The energy intensive process of desalination can make it more expensive than alternatives, though costs are predicted to fall over coming years. Energy issues can put pressure on countries aiming to become more energy efficient, and overcoming this issue can add to the cost of the process. The Thames Water desalination plant is to have solar panels installed, and Australian plants are powered by nearby renewable energy sources.
A Scientific American article highlights the environmental issues of desalination. The desalination process leaves a waste product of highly concentrated salt water which is often released back into the sea causing damage to marine ecosystems. The suction of water from the sea can also cause harm to marine wildlife, but this can be avoided and Australian desalination plants absorb water slowly enough to allow fish to escape.
An important aspect of water management into the future will be reducing demand for water, together with increasing supply. Agricultural, indusrial and domestic water usage will need to be reduced to overcome water scarcity. There are also other, less energy-intensive methods of increasing water supply such as the recycling of water, which is used in Australia, or more efficient extraction from groundwater reserves. The transportation of water from other sources may also be a more cost effective option for countries at a high altitude, or far from the sea.
Current Desalination Projects
The Middle East has large desalination programmes that benefit from dry conditions and a supply of oil for energy. Israel, Saudi Arabia and UAE are home to some of the largest plants,
Desalination plant in Taijin China
Impact on Water Investment Funds
Companies directly involved in desalination include Severn Trent, ITT Corporation, and Veolia which “has built 15% of the world's desalination capacity”. These firms are held by some of the funds in the Worldwise Investor Water theme, and although they have other operations, they are likely to benefit from desalination projects. If desalination becomes one of the major sources of freshwater then water costs may rise. Water shortages are expected to become more common over the coming years, with a UN report prediction that more than half of the world’s population will be at risk by 2030 as a result of climate change, population stress or water mismanagement. Desalination is likely to be an option for countries experiencing this water stress, and investment funds that have a stake in it could benefit.