With over 50 per cent of the world´s desalination production coming from six countries of the GCC, the Middle East is poised to face an uphill task for continued sustainable efforts at water conservation.
Most Arab countries fall under the arid and hyper-arid region category, which implies that they have 500 cu m or less renewable water per capita per year. At the ongoing rate of development in the GCC countries, water is undoubtedly the most prized natural resource. However, the future scenario doesn´t look encouraging, what with the increasing population and soaring temperatures that the countries have to contend with. Clearly, traditional means of water conservation and desalination are not enough and the governments of GCC countries are now looking at sustainable measures. And, this has given rise to a spurt of mega water projects in the region.
In spite of being top on the list of water-scarce countries, the GCC nations are among the highest in water consumption. Adding to this paradox is another ironic fact: Although the farming output in GCC countries has not made them self-sufficient, the agricultural sector is by far the biggest consumer of water, thanks to inefficient and traditional irrigation practices. Apart from the actual scarcity of usable water, the depleting quality of water is also a deep concern. Water deficit is a burden on the national budget and a serious impediment to socio-economic development.
According to John Abi-Hanna, Business Development Director, Black & Veatch Water, Middle East, ´The way people use water is a contributory factor. The GCC states have the highest per-capita water consumption in the world, which is startling for such an arid region. Statistics abound; here are a few that illustrate the situation. Residents in Qatar consume 675 litre of water per capita per day, about twice the average consumption of the European Union. Qatar´s per capita water consumption is over 12 times higher than the country´s available renewable water resources.
And Saudi Arabia is estimated to require almost 1 billion gallon a day of additional desalinated water capacity to meet demand and reserve margin needs by 2020.´
Meanwhile, Kshitij Nilkanth, Program Manager, Energy & Environment Practice, Frost & Sullivan, comments, ´Limited availability of freshwater and renewable resources, coupled with their large-scale exploitation, is widening the demand-supply gap. It should be noted that unsustainable extraction was highest in the Kingdom of Saudi Arabia, the United Arab Emirates (UAE) and Oman. Non-water policies, in particular, create incentives for inefficient water use in agriculture, which uses 85 per cent of the region´s water, and unsustainable pumping of groundwater, which is similarly encouraged in some countries by heavy energy subsidies.´
And Mibu John, Partner & Research Director, Ventures Middle East, says, ´On a per-capita basis, Saudi Arabia and the UAE consume 91 per cent and 83 per cent more water than the global average, and about six times more water than the UK, according to an analysis by Booz & Company. Qatar and Oman are also above the global average for water consumption.´
Plans on track
The key strategies for tackling the water deficit issue in GCC countries include recycling of waste-water and desalination of water. Apart from these efforts, there is a need to salvage depleting groundwater levels and avoid over-exploitation. In bid to address the water shortage issue, the governments have launched a number of mega projects in this sector.
As Abi-Hanna puts it, ´All GCC governments have ongoing and future plans for water projects. The largest market by far is Saudi Arabia. Capital investment will be made across the water cycle: Groundwater extraction and treatment; desalination; potable and industrial water transmission and distribution; and waste-water collection, treatment and reuse. Operations and maintenance opportunities will increase over time with utilities seeking to outsource these services. Water installations are key targets for privatization. Investment opportunities in IWPs and IWPPs are set to increase in all GCC countries.´
´In 2013, the Qatar General Electricity and Water Corporation (Kahramaa) has also made detailed plans to procure two more desalination plants to support the massive infrastructure boom in the country, both to be developed using private financing,´ informs John. While the utilities sectors are mainly responsible for such water projects, there has been a spurt in PPP as these projects involve high levels of expertise, finance and a bigger time span.
According to Ventures Middle East, these are the developments underway in GCC countries:
Kingdom of Saudi Arabia
Given the gravity of the water situation in the GCC countries, sustainable solutions have become the need of the hour.
´With proper treatment, seawater and waste-water can be reused for beneficial purposes such as drinking water, agricultural and landscape irrigation and industrial processes,´ elaborates John. ´Over 70 per cent of waste-water is reused in many GCC countries, and many of these countries are aiming for 100 per cent reuse of treated sewage effluent within the next few years.´
Abi-Hanna adds a different perspective: ´Utilities need partners with the technological understanding of, and experience in, waste-water recycling and unlocking waste-water streams´ potential as sources of renewable energy and nutrients. By viewing water and waste-water holistically, rather than as separate entities, business cases can be made to create resources that can also fund growing infrastructure needs.´
As water recycling is a cost-intensive process, governments of the respective GCC countries play a crucial role in the overall process. The water and waste-water treatment equipment market in the GCC was pegged at $1.3 billion in 2011 and is expected to reach $2 billion by 2016, growing at a compound annual growth rate (CAGR) of 7 per cent over the next five years, according to a Frost & Sullivan study. According to information provided by Ventures Middle East, Saudi Arabia has made significant changes to its water sector regulatory system to make it more investor-friendly. These changes have also enabled the creation of organizations such as the National Water Company, which is planning to invest $23 billion in Saudi Arabia´s sewage collection and treatment infrastructure over the next 20 years. The key to the success of a waste-water reuse programme is tertiary filtration, capable of consistently producing a high-quality effluent while enhancing the disinfection process - both chlorination and UV - and improving water quality.
Desalination - the process of separating salt and impurities from seawater to make it potable - has been crucial in bridging the water deficit of the GCC countries. Desalination plants line the coast of the Mediterranean and the Gulf, with output that sizes up to two-thirds of the world´s desalinized water. However, desalination is a highly energy-intensive process and therefore aggravates the energy problems of the region and at the rate of $1 per cu m of saltwater, it is also an expensive enterprise. When the remaining salt is thrown back into the sea, it affects marine life and causes environmental hazards. However, desalination is a viable solution to the raging water problem.
According to Nilkanth, ´Traditionally, thermal desalination technologies have been dominant in the Middle East owing to ease of access to fossil fuels. However, in the past decade, reverse osmosis technology has gained much loyalty among end-users. As economies look to reduce their dependence on fossil fuel and explore renewable energy sources, primarily solar, it is certain that solar desalination will be the way forward. However, its path is still unclear, as the two solar technologies, namely, solar photovoltaic and concentrated solar power, work best in land while we all know the source of desalination lies in the sea. In recent years, the market has seen anvil of new concepts, including forward osmosis, membrane distillation, tri-hybrid applications using nano-filtration and low temperature distillation, all aiming at energy-efficient desalination and lowering the energy footprint of plants.´
As the projects are long-term ones involving huge costs, contractors play a crucial role. Highlighting the expertise required from contractors in executing such projects, Abi-Hanna says, ´On projects in the GCC, we have served in multiple roles: From technology and contracting strategy selection to Owner´s Engineer and Lender´s Engineer to detailed design and project integrator to EPC. The main thing for us is to have the flexibility to help clients develop and deliver projects using the execution method best suited to meet their overall goals.´
´Across all client types and delivery models we are seeing an increasing recognition in the GCC that the ability to meet demand in a sustainable manner requires technological innovation. As greater efficiency is sought in the delivery and operation of energy and water infrastructure, factors other than the least cost solution should be considered. To reliably meet the region´s goals utilities, IPPs and IWPPs need partners with a world-class understanding of the energy and water technologies available.´
Referring to the plethora of opportunities available in the utilities sector, he says, ´The market is open to all players, local and foreign alike. For new entrants, commitment to the long term is essential. Awareness of commercial and legal requirements imposed on companies operating in the market that differ from country to country, emirate to emirate and client to client, is the key. Clients are seeking new players because of anticipated expansion in the volume of water projects. Contractors who demonstrate long-term commitment to the market are generally favoured.´ Apart from the financial gains, the contractors also stand to attract newer opportunities for long-term sustainable business in the market.
What lies ahead?
As Abi-Hanna puts it, ´The GCC is not a homogenous region so the outlook will differ between GCC states. In many GCC states, there is a desire to innovate, this will continue. We have found that being able to offer a world-class understanding of water technologies, then align the way we deliver projects and programmes to empower clients to meet their overall business needs is vital and will remain so. In addition to developing infrastructure, the GCC needs to develop people.´
Adding to this, John says, ´With extensive diversification and industrialization programmes underway across the GCC along with their hosting of global events such as World Cup 2022 and Expo 2020, the population in the GCC is only likely to increase over the next five years at a pace unparalleled in the past. The resultant rise in the demand for water is likely to far outstrip current capacities.´
Today, the GCC countries are dealing with problems that require long-term solutions. In this battle for water, while PPP is emerging as a striking force, issues of sustainability and Eco-consciousness are also coming to the fore. With mega projects underway, it is worth watching the water scenario in the Middle East for success stories in the making.
Many GCC? ?countries are aiming for 100?% reuse of treated sewage effluent within the next few years.?´
- Mibu John,Partner & Research Director, Ventures Middle East
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