Saudi Arabia faces severe water scarcity due to limited surface water and irregular rainfall, but demand is growing rapidly due to population growth, industrialization, and tourism. To address this, Saudi Arabia has greatly expanded desalination capacity, led by reverse osmosis plants. However, rising costs and environmental impacts require a shift to more sustainable technologies like solar and nuclear powered desalination. If Saudi Arabia continues to invest in private sector partnerships and new technologies, the desalination industry has strong potential for high profits and meeting the country's critical water needs.

1. Desalination in Saudi Arabia: The
Future of Water Security
MORDOR INTELLIGENCE

2. • Saudi Arabia suffers from severe water scarcity due to:
• Vast majority of desert land in which surface water
rarely exist
• Irregular and scanty rainfall ~ 80 mm per year
• High rate of evaporation due to extreme climate
• Despite scarcity of water supply, the demand of water
in this region is growing at a high rate due to:
• High rate of population growth due to high inflow of
migrants. Population grew 1.9 percent annually from
2005 to 2014
• Rapid industrialization has increased the demand for
industrial water uses
• Increasing religious tourism (especially during
Ramadan) and business tourism in these regions
Issue of Water Security in Saudi Arabia: Demand Supply
Mismatch and Challenges
Problems are likely to continue:
• High historical dependence on ground water has led to
significant fall in ground water level
• Significant deterioration in water quality
• Changing global climate is likely to cause substantial
reduction amount of rainfall in this region
• Rising temperature due to global warming is likely
increase the rate of evaporation
• Subsidization of water in the cities is leading to wasteful
use of water
• The water problem is so severe that Saudi Arabia has
planned to phase out agriculture dramatically in next
few years so as to reduce water consumption

3. Desalination Industry: The stepping stone for insuring
Water Security
• Rising oil prices during late 1970s led to economic
prosperity of the region. This was followed by huge
industrialization and boom in construction sector. The
region also witnessed rapid growth in desalination
industry as huge investments were made to ensure
‘Water Security’ of the region
• The initial desalination was done using thermal
technologies like ‘Multiple Effect Boiling (MEB)’ and
‘Multi Stage Flash (MSF)
• The success of MSF and MEB led to huge growth of
desalination plants in KSA.
• However, the use of thermal energy create
environmental problems as they are mainly operated
using fossil fuels.
• Thus, KSA shifted to better energy efficient and modern
techniques like Reverse Osmosis (RO).
• Currently RO is most popular desalination method in KSA
MSF
RO
MEB
FIRMS USING DIFFERENT DESALINATION TECHNIQUES

4. Desalination Industry: The stepping stone for insuring
Water Security
To deal with the water scarcity and preserve ground water
levels, Saudi Arabia has been expanding the production of
desalinated water rapidly.
800
850
900
950
1000
1050
1100
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Installed Capacity (MIGD)
Installed Capacity (MIGD) Trend: Installed Capacity
MSF
51%
RO
49%
MEB 0.13%
INSTALLED DESALINATION CAPACITY
Although, majority of the firms use RO technology, but
still MSF produce majority of the desalinated water in
KSA.

5. Desalination Industry: The Future
• Desalination complex northwest of Jubail in Saudi Arabia will be the world’s
biggest seawater desalination facility with a production capacity of 1.025
million cubic meters (264 million gallons) of drinking water a day and 2,600
megawatts of electricity after the completion of first phase in 2015-16.
• Saudi Arabia is investing 17 billions of riyals this year for desalination
projects
• Currently, Saudi Arabia is the leading producer of Desalinated water among
GCC (Gulf Cooperation Council) Nations
• As oil prices have crashed in the international market, KSA is facing fiscal
and budgetary constraints in funding desalination projects. Thus
governments are encouraging more involvement of private players in this
industry.
• Al Shuaibah Water and Power Company was the first private project in
Saudi Arabia which is currently constructing desalination plant with a
capacity of 226.6 MIGD
• Currently, Saudi Arabia is considering privatizing its Saline Water
Conversion Corporation (SWCC) so as to encourage participation of more
private players.

6. Desalination Industry: The Future
• In order to mitigate the polluting effects of thermal
technologies, KSA is considering expansion and use of
thermal energy for desalination process. This has been
helped further by the rising affordability of solar panel
across world because of falling prices.
• Concentrating Solar Power (CSP) desalination project is
being constructed in the Northeastern city of Al Khafji
• As per Mordor Intelligence studies, CSP Desalination is going
to boom in next 10 years.
• Saudi Arabia is also considering use of nuclear energy for its
desalination purposes. Recently Governments of Russian
Federation and Saudi Arabia signed an agreement on
cooperation in the field of nuclear energy which will benefit
desalination industry.

7. QuickPeek
Growing Demand of Water:
• Growing Population
• Rapid Industrialization
• Rising Tourism
Investment Opportunities:
• Solar Desalination
• Support for Private players
• Co-production of
Desalination and Power
Falling Conventional Supply of
Water
• Falling ground water level
• High and increasing rate of
evaporation due to climatic
change
• Scanty and Irregular rainfall
• Lack of rivers and Lakes
Advantages:
• High Demand Supply Gap
• Availability of New and Energy
Efficient Technologies
• Government Support for
Private Players
• Inelastic and Ever increasing
Demand
• No availability of Substitute
• Growing Profitability

8.  Inelastic and Ever Increasing Demand for Water
 Government Support for Private Players
 High and Growing Profitability of the Sector
 New and Energy Efficient Technologies
 High Demand Supply Gap
 No Substitute of Water
Desalination Industry: The Future

9. WHO WE ARE?
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