Sunday, October 30, 2011

China Takes a Loss to Get Ahead in the Business of Fresh Water

http://www.nytimes.com/2011/10/26/world/asia/china-takes-loss-to-get-ahead-in-desalination-industry.html
... The Beijiang Power and Desalination Plant is a 26-billion-renminbi technical marvel: an ultrahigh-temperature, coal-fired generator with state-of-the-art pollution controls, mated to advanced Israeli equipment that uses its leftover heat to distill seawater into fresh water.

... One wrinkle in the $4 billion plant: The desalted water costs twice as much to produce as it sells for. Nevertheless, the owner of the complex, a government-run conglomerate called S.D.I.C., is moving to quadruple the plant’s desalinating capacity, making it China’s largest.
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As it did with solar panels and wind turbines, the government has set its mind on becoming a force in yet another budding environment-related industry: supplying the world with fresh water.

The Beijiang project, southeast of Beijing, will strengthen Chinese expertise in desalination, fine-tune the economics, help build an industrial base and, along the way, lessen a chronic water shortage in Tianjin....
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At the government’s order, China is rapidly becoming one of the world’s biggest growth markets for desalted water. The latest goal is to quadruple production by 2020, from the current 680,000 cubic meters, or 180 million gallons, a day to as many as three million cubic meters, about 800 million gallons, equivalent to nearly a dozen more 200,000-ton-a-day plants....

Institutes in at least six Chinese cities are researching developments in membranes, the technology at the core of the most sophisticated and cost-effective desalination techniques.

The National Development and Reform Commission, China’s top-level state planning agency, is drafting plans to give preferential treatment to domestic companies that build desalting equipment or patent desalting technologies. There is talk of tax breaks and low-interest loans to encourage domestic production.

... Direct government investment in seawater projects does not exceed 10 percent of their cost....The government’s plans could mean an investment of as much as 200 billion renminbi, or about $31 billion, by state-owned companies, government agencies and private partners.

Beijiang’s desalination complex, built by S.D.I.C. at the behest of the Development and Reform Commission as a concept project, was almost wholly made in Israel, shipped to Tianjin and bolted together. Nationally, less than 60 percent of desalination equipment and technology is domestic.

China’s goal is to raise that to 90 percent by 2020...

Demand for water here is expected to grow 63 percent by 2030 — gallon for gallon, more than anywhere else on earth....

In Tianjin, deemed a model city for water conservation, 90 percent of water used in industry is recycled; 60 percent of farm irrigation systems use water-saving technologies; 148 miles of water-recycling pipes snake beneath the city. Apartments in one 10-square-mile area of town feature two taps, one for drinking water and one for recycled water suitable for other uses.

The Beijiang plant, one of two, supplies an expanding suburb with 10,000 tons of desalted water daily, with plans to someday pump 180,000 tons....

The Beijiang plant has faced some hiccups. The mineral-free distilled water scrubs rust from city pipes en route to taps, turning the water brown....

The global market for desalination technology will more than quadruple by 2020 to about $50 billion a year, the research firm SBI Energy predicted last month, and growing water shortages worldwide appear to ensure further growth.

... The increasingly sophisticated membrane technologies that filter salt from seawater can be applied to sewage treatment, pollution control and a legion of other cutting-edge uses. Far outpaced now by foreign membrane producers, which command at least 85 percent of the market, China is set on developing its own advanced technologies.
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The list of foreign companies that have plunged into China’s desalination industry is long: Hyflux of Singapore, Toray of Japan, Befesa of Spain, Brack of Israel and ERI of the United States, among others.  And just as foreigners shifted solar-energy research and production to China, desalination companies are leaving their home bases as well. The Norwegian company Aqualyng is a partner with the Beijing city government ... and is studying moving its manufacturing facilities from Europe to China.  ERI, which is based in San Francisco and claims to have the desalination industry’s most advanced technology, is moving research facilities to China and is considering moving manufacturing as well at some later date.  Most of the foreign companies have partnered with state-owned corporations.... ERI and Aqualyng say they can become researchers and manufacturers in China without losing control of their products.
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by Michael Wines
FOR FULL STORY GO TO:
http://www.nytimes.com/2011/10/26/world/asia/china-takes-loss-to-get-ahead-in-desalination-industry.html
The New York Times www.NYTimes.com
October 25, 2011

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