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Mon 24 Aug 2009 04:00 AM

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Water’s power

The close connection between water and power means technology choices need to be made carefully.

Water’s power
Solar thermal power frequently needs a desert location, as well as plenty of water.
Water’s power
Water treatment technology presents a number of opportunities for regional businesses.

The close connection between water and power means technology choices need to be made carefully.

Water and energy are shackled together in the Middle East. Desalinated water from combined power generation and desalination facilities is the primary source of supply in GCC countries. Water is also a crucial component in energy production. These facts make successful water treatment and reuse an essential conservation measure.

While sensible use of water in the region sounds like an easy step toward effective water conservation, the taking of it has proved elusive. Population growth, a broadening industrial base and urbanisation have all had an impact on consumption and waste. This has left a number of Gulf countries almost totally reliant on sea water desalination for fresh water supplies.

Issues of scarcity have primarily been addressed through an increase in supply. Demand management, sectoral allocation and punitive pricing techniques could all help encourage more cautious consumption. These same market manipulation techniques could also accelerate the adoption of water treatment technologies.

Market prospects for water treatment technologies remain strong, thanks to governments in GCC countries exhibiting strong political will to continue investment in important infrastructure projects. Environmental and health hazards related to the disposal of untreated effluent, marine pollution, and deteriorating ground water quality are some of the issues that need to be dealt with. Though these influences have been overshadowed by short-term economic concerns, analysts expect them to positively influence market dynamics from 2009 to 2013.

Individual actions make an incremental difference, but the most potential for change lies with the industrial sector. Here, the right technology selection now could have a massive impact on the future.

Carbon versus water

Carbon has been top of the green agenda for years and the need to reduce emissions has dominated public debate, especially around clean energy production. But the singular focus on carbon has distracted from energy's growing impact on dwindling water sources, according to a report from Lux Research.

The report, Global Energy: Unshackling Carbon from Water, observes that while new energy sources and extraction methods may reduce carbon intensity - kilograms of CO2 emitted per kilowatt-hour (kWh) of useful energy - they often impose increased water usage. It begs the question: have we become too focused on CO2 at the expense of water conservation?

"In short, yes, although water is stating to get on the radar," said Michael LoCascio, a senior analyst at Lux Research. "A case in point is biofuels and solar thermal, which are popular because they are touted as potential solutions to carbon induced climate change. However, biofuels consume orders of magnitude more water per unit of energy produced than conventional hydrocarbons and puts great stress tight water supplies in most of the agricultural regions around the world. It's just plain bad policy.

"Solar thermal, like coal, natural gas, or nuclear, generates electricity by boiler water and as such requires condensers. However, unlike conventional systems that may be located next to ample water supplies, solar thermal needs to be located in deserts, and because they are less efficient than natural gas it requires even more water. Fortunately the dry condenser technology is available, but at 10% to 15% relative efficiency penalty.

"Without a clear perspective on the trade-offs between carbon, water and other factors, executives risk making short-sighted business decisions, particularly if they are expanding into global economies like India or China where water is a comparatively rare resource."

According to Lux's report the energy horizon will continue to be dominated by coal and natural gas electricity sources in the near term. But the industry can expect to see more retrofits and upgrades of existing facilities, to make them more water and/or energy efficient. The report also anticipates that alternative energy sources will grow rapidly, but remain limited overall. The slow roll-out of transcontinental high-voltage DC transmission lines is expected to hinder low-carbon, low-water energy sources like solar and wind. Even advanced nuclear electricity, which may well be the most technologically secure answer, has water as its Achilles' heel."The original thesis of the report presumed that there was a fundamental tradeoff between CO2 footprint and water footprint, however after conducting the analysis that is not the case," said LoCascio. "There is also no firm fixed relationship between price and water intensity between technologies or within groups. Rather each technology has its own and somewhat independent relationship with cost, CO2 footprint and water footprint.

"It's basically a case-by-case basis, some technologies are awful on both a carbon and water footprint from but are cheap (coal), while others may be marginally better on carbon, but beyond awful for water and very expensive (biofuels). Renewables like wind and photovoltaic are good on water and carbon but are expensive and terribly unreliable."

Technology-based solutions are available, or being developed. These include boiler water treatments, such as electrocoagulation, advanced ion exchange and membrane electrolysis. LoCascio points out that the best way to reduce water consumption for electricity generation is to increase efficiency, by using combined cycles or gasifying coal first.

"Also, efficiency leaps are possible by increasing combustion temperatures allowed by new materials, coatings, and turbine cooling systems (the latter for natural gas), turbine and inlet cooling technologies and others," he said.

"There is also ample room for increasing the efficiency of nuclear plants by going to higher temperature designs such as fluidised bed reactors, or molten salt reactors."

The water opportunity

The water treatment opportunity in the region is huge. It has grown rapidly in recent years, which is both an indicator of its importance and the ready availability of the right technology. It is this technology that is opening the door to industrial-scale water conservation and reuse. The supply and maintenance of this technology represents a significant opportunity for businesses in the sector.

According to research from consultancy Frost & Sullivan, the GCC market for water and wastewater treatment equipment earned revenues of US $1.26 billion in 2008. Wastewater applications generated revenues of US $952 million, cornering 75% of the market. Frost & Sullivan estimate that around 60% of the market is from the municipal sector, which includes the real estate or commercial market as well. While the economic slowdown of recent months will have an impact on this growth, it is not expected to greatly curtail activity, as the market and reaches US $1.87 billion in value by 2013.

"The way the water and wastewater sector will shape up over the coming years depends upon many factors, of which the economic slowdown is just one," said Vivek Gautam, an analyst with Frost & Sullivan. "Concerns about climate change and health hazards associated with disposal of untreated sewage are forces that can't be neglected. All of these are expected to push wastewater recycling and reuse in the region."

Gautam predicts that companies that invest in technology innovation and introduce cost effective products will have the advantage in market place.

"In recent times market growth has been fuelled by investments across various sectors of the economy," he said. "In the current scenario all market participants are facing an environment of subdued market demand. Decline in investments has adversely affected the demand for water and wastewater treatment equipment. The market today is a buyer's market."

Gautam sees consumables, such as scale inhibitors and membrane antiscalants as important in a water treatment company's portfolio, if they are to prosper during this period. For medium to large companies the key lies in increasing their recurring revenues by aggressively targeting operations and maintenance services or annual maintenance contracts. However, there are still notes of caution to be observed.

"The market is fraught with challenges in spite of its immense opportunities," says Gautam. "The complex business environment, slow decision making process, and customer preference for low cost solutions, regardless of performance, makes it difficult to penetrate the market."

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