Early efforts at desalination, large-scale water filtration for drinking and other purposes began during the 1960s with Bahrain and Kuwait setting up the first plants, using the MED (multi-distiller effect) technology. During the mid-twentieth century, Kuwait became the first member of GCC (Gulf Cooperation Council) to use MSF (Multi-Stage Flash) distillation technology. The GCC represents a group of wealthy nation states with an increasing demand for freshwater. Desalination plants power both municipalities as well as businesses in the GCC. The contracted capacity of existing desalination plants is anticipated to increase over time. This is despite the fact that over 43% of all contracted plants around the world currently exist in GCC. As of 2013, almost 70% of the total global contracted and online capacity came from the GCC.As of 2015, the desalination market in GCC was worth USD X.X billion. The market size is expected to grow at a CAGR of XX.XX%.
The depleting natural precipitation and ground-water levels and increasing population are the major drivers of the sector in the region. A continued effort at increasing diversification of government income from hydrocarbons is another factor that has led to an increase in construction projects, industries, manufacturing plants, etc., leading to more demand for fresh water. Moreover, the government is supporting and encouraging the establishment of desalination plants to meet the nation’s demands.
Restraints and Challenges
The biggest challenge of desalination is the cost. As per a study, the cost of desalinated water per meter cube was USD 1.04, 0.95 and 0.82 for MSF, MED, and RO, assuming a fuel cost of USD 1.5/ GJ. Moreover, energy accounts for approximately three-fourths of the supply cost of desalination. Transportation cost is also added to the overall cost, making desalination a very costly process. Another negative impact of desalination is on the environment with the treatment of brackish water leading to pollution of fresh water resources and soil. Discharge of salt on coastal or marine ecosystems also has a negative impact.
The growing global outcry over climate change, majorly caused by the hype and awareness about the environmental effects of greenhouse gas emissions at the Global Climate Change Summit in Paris in 2015, has opened up large investment avenues in the desalination market in GCC. Many GCC countries intend to make desalination the source of 100% public potable water supply. Moreover, the nations are inviting more and more foreign investments in the region to keep up with the domestic needs that are continuously on the rise due to increase in the number of construction projects, manufacturing industries, etc.
About the Market
PESTLE Analysis (Overview): Macro market factors pertinent to this region
Market Definition: Main as well as associated/ancillary components constituting the market
Key Findings of the Study: Top headlines about market trends & numbers