Realising the True Power of Water in Asia
Water and power generation are inseparable. Fossil fuel-fired power stations require a reliable, consistent stream of treated water to operate effectively. Wastewater streams generated from the combustion of coal need adequate treatment before being discharged.
GWI’s new primary research report, Water for Power, focuses on the opportunities for companies to provide water and wastewater treatment solutions in an increasingly challenging environment for the power generation industry.
Water and wastewater treatment in the power industry is already big business, worth $2.1 billion in 2013. The largest capital expenditure outlay is accounted for by pre-treatment systems (34%), followed by conventional wastewater treatment (26%) and condensate polishing systems (24%).
Capital expenditure is predicted to grow at an annual rate of 7.2% between now and 2018, driven by new additions to power generation capacity – largely in emerging markets – and the replacement of systems at existing generation facilities in mature markets. The total value of this market is expected to reach $2.9 billion in 2018.
The growth of the market is based on three principal drivers: rapid economic development and industrialization in developing countries; the need to secure a reliable source of water to operate power generation facilities; the need to reduce the environmental impact of the power industry.
Water for Power identifies the supply of wastewater treatment equipment is the most rapidly growing area of the market, with a projected 10.2% compound annual growth rate between 2013 and 2018. This market is expected to be worth $608 million in 2013, and the most well developed regions are in Europe and the United States, where stricter environmental regulations are limiting the concentrations of pollutants that can be discharged in wastewater streams. Power plants in water-scarce regions of India and China, meanwhile, will invest in wastewater treatment as a means of reusing effluent streams, chiefly for cooling system makeup water.
The water for power market can be divided into two. In mature markets, most expenditure will go towards the replacement, maintenance and upgrade of existing systems. Investments in wastewater treatment will grow fastest, as plant owners come under pressure to bring ageing power plants in line with new environmental regulations. In developing markets, most expenditure will be on newly built plants. Investments will be focused on securing a reliable source of feed water. The report investigates growth, capital expenditure and trends in China, South East Asia, India, the USA, Sun-Saharan Africa and Europe.
Power plant owners will increasingly outsource water treatment operations in order that they can focus on their core business of generating electricity. Service companies can provide value to the power industry in three key areas: chemicals, mobile water treatment solutions, and the operation of on-site water treatment systems.
Service companies provide analysis, testing, advice and maintenance to adapt chemical treatment programmes to suit changing water quality and to reduce the number of plant failures. The market for the specialty chemical supply contracts that include these services will be worth an estimated $1.3 billion in 2013.
Mobile water treatment solutions represent a growth market in the power industry for the simple reason that an uninterrupted water supply is essential to the efficient operation of a power plant. The market for mobile water services in the power sector is expected to be worth $230 million in 2013, and we estimate that the market will grow to $320 million by 2018.
The outsourcing of entire on-site water treatment systems is big business in the power industry in the US and the number of opportunities is increasing in Europe and Australia, as well as in most parts of South East Asia.