The UAE is currently spending $800 million (Dh2.9 billion) per year on building, operating and maintenance of desalination plants which will jump by over 300 per cent to $3.22 billion (Dh12 billion) over the next six years, according to a new report by Global Water Intelligence.

The country currently has 8,885,366 m3/d of contracted desalination capacity, but this will rise to 13,700,138 m3/d by 2016. During that time the cost of operating existing plants and the new plants that come on line will rise to $973.5 million, compared to $682.3m in 2010. This steep increase in expenditure on desalination is part of a global trend towards the development of alternative water resources in the face of growing scarcity.

The forecast is based on the timing of proposed desalination projects in UAE, and expectations of increased demand for water as a result of urbanisation, economic growth, and increased irrigation. There are more than 2.5 million m3/d of desalination capacity currently on the drawing board across the country.

Essentially the amount of naturally occurring fresh water in the world is constant – or even declining because of the over-exploitation of non-renewable ground water resources. Demand for water continues to grow as the need to increase agricultural production sucks up available water for irrigation, forcing urban water users to develop new resources. Overall global desalination capacity is expected to grow from 68.3 million m3/d at the beginning of this year to 129.9 million m3/d by the end of 2016.

Christopher Gasson, editor of Desalination Markets 2010, said: “The UAE has always been one of the most important desalination markets in the world. The global financial crisis has certainly had an impact on some of the real estate related projects in Dubai and the Northern Emirates but the Abu Dhabi market has remained strong. By 2016 the desalination market should be back at the same level as 2007 in terms of new build capacity.

“The big change over the next five years is going to be the Dubai Electricity and Water Authority’s decision to move over to private finance. This will open out the market to a wider range of technologies and plant suppliers and ensure that the authority gets the best value for money.”

It said the price of desalinated water has started to rise again. There has been considerable progress in reducing the energy consumption of desalination plants, which has brought down operating costs, but the cost of building new plants is rising. This is largely due to extra spending to protect the environment, and the cost of more energy efficient equipment, the report finds. Five years ago the benchmark price for a thousand litres of desalinated water was around $0.50, but today the best plants struggle to deliver water for less than $0.60 per thousand litres. Despite this, water from a desalination plant is still less than one thousandth of the price of bottled waters.