Perhaps more than in other parts of the world, in the Middle East energy and water are closely intertwined. Any discussion about the outlook for electricity in the region also becomes a discussion about water. As we examined in detail in the latest WEO special report, Outlook for Producer Economies, this is largely because of the way that the Middle East has turned to desalination to help narrow the gap between freshwater withdrawals and sustainable supply.
But this reliance on water desalination comes at a significant cost. In 2016, desalination accounted for just 3% of the Middle East’s water supply but 5% of its total energy consumption.
Countries in the Middle East already have some of the lowest water availability levels on a per-capita basis in the world. And economic and population growth in the region are set to increase demand for water over the coming decades, a period during which rising temperatures in the region could impose further constraints on water supply.
Moreover, the consistent under-pricing of both water and energy has encouraged the inefficient use of water and contributed to unsustainable levels of withdrawals from non-renewable groundwater resources. While roughly 85% of the region’s water withdrawals are for agriculture, the value added to the region’s GDP from the sector is less than 5%.
The growing reliance on desalination in the Middle East underlines the importance of effective management of the water-energy nexus, with knock-on implications for energy and water security. How things play out in the next decade will depend a lot on the policies and technologies that are put in place.
Membrane technologies that use electricity, such as reverse osmosis, are the most common desalination technology installed worldwide. But the Middle East is an exception. The low cost of oil and gas and the prevalence of co-generation facilities for power and water means the region relies heavily on fossil fuel-based thermal desalination (such as multi-stage flash or multiple-effect desalination).
Two-thirds of the water produced from seawater desalination in the region today is from fossil fuel-based thermal desalination, while the rest is from membrane-based desalination that relies heavily on electricity produced using natural gas. Overall, the Middle East accounts for roughly 90% of the thermal energy used for desalination worldwide, led by the United Arab Emirates and Saudi Arabia.
But the use of membrane technologies is growing in the region. Reverse osmosis technologies accounts for 60% of capacity in Oman and roughly half of the capacity in Saudi Arabia. All of the contracted plants currently under construction in Saudi Arabia and a majority of planned capacity are reverse osmosis desalination plants, including the Rabigh 3 project being developed by Saudi Arabia Water & Electricity, which is expected to come online in 2021 and has the potential to become one of the largest membrane-based seawater desalination plants in the world.
In our outlook to 2040, the production of desalinated seawater in the Middle East is projected to increase almost fourteen-fold to 2040, and there is a concerted shift towards membrane-based desalination in both our New Policies Scenario (NPS) and Sustainable Development scenarios (SDS).
Why the shift in approach? There are a few main reasons:
- The cost of membrane-based technologies for desalination continues to decline, making them the technologies of choice for new capacity.
- The disadvantage of using domestic hydrocarbons for thermal desalination is underlined by anticipated reforms to energy pricing, which reduce fossil-fuel consumption subsidies. The use of domestic oil and gas resources for thermal desalination also cuts into potential export revenues.
- The electricity mix is changing, with many countries in the region looking to exploit their (highly under-utilised) potential for renewables. The region has some of the highest solar irradiation rates in the world and some countries have received some of the lowest bids seen so far for solar projects, but there is only around 1 GW of solar capacity in the Middle East today, compared with some 90 GW of oil-fired generation capacity.
- Even more importantly, pairing more co-generation plants with reverse osmosis technologies instead of thermal technologies would allow for greater operational flexibility and for the system to be used as a demand response facility: it could help ensure an outlet during periods of excess electricity production from solar, with water storage tanks effectively serving as energy storage.
- In addition, relying more on renewables, depending on the technologies, can reduce the water intensity of electricity generation and thus water demand from the power sector, as the water needs for solar photovoltaic and wind compared to other technologies or fuels is low.
By 2040, over three-quarters of the water produced in the Middle East in the NPS is from membrane-based desalination. However, because the power sector remains heavily reliant on natural gas and oil for power generation in 2040, most desalination still depends on fossil fuel-based electricity. The share of desalination in the region’s total final energy consumption also rises to reach almost 15% in 2040 and accounts for roughly a quarter of the region’s water supply.
A more rapid phase-out of subsidies for fossil fuels in the SDS results in a higher share of water production from membrane-based and Concentrating Solar Power desalination in 2040 than in the NPS. The policy choices taken in the SDS also lead to the deployment of more renewables, which account for over half of power generation by 2040. This shift not only reduces carbon dioxide emissions and local air pollutants, but also allows for more effective management of the region’s energy and water needs.