The United Arab Emirates is the second largest country in Gulf Cooperation Council. The sum total of the country’s water resources falls short of its ever-growing requirements. More than 90% of its groundwater is saline. Only 2 freshwater aquifers remain. The infrequent and scarce rains that do occur are bound in by dams that prevent flash flood water from running into the sea. The country receives 78 mm/year of rainfall and loses much of its rain and surface water to evaporation. The total runoff the surface is estimated at 150 million m3. There are no perennial streams. This leaves the brackish ground and sea water as the only sources of water that can be accessed through desalination. As of 2013, the average per capita consumption of water by its population stood at 500 liters, 82% above the global average in 2013, putting further stress on the scarce resource. A total of XX million imperial gallons is derived from desalination for usage in the country. As of 2015, the desalination market in UAE 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.
Moves to diversify the economy and move away from the hydrocarbon dependent economy has resulted in a mere 25% reliance on oil for the country’s GDP. However, a corresponding increase in the number of industries, businesses, and the ensuing population has put a sizeable stress on the available water resources, implying a strong future growth in the desalination industry in UAE. Historically, all desalination plants have used oil, leading to high levels of greenhouse gases. A third of all greenhouses gases emitted by UAE come from desalination plants. This has led to an increased focus on renewable energy alternatives for the production of fresh water through desalination, opening up opportunities for desalination in the renewable energy sector.
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
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