With a coastline spanning 7,800 km, India has access to an abundance of seawater, which offers tremendous potential for desalination to help the country’s growing water needs. According to a report by NITI Aayog on the composite water management index, over 600 million Indians face high to extreme water stress. In order to tackle this, the think tank has been working on a proposal to set up desalination plants in the country. It has suggested setting up floating desalination plants on the sea. These plants could then leverage solar energy and wind energy for operations. NITI Aayog is also planning to bring synergy between the water and other departments by linking desalination with other government programmes such as the ambitious Sagarmala project. Sagarmala aims to modernise ports in the country so that port-led development can be augmented and coastlines can be developed. It is being proposed that the desalination plants be built on the coastline and marine waters and water supply to the population be carried out through a network of pipelines.
Trends in the market
In order to fulfil the country’s growing water demand, desalination is being encouraged throughout India. According to India Infrastructure Research, the country has a desalination capacity of over 620 million litres per day (mld). The municipal segment accounts for 33 per cent (200 mld) and the industrial segment for 67 per cent (420 mld) of the total capacity. Among the states, Gujarat has the maximum share of over 360 mld, followed by Tamil Nadu at around 250 mld.
With many Indian cities heading towards “Day Zero” and water paucity growing in the rural parts of the country, desalination is emerging as a solution to combat the overall water crisis in the country. One of the major sources of water is groundwater, which is fast depleting. In many parts of the country, the groundwater available is contaminated. Likewise, freshwater sources, such as rivers, lakes and aquifers, are drying up or becoming too polluted to use.
Many coastal states such as Gujarat, Tamil Nadu and Andhra Pradesh have high industrial penetration. In order to tackle the growing water stress, many states are coming up with new desalination plants. In June 2022, the first government-run desalination plant was inaugurated in Dahej, Gujarat. The plant was set up with an investment of over Rs 8.8 billion, having a capacity of 100 mld. The surrounding industries fetch around 200 mld of water from the Narmada river. Based on reverse osmosis technology, this new plant will deliver 100 mld to the industries in Dahej, thus reducing the pressure on the river.
Treading on similar lines, the Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) is setting up the third desalination plant in the city by February 2023. The 150 mld plant in Nemmeli is expected to provide water to areas such as Velachery, Madipakkam, Sholinganallur, Alandur and Pallavaram in Chennai and serve a population of around 1 million.
Challenges
The cost of developing a desalination plant is higher than the cost of drawing water from freshwater sources. The factors affecting the cost estimation include the location of the plant, source and quality of water, end use, and economies of scale. According to India Infrastructure Research, in the past two decades, capital costs as well as operating expenditure for a desalination plant have reduced significantly, from Rs 120 per kl to Rs 42 per kl. It has been made possible due to improvements in technologies and the adoption of efficient systems. However, this cost is on the higher side and requires to be brought down further to be a feasible alternative.
Another major challenge for the sector is the growing environmental concern. The brine discharge from desalination plants into the oceans and seas has a negative impact on the marine environment. It creates increased salinity and a rise in temperature as well as pushes chemicals back into the waterbodies. The technologies for separating brine from seawater to make it potable for daily use are expensive and energy intensive. This is another major reason why many experts do not consider desalination as a viable option for meeting water demands in the country. Other bottlenecks include importing equipment such as membranes for filtration, and high water tariffs charged by desalination plant operators from the ULB purchasing desalinated water.
Market outlook
According to NITI Aayog, by 2030, India’s water demand would be twice the available supply. This indicates severe water scarcity for hundreds of millions of people. It is anticipated that the demand for drinking water will reach over 100 billion cubic metres in India by 2050.
The country is exploring alternatives to groundwater and freshwater for meeting the demand. As per the projects tracked by India Infrastructure Research, a desalination capacity of over 2,000 mld is expected to be added in both the industrial and municipal segments. Tamil Nadu and Gujarat together will account for around 75 per cent of the total upcoming capacity. Tamil Nadu is expected to come up with the highest municipal capacity of over 750 mld, followed by Gujarat (460 mld), Maharashtra (200 mld), Andhra Pradesh (100 mld) and Odisha (10 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).
With these projects, the sector is expected to attract huge investments. As per India Infrastructure Research, the total upcoming investment in the municipal desalination segment is estimated to be over Rs 160 billion, while the upcoming investment in the industrial segment is expected to be around Rs 50 billion. Of this, Tamil Nadu is anticipated to receive the highest investment of over Rs 15 billion.
As per industry estimates, at least 12 industrial desalination projects in the 20-50 mld capacity range are likely to be
developed in the country. Industries such as refineries, power and metal, that are located in coastal areas are expected to go in for desalination to meet their water demands. Further, it is anticipated that all major port expansion projects are likely to have a desalination plant each on their premises, and smaller desalination plants are likely to be added to the islands in the country.
The growth in the sector is expected to offer ample market opportunities. The upcoming desalination projects would require assistance from experienced project developers across the world. This will open up opportunities for equipment and technology providers. The planned projects would also require consultancy services for the preparation of various reports such as detailed project reports and feasibility reports as well as for securing approvals including environmental clearance, forest and wildlife clearance, and coastal regulation zone clearance.
