A new report from analysts Frost and Sullivan has put desalination centre stage in an increasingly water-stressed China.
With 400 cities out of 668 in China now faced with the challenge of water scarcity, the report say that the Chinese government is encouraging domestic companies to pursue innovative desalination technologies.
According to the report, the Chinese government is taking different steps and actions to solve the problem and desalination is one of the key solutions.
Frost & Sullivan analyst Jennie Peng said that although detailed policies for the desalination industry were yet to be confirmed for the 12th five year plan (2011-2015), the expectation was that favourable policies would become clear which would be translated into city-level goals with regulations on both privatisation and long-term risk proofing.
Jennie Pang commented:
"The Chinese desalination market is still very young with immature regulation and market environment. Several projects have been established in Northern China coastal areas which significantly enhance the confidence for the government and project developers in the wide adoption of desalination in water scarce coastal areas of China. However, there still is lack of supporting policies in terms of risk proof mechanisms, allocation of funds or subsidies, and measurement for development of desalination projects".
Three important documents: China Ocean Agenda 21, The Outline of the National Planning for Development of Ocean Economy and The Special Plan for Seawater utilisation set out the guidelines for the Chinese seawater desalination industry.
The Special Plan for Seawater Utilisation in particular clearly states the potential for seawater desalination development, investment environment, and regional targets for desalination and seawater utilisation. The 12th five year plan on seawater utilisation is expected to issue more up-to-date development plans on city-level next year.
The central government is encouraging the development of renewable energy projects (wind-powered/nuclear-powered plants, etc.), in which desalination can be adopted as auxiliary water supply and treatment system.
The aim is to utilise either the abundant power or heat to generate desalinated water and integrate the energy and water recycling system. Desalination can then benefit from the special fund allocated to renewable energy industry by the Chinese government.
The Chinese government is now urging domestic companies to pursue innovative desalination technologies and increase the product quality, lifespan and services. This is seen as important to catch up with the international established suppliers and further reduce the overall desalination cost.
At present, the gap in cost between domestic and imported desalination equipment is still significant. Imported equipment is still preferred by large scale project developers, mainly on account of the assurance related to stable quality and treatment efficiency. However, Pang said that localisation was a growing trend.
The localisation rate of desalination products/systems (the ratio of production/supply from local manufacturers or technology suppliers vs. overall supplies in China) is about 60% now, and this rate is targeted to reach 90% by 2020.
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