'Israel has great potential to be a leading water exporter.'
By TALI COHEN, THE BUSINESS POSTwater plant 88 298(photo credit: IDE Technologies Web site)
Water is becoming a major issue worldwide as sources become scarce and the cost of quality water increases. Today, there is global demand for higher quantities and increased quality of the water supplied to residents. But water quality is declining to the point where there are regions of the world where water is a cause of death - not life. The global water economy is in crisis.
The crisis stems from two main reasons. The first is global warming, which is causing more frequent and longer periods of drought than in the past. According to a United Nations report, experts assess that 20 percent of the world's water shortage stems from global warming. Another reason is the disruption of ecological systems as a result of pollution reaching water from fertilizers and insecticides, which are used in agriculture and industry. According to UNESCO, each year millions of people die because of illnesses originating from polluted water.
Fully 70% of global water consumption is channeled into agriculture. An additional 22% goes to industry, and just 8% to private consumption. The distribution differs between developed and developing countries: In developed countries, 59% of water consumption goes to industry, while in developing countries agriculture uses 82% of the water.
Seventy percent of the Earth's surface is covered by water, though 97.5% of that is saltwater. Just 0.74% of Earth's water is fresh water that can be used, however, since 1.76% is trapped in icebergs or is otherwise inaccessible. This amount of fresh water is supposed to satisfy the world's entire, thirsty population. The distribution of available water across the planet is not uniform, from the standpoints of both population and geographic dispersal. Asia, for example, has 60% of the world's population, but just 36% of the water.
UNESCO, which is responsible for putting together an international hydrological program, has made water its top priority for the coming years. Besides its support for hydrological research and development, it is committed to education and to developing ecological awareness.
The United Nations defines the water shortage's red line as 500 cubic meters of water per person annually. According to the UN indices, there is a severe shortage of water in Israel, since the country's water sources can provide only 200 cubic meters per person annually, just 40% of the amount defined as a shortage. Various experts estimate that the overall amount of water at the State of Israel's disposal is about 1.8-2.1 billion cubic meters a year. Mekorot Water Company figures show that in the household sector, every Israeli uses an average of about 300 liters of water a day.
For more than 30 years, the Israeli water economy has been in a deep and prolonged crisis, which is expressed in dwindling water sources. There is currently an accumulated deficit of about 2 billion cubic meters in the country's natural water reservoirs.
Israel's water economy can be said to be in a state of imbalance between supply and demand. The supply of natural water is not growing, and may actually be shrinking, and in order to increase supply there is a need to produce or to import additional water. However, demand for water is constantly growing, both because of the constant increase in population and because of a constant rise in the standard of living of all segments of the population.
According to the National Infrastructure Ministry and the Water Commission, overall water consumption in 2002 was 1,874 million cubic meters. The forecast for 2010 is an increase of 18.5%, to 2,173 million cubic meters.
The expectation is that in 2010 overall demand for water across the country, of all quality levels and for all purposes, including commitments in the wake of the peace agreements with Jordan and the Palestinians, will be about 2,288 million cubic meters. In order to meet this demand, without continuing the over-pumping, the Water Commission intends to desalinate about 400 million cubic meters of water per year, and to import from Turkey 100 million cubic meters of water annually, at an overall investment of about NIS 5 billion. At this point, the Israeli government has not approved the entire plan, but has given the go-ahead to the sections regarding desalination and importing water from Turkey.
Water desalination is a process of reducing the level of salinity in water. Desalinating seawater or saltwater enables the creation of additional water in places where there is insufficient freshwater for drinking and irrigation.
The water desalination process involves the investment of a great deal of energy. There are three common methods to desalinate water: through a process of water evaporation and condensation, the water evaporates and is separated from the salts in it; freezing water, a process in which the ice crystals freeze first, while the salt in them remains in the solution; the third method is to filter the water through membranes, which do not allow salt to pass through them.
Desalination ability of 500 million cubic meters by 2010
In 2001 a parliamentary commission of inquiry was established to study the water economy. The committee's recommendation regarding increasing the water potential in Israel was based on a Water Commission plan, which called for achieving the ability to desalinate nearly 500 million cubic meters of water by 2010.
The aspiration to use seawater as an unlimited source of water has existed for many years. The technologies for removing salts from seawater have existed for a number of years, but each time the subject of desalination arose for discussion it was ruled out for economic reasons, or in other words the cost.
The main cost of desalination stems from investing energy. The amount of energy required is related to the amount of salt in the water - the saltier the water, the more energy required to desalinate it. That is an important point, since there are many sources of saltwater in Israel that are more than 10 times less salty than seawater. It would be possible to produce desalinated water from these saltwater sources at a cost lower than the cost of desalinating seawater. Indeed, desalination of saltwater has been done for nearly 30 years, mainly in the Arava and Eilat.
As of 2005, Mekorot has supplied about 51 million cubic meters of desalinated water, mainly from the Eilat desalination plant, from similar installations in the Arava, and from the seawater desalination plant in Ashkelon. In 2006, Mekorot undertook to supply about 132 million cubic meters, with about 100 million cubic meters coming from the plant in Ashkelon.
There are currently several main projects for the desalination of seawater including the plants in Palmahim, Shomrat and Haifa Bay, each of which will provide 30 million cubic meters annually. Two additional plants are the Hadera plant, which will provide 50 million cubic meters annually, and the plant located in the Ashdod industrial zone, with an annual production capacity of 45 million cubic meters.
Negative environmental implications
The desalination plants impact negatively on the environment. As noted, water desalination is energy dependent, and generally uses exhaustible sources based on mined fuels: coal, petroleum and gas. Therefore, the desalination process results in all types of air pollutants creating the greenhouse effect, the ozone hole, acid rain, and causes climatic changes worldwide. Waste from the desalination plants contains concentrations of hydrogen solutions, which have saline concentrations three times higher than seawater. In addition, the waste contains chemicals that damage the marine environment. Waste from the desalination plants can trickle into the ground and pollute the groundwater. Furthermore, the desalination setup requires extensive grounds, some of which come at the expense of open, public areas, which could have been put to various other uses.
According to hydrologist Shimon Tzuk of Adam, Teva V'Din - Israel Union for Environmental Defense, the Water Commission built a program with a reversed set of priorities. Heading the list of priorities is the desalination of seawater, while the urban sector is at the very bottom. In effect, the Israeli government has created a further distortion by not authorizing the program in its entirety, but rather only approving the desalination program and the import of water from Turkey.
According to IUED officials, promoting the desalination issue is influenced by the interests of the private business sector and by the large planning offices, which have a vested interest in highly funded and highly profitable projects.
An immediate and simple solution to the 250-300 million cubic meter deficit in fresh water is water conservation in the home/municipal consumption sector. This can be achieved by a nationwide advertising and information campaign for water conservation on the household level, assembling an action program for the reduction of water loss in the local authorities, a campaign to provide information and guidance regarding planting in both private and public gardens, the introduction of a watering regimen that will be seasonally coordinated, examining the possibility of introducing household water quotas for the urban consumer, and promoting home dishwasher use, which uses much less water than washing dishes by hand.
Water export potential of $10 billion
The global water market is valued at approximately $450 billion. Israeli water industry-related exports total about $1b. Israeli economic potential is this area is growing. There are about 200 startup companies in the water sphere operating in Israel, and exports can grow and reach $10b. within a decade.
At present, Israel is a world leader in several areas within the water industry: desalination plants, irrigation systems and treated wastewater reclamation. Recognizing the export potential in the water sphere, the Ministry of Industry, Trade and Labor has decided to grant the water sphere preferred status, and over a three-year period the government will invest NIS 120 million in it.
In order to realize this potential, several moves must be swiftly implemented, since global players are entering the market. The large companies entering this sphere are planning on reaping earnings of $4b.-$5b. within several years. In 2005, the Siemens Company implemented a strategic market penetration into the world water technology market by acquiring water technology companies. Siemens is currently the largest company in the market, with a sales volume of roughly $2b., acquiring, on average, one new company a month, and it is expected to double its sales within three years. In mid-2006 Siemens and Mekorot signed a cooperation agreement for joint development of new water technologies.
There are a number of venture capital funds that currently focus on water. H2TEC will raise $50-$70m., planning on supporting advanced stage water technologies. The Agro Industries Company has established a fund earmarked for investments in the water sphere with about $50m. The fund is meant to operate for eight years, with an option for a further two, and will invest in products and technologies in the water sphere. Negotiations are being held with four initial companies in which the fund is considering investing. In addition, the Arison Investments Company, a member of the Arison Group, has established an investment venture in the water technology sphere, which will eventually total about $100m. in investments. Recently, Arison Group's Housing and Construction Holding Company Ltd. won a tender for the water desalination plant in Hadera.
Leading Israeli companies in the water desalination sphere* IDE Technologies Ltd. is owned by Israel Chemicals, Delek Group and Housing and Construction Holding Company. The company is considered the leader in the area of desalination technologies. IDE built the first desalination plant in Israel, in Eilat, as well as the desalination plant in Ashkelon, the world's largest. The company has built 360 desalination plants in 40 countries worldwide, with a desalination capacity of about 1.3 million cubic meters a day. The company was awarded the tender for building the Hadera plant, and it has also won many tenders worldwide including India, Spain and Kazakhstan.
* TAHAL Consulting Engineers Ltd. is a leading international engineering concern and part of the Kardan Group. It is one of the most highly rated companies in the world in its field. The company is a trailblazer in the area of planning, development and management of water resources in Israel, and its contacts are spread over five continents in over 50 countries. The company comprises part of the group that won the tender for the Palmahim desalination plant project.
* Global Environmental Solutions Ltd. , part of the Granite Hacarmel Group, was formed by the merger of three companies in the water technologies sphere: Italchem Ayalon, Aniam Purification Systems and Chemitas. The company deals mainly with desalination, water restoration, well water reclamation, treatment of waste and chemicals, and more. The company won a million dollar tender in Greece, and in China it will build desalination plants valued at $1 million and purification plants worth about $5m.
* Netafim Ltd. is a company that plans and implements hydrological solutions and technologies in the areas of irrigation and water. The company has annual sales of over $330m. through 32 subsidiaries operating in more than 110 countries. The company maintains a division for specialized water solutions.
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