt water into steam, supplied drinking water at more than $3 per cubic meter.
Since then, reverse osmosis technology, in which water is pushed through a membrane to remove salt, minerals and impurities, has taken over. Building plants costs less: perhaps $400 million to purify 500,000 cubic meters a day, says GWI’s Christopher Gasson. Including installation, return on capital and operating costs, that translates to $0.30 per cubic meter of water.
Newer plants also need less energy (2.6 kWh per cubic meter) and are increasingly powered by cheap solar plants. The cheapest plant in the world obtains energy at $0.025 per kWh, or $0.07 per cubic meter. Adding all this together explains how the Hassyan project in Dubai has promised desalinated water at just $0.37 per cubic meter. For reference, the price of drinking water in London is £1 per cubic meter.
At this level, desalination becomes more affordable for dry coastal areas, not only in the Middle East but also in Egypt, Algeria and Morocco, countries that are building new plants.
Desalination has also become cheaper than building new infrastructure to transport water over long distances: the limit is about 500 kilometers, according to Acciona, a major operator. As a result, the new plant market is expected to grow by perhaps 8 percent annually between now and 2030.
Of course, desalination is still unlikely to be the answer to most of the global water crisis. Many areas of the world only face temporary or occasional water shortages, spreading the capital costs of infrastructure over a much smaller volume of water. Agriculture, which accounts for 70 percent of global consumption, needs cheap water to grow affordable crops.
Yet despite all this, pioneers in the desalination sphere, including Saudi Arabian powerhouse ACWA, Spain’s Acciona and France’s Veolia, have a clear advantage in a competitive race.