Desalination Technology Markets

"Energy Projects"

07/06/2010

Water scarcity, population and economic growth, pollution, and urbanization are all placing increased pressure on freshwater resources. The gap between the supply of freshwater and demand for water for industrial, agricultural, and domestic use is growing at an alarming pace – from California to Australia. At the same time, the cost of desalination has come down steadily. Desalination is becoming more affordable and more people can benefit from an almost unlimited resource – seawater.

The desalination plant supplier market is quite fragmented, despite a great deal of mergers and acquisitions activity during the last decade. And as reverse osmosis (RO) is increasingly adopted as the major desalination technology, the barriers to entry are being lowered. Of note, the top five suppliers captured a mere 25% of the market from 2007 to 2009. In contrast, however, the market for key desalination components is far more concentrated. For example, more than 65% of the market for RO membranes is controlled by three large players. The markets for high-pressure pumps and energy recovery devices are also quite concentrated. These competitive dynamics will be critically important as the stakes continue to increase in the rapidly-growing global desalination market.