Communique of the Global Clean Water Desalination Alliance at the International Summit of Marrakech on Water Security: For a Participative and Innovative Basin Management
The Global Clean Water Desalination aims at making clean desalination affordable for all
Marrakesh, 3 October 2019 – The roaring danger of water stress calls for the urgent reaction of the international community that is gathering in Marrakesh from 1 to 3rd October to discuss solutions for ensuring water security.
Such ambitious agenda will not happen by simply squeezing the water supply chain or by accelerating investments in the exploitation of depleting water reserves. There is a need for out of the box thinking. Two main solutions exist and need to be implemented in parallel: improved water management through the recycling and reuse of water and sustainable desalination.
Desalination has decisively proven during the last 60 years its reliability to deliver large quantities of fresh water from the sea, from brackish resources and through water reuse. Fresh water is no longer the infinitely renewable resource. Unlike oil, fresh water has no viable substitute. The sea is the unlimited source from which we can create new fresh water through desalination to provide sustainable and affordable fresh water for the global needs.
There are now over 20,250 installed desalination plants worldwide, operating in over 150 countries. According to the 31st GWI/IDA Worldwide Desalting Inventory, collected by the Global Water Intelligence (GWI) and the International Desalination Association (IDA), which covers desalination plants contracted to June 2018, the installed base of desalination plants around the world has a capacity of 105.3 million m3/d (23,180 MIGD) and by next year (2020), it is expected to increase to 114.7 million m3/d (25,220 MIGD). Long term forecast by 2030 will reach 198.8 million m3/day.
However, the projected accelerated growth of the desalination industry poses a climate and environmental risk if no proper actions are taken, as water desalination is typically an energy intensive process and largely powered by fossil fuel sources as of today. While the industry has been able to reduce considerably its power consumption and significantly lower its GHG emissions, numerous research projects now underway promise to further reduce energy requirements and minimize environmental impact of concentrate and brine discharges. These include projects that creatively couple desalination plants with renewable and alternative energy sources like wind, solar, geothermal, osmotic power and sea wave to provide the required clean energy input.
Developing Clean Desalination requires billions in investment in the short term. Jean-Pascal Pham-Ba, Spokesperson of the Terrawat initiative and Treasurer of the Global Clean Water Desalination explains that “The financing of water security is about risks, and risk perception. To enhance the volume of financing and to reduce its cost, all stakeholders need to contribute, and a new system needs to be collectively built: an innovative form of public private partnership, not at project level but at market level, a Systemic Public Private Partnerships (PPP). “
Therefore, there is a need to enforce consistent policies and stable regulatory frameworks that are setting clear and ambitious targets and long term fresh water off-take models based among other things on efficient tendering processes; clear GHG emissions reduction targets; renewable energy supply based on long term PPAs; brine and other process by-products disposal/treatment, and build or acquire capacities to manage administratively the overall process.
As equally important as the development of adapted policy and regulatory frameworks, is the leverage on public finance. This could be achieved by including climate and development finance in project finance structuring where applicable, to support the fresh water off-takers (municipalities, regional governments, public agencies, structural private off-takers like large factories/mines …), to ensure long-term credit worthiness, to bring in low cost institutional capital such as pension funds, and in particular to provide political and financial de-risking instruments. Furthermore, the definition and monitoring of the corresponding Key Performance Indicators (KPIs) should be in line with governmental regulation and international standards.
Mr. Pham-Ba adds that “there is a need for the full standardization of clean desalination plants development, construction and operation, including long term water supply contracts, and processes based on contractual standards and international best administrative practices, in order to streamline processes and reduce transaction lead-time and costs. Moreover, there is a need for the development of granular financing, meaning financial instruments able to aggregate financing distributed desalination plants of all sizes in a given territory, eventually cross-border.”
To support the use of these different tools and processes, there is a need for a digitized ecosystem supported by digital technologies, which would be enabled on the demand side, to aggregate demand (i.e. to group fresh water off-taker for their procurement) and to ease access to mutual credit enhancement tools to improve its market power. This could be done on the supply side, to build economies of scale and to reduce transaction costs; and on the finance side to simplify risk assessment and reduce risk pricing, as well as to build up large portfolio of assets to be financed or refinanced on international capital markets and/or with long term institutional investors.
Therefore, the cost of Clean Desalination will essentially depend on (i) the investment costs, which can be drastically reduced by applying this new Clean Desalination Systemic PPP, and (ii) the cost of energy, which also can be drastically reduced with a Clean Power Systemic PPP.
The interlinkage is clear. Derisking fresh water long term off-take enables desalination plants to finance themselves at lower cost and improves their financial creditworthiness. This enhanced creditworthiness enables them also to buy energy at lower cost because they become credible energy off-takers which enables power producers to get better financial terms to build Sustainable Power Plants.
It is a virtuous chain which can be built and where public support can be highly leveraged and made effective, through the creditworthiness cascade.
In other words, Clean Desalination Systemic PPP works hand in hand with Sustainable Power Systemic PPP. On top of this, Clean Power Systemic PPPs applies not only to power generation supplied to Clean Desalination, but to the entire economy, powering it with affordable, reliable, sustainable and modern energy. And all Systemic PPPs can use the same financial and digital infrastructure which will reduce its costs even further.
Finally, the financing of R&D financing is an important aspect in accelerating development of Renewable Desalination and interested countries and players will significantly increase their clean desalination potential by doing so. As an illustration, Leon Awerbuch, Board Director at the International Desalination Association (IDA) and Board Member of the Global Clean Water Desalination, explains that the US Department of Energy announced on September 23 2019, the Solar Desalination Prize as a multi-stage prize competition designed to accelerate the development of low-cost desalination systems that use solar-thermal power to produce clean drinking water from salt water. Millions of dollars will be awarded to competitors who advance through several stages of the competition, culminating in a $1 million grand prize for the successful testing and demonstration of promising solar desalination prototypes. The prize is administered by the National Renewable Energy Laboratory (NREL).
Financing is one of the building blocks of an entire ecosystem and it can’t deliver effectively if the other blocks don’t. But aligning all blocks in new Systemic PPPs and powering it with innovative digital infrastructure is a very powerful tool to achieve Clean Desalination at scale, and further SDG 6.
About the Global Clean Water Desalination Alliance
Key market players, from the public and private sectors, academia and civil society have come together and formed the Global Clean Water Desalination Alliance. The Alliance was launched at COP21, in December 2015 in Paris, under the auspices of the French Minister of Environment, Masdar Abu Dhabi Future Energy Company and the International Desalination Association. The mission of the Global Clean Water Desalination Alliance is to bring together all the industry players rather than through the actions of individual participants to reduce CO2 emissions from existing water desalination plants, enable improved environmental safeguards and scale up the use of clean desalination technologies through coordinated actions. Another area of interest to the Alliance is supporting governments with the assessment of their market potential and the adoption of appropriate policies to incentivize investments in renewable energy-based desalination plants. The Alliance also seeks to assist countries by providing training and capacity building through its wide corporate and public network. To date the Alliance has attracted nearly 200 members from over 50 countries from the energy and desalination industries, water utilities, governments, financing institutions, academia and R&D.
The Alliance is promoting the implementation of clean energy-based desalination building on existing experience and pilot projects. For instance, an increasing number of Middle-eastern and North African countries are now gradually moving away from thermal desalination towards reverse osmosis, which will open up the possibility to power these plants with renewable energy.
The clean and renewable energy revolution will have significant impact on the water sector. It constitutes both a climate change mitigation and adaptation solution and can reduce cost of water desalination and water reuse. The Alliance calls for increased public and private support for Research and Development and technological progress to increase the deployment of renewable energy in the water sector to create a low-carbon future for clean water production.
For further information on the Global Clean Water Desalination, visit http://www.gcwda.org
Contact: Fatma Ben Fadhl, Executive Director, Global Clean Water Desalination Alliance, fbenfadhl@gcwda.org