India has been facing numerous water-related challenges such as rapidly depleting freshwater resources, reduction in annual rainfall and untimely floods. Factors such as unchecked disposal of waste, rampant discharge of sewage and industrial effluents, and large-scale deforestation along the basins have also constricted the capacity of rivers to meet the growing demand for water. Coastal areas such as Tamil Nadu, Gujarat and Andhra Pradesh have a huge water scarcity problem due to poor river water availability, low groundwater levels and high demand.
India has access to abundant seawater with its 7,800 km of coastline, which provides enormous potential for meeting the growing water demand in the country via desalination. The National Water Mission, formulated as part of the National Action Plan on Climate Change (NAPCC), has identified desalination as a major tool to make seawater and brackish water accessible and usable by people for drinking and industrial consumption. In July 2019, NITI Aayog also came up with a proposal to set up desalination plants along India’s vast coastline in order to address the country’s water woes. Potable water could then be supplied around cities through a network of pipes.
Trends in the market
Desalination in India is growing to meet the increasing water demand in the country. As per the projects tracked by India Infrastructure Research, as of January 2022, the desalination capacity in India was estimated at over 620 million litres per day (mld). The municipal and industrial segments accounted for 33 per cent and 67 per cent of the total capacity respectively. Municipal capacity stood at over 200 mld, while industrial capacity was around 420 mld. Currently, Gujarat has the maximum desalination capacity of over 360 mld, followed by Tamil Nadu at around 250 mld.
Chennai city is blessed with an abundant coastline. In order to tackle the growing water stress, a 100 mld desalination plant was envisaged along the coast in the city at Nemmeli in 2010. The plant was extended by 10 mld in 2016. With the growing demand, the city is developing another desalination plant with a capacity of 150 mld. This will help provide drinking water supply to around 0.9 million residents of Chennai. It is expected to be completed by April 2023 at an estimated investment of Rs 12.59 billion.
In another notable development, one of the biggest desalination plants, exclusively for industrial purposes, is being built at Dahej, in Gujarat. It will ensure water security for industries, especially during the summer season, and help reduce the dependence on the Narmada river for water. The plant is expected to be operational by the end of 2022. Once this plant is in operation, around one-fourth of the industry’s requirements for water will be met. The Gujarat government has also proposed to construct seven more desalination plants, including those at Jamnagar, Dwarka, Gir Somnath, Bhavnagar and Kutch.
Further, a pilot project for an ocean thermal energy conversion-powered desalination plant has been initiated at Kavaratti, Lakshadweep Island. It is expected to be unique in generating drinking water from seawater using green energy and an eco-friendly process. The plant is expected to generate 0.15 mld of drinking water.
An important aspect of desalination plants is the construction cost. The cost of developing a desalination plant is high compared to the cost of drawing water from freshwater sources. The cost estimation of a typical desalination plant is dependent on the location, end-use, source and quality of water, economies of scale, and many other factors. In the last two decades, capital costs, as well as operating expenditures, for desalination plants have come down significantly – from Rs 120 per kl in 1995 to Rs 42 per kl in 2019, as per India Infrastructure Research. This has been made possible with improvements in desalination technologies such as adoption of energy efficient pumps, improved membrane design and introduction of system integration, leading to lower power consumption and reduction in capital costs and power tariffs.
Policy and regulatory developments
The government’s National Water Mission was formulated as part of the NAPCC to combat the threats of global warming. The mission has a total of five goals. Goal 3 specifically focuses on areas vulnerable to the impact of climate change, and areas where water resources, particularly groundwater resources, are declining due to overuse. The mission calls for the development of desalination capacity to meet the increasing water demand in water-scarce areas. It focuses on the adoption of new and appropriate technologies for water supply to coastal cities, such as low-temperature desalination technologies that allow the use of ocean water. Another strategy of the mission involves seawater desalination through reverse osmosis and multistage flash distillation to take advantage of low-grade heat energy from, for instance, power plants located in coastal regions, or by using renewable energy such as solar.
The Ministry of Earth Sciences, in November 2021, approved the continuation of the Ocean Services, Modelling, Application, Resources and Technology scheme for a period of five years (2021-26). The scheme is focused on contributing significantly towards the national policy on the blue economy, for effective and efficient use of the vast ocean resources in a sustainable way. One of the plans of the scheme includes setting up six more desalination plants in Lakshadweep with an enhanced capacity of 0.15 mld.
Further, the Jal Jeevan Mission, launched in August 2019, also aims to strengthen the existing water sources by setting up various treatment plants and desalination plants in the coastal regions. The mission also aims to ensure that the existing water supply and connections are functional, water quality is maintained, and sustainable agriculture is achieved. A desalination plant in Prakasam district in Andhra Pradesh has been proposed under the mission, with an outlay of Rs 0.35 billion. This will address the drinking water needs of over 50,000 people across 14 coastlines in the district.
The rising demand for water from various industries, coupled with government support, is expected to drive the desalination market in the country. The demand for drinking water in India is expected to be 73 billion cubic metres (bcm) in 2025, and is anticipated to reach 102 bcm by 2050.
Many states and union territories are coming up with desalination plants to meet the water demand. As per the projects tracked by India Infrastructure Research, a desalination capacity of around 2,300 mld is expected to be added in both the industrial and municipal segments of the country. Tamil Nadu and Gujarat together will account for around 75 per cent of the total upcoming capacity.
Tamil Nadu is set to come up with the highest municipal capacity of around 759 mld, followed by Gujarat (460 mld), Maharashtra (200 mld), Andhra Pradesh (100 mld), Odisha (10 mld) and Lakshadweep (0.15 mld). Likewise, Gujarat is expected to come up with the highest industrial capacity (370 mld), followed by Andhra Pradesh (194 mld), Tamil Nadu (102 mld), Karnataka (30 mld), Odisha (20 mld) and Maharashtra (10 mld).
The total upcoming investment in the municipal desalination segment is estimated to be around Rs 165 billion, while the upcoming investment in the industrial segment is estimated to be around Rs 48 billion. Of this, Tamil Nadu is expected to receive the highest investment of around Rs 18 billion.
Going forward, technologies need to be optimised for energy conservation, as power is a major cost component for a desalination plant. Membrane technologies such as seawater reverse osmosis are expected to dominate the municipal desalination segment. Meanwhile, the industrial segment is expected to witness greater use of thermal technologies.