Deep Dive: Water Security & Desalination — The Fastest-Moving Subsegments to Watch

Water scarcity affects over 2 billion people globally, with demand projected to exceed sustainable supply by 40% by 2030 without intervention. Within this crisis, specific technology subsegments are moving faster than others—attracting capital, achieving commercial deployment, and demonstrating the cost curves that signal broader adoption. Understanding which subsegments are accelerating is essential for utilities planning infrastructure, investors allocating capital, and policymakers designing incentive frameworks. This analysis identifies the high-velocity subsegments reshaping water security, with particular focus on Asia-Pacific developments where the crisis is most acute.

Quick Answer

The fastest-moving subsegments in water security and desalination for 2025-2026 are: energy recovery and low-energy reverse osmosis (achieving 2.5-3.0 kWh/m³, approaching thermodynamic limits), floating and offshore desalination (enabling rapid deployment without land constraints), brine valorization and mineral extraction (turning waste streams into revenue), solar-thermal desalination hybrids (dramatically reducing energy costs in high-irradiance regions), and direct potable reuse (gaining regulatory acceptance as "new water"). The Asia-Pacific region represents over 50% of new desalination capacity, with China, India, and Southeast Asia driving deployment.

Why This Matters

Global freshwater demand is growing at approximately 1% annually, driven by population growth, urbanization, and agricultural intensification. Climate change is simultaneously reducing supply reliability through altered precipitation patterns and glacier melt.

The economic stakes are substantial. The global desalination market reached $21 billion in 2024 and is projected to exceed $35 billion by 2030. The broader water infrastructure market—including treatment, distribution, and reuse—exceeds $500 billion annually.

For utilities, understanding subsegment dynamics informs capital planning and technology selection. A desalination plant built today will operate for 25-40 years; selecting technologies on declining cost curves versus those approaching maturity determines long-term economics. For investors, subsegment velocity indicates where returns are likely concentrated. For communities, the right technology choices determine whether water security is achievable and affordable.

The Asia-Pacific focus is deliberate: the region faces the most acute water stress while also demonstrating the most aggressive deployment of new solutions. Lessons from APAC implementations provide insight into what works at scale.

Key Takeaways

• Low-energy reverse osmosis has achieved 2.5-3.0 kWh/m³, down from 4-5 kWh/m³ a decade ago, with further improvements expected through advanced membrane development
• Floating desalination platforms are being deployed in Singapore, UAE, and Saudi Arabia, offering rapid installation and modular expansion
• Brine valorization is transitioning from waste management cost to revenue opportunity, with lithium and magnesium extraction reaching commercial viability
• Solar-thermal desalination hybrids achieve 30-50% energy cost reductions in high-irradiance regions like Australia and the Middle East
• Direct potable reuse is gaining regulatory acceptance, with Singapore and Australian utilities operating at scale
• China is installing more desalination capacity than any other country, with 15+ million m³/day added between 2020-2025
• Energy cost remains 25-45% of desalinated water cost, making energy efficiency the primary driver of subsegment velocity

The Basics: Understanding Subsegment Dynamics

Low-Energy Reverse Osmosis: Approaching Thermodynamic Limits

Reverse osmosis (RO) accounts for approximately 70% of global desalination capacity and is the dominant technology for new seawater installations. The subsegment is moving fast because energy efficiency improvements continue despite already-remarkable progress.

The physics: The theoretical minimum energy to desalinate seawater is approximately 1.0 kWh/m³ (the Gibbs free energy of mixing). Current best-practice installations achieve 2.5-3.0 kWh/m³—still 2.5-3x the theoretical limit but dramatically improved from 5-6 kWh/m³ in the 2000s.

What's driving improvement:

Advanced energy recovery devices: Pressure exchangers now achieve 95-98% energy recovery from the brine stream, compared to 70-80% for older turbine-based systems. Companies like Energy Recovery Inc. and Danfoss iSave have driven this improvement.

High-flux membranes: New membrane chemistries from Dupont, Toray, and LG Chem enable higher water flux at lower pressures, directly reducing energy consumption.

Variable-speed drives and smart operation: AI-optimized plant operation adjusts operating pressure and flow rates based on feedwater conditions and energy prices, reducing average energy consumption 10-15% versus fixed-speed operation.

Floating and Offshore Desalination

Land constraints in coastal cities are driving interest in floating desalination platforms. The subsegment is moving fast because it solves multiple problems simultaneously:

Deployment speed: Modular floating units can be deployed in 6-12 months versus 3-5 years for land-based plants.

Scalability: Floating platforms can be added incrementally as demand grows, avoiding the "build-to-peak" capital commitment of conventional plants.

Location flexibility: Offshore intake and outfall reduce environmental permitting complexity and avoid conflicts with coastal development.

Key deployments:

• Singapore's PUB: Operating a 30,000 m³/day floating desalination vessel since 2020, with plans for larger permanent installations
• Saudi Arabia's ACWA Power: Developing floating desalination for Red Sea tourist developments
• UAE's Masdar: Piloting modular floating units for emergency water supply

Brine Valorization and Mineral Extraction

Traditional desalination produces brine (concentrated salt water) as waste, typically discharged to sea with environmental concerns. The brine valorization subsegment is moving fast because it converts this waste stream into revenue:

Lithium extraction: Seawater contains approximately 0.17 ppm lithium, but desalination brine concentrates this 2-3x. With lithium prices above $25,000/tonne, extraction becomes economically interesting at scale. Saudi Arabia's NEOM project includes lithium extraction from desalination brine.

Magnesium compounds: Brine magnesium concentrations support extraction of magnesium hydroxide and magnesium chloride for industrial applications.

Sodium chloride for industrial use: Ultra-pure salt production for chemical manufacturing provides revenue at industrial desalination scales.

Zero-liquid discharge (ZLD): Complete brine elimination through evaporation and crystallization, appropriate for inland desalination where discharge is impossible.

Solar-Thermal Desalination Hybrids

In regions with high solar irradiance, integrating solar thermal energy with desalination achieves dramatic energy cost reductions:

Solar multi-effect distillation (MED): Solar thermal collectors provide heat for evaporative desalination, eliminating fuel costs. The technology works best at medium scales (1,000-50,000 m³/day).

Concentrated solar power (CSP) integration: CSP plants generate electricity during daylight hours when many desalination plants operate, reducing grid electricity costs. Saudi Arabia's Ras Al Khair plant demonstrates this integration.

Photovoltaic-RO (PV-RO) hybrids: Direct coupling of solar PV to RO desalination enables off-grid operation and minimizes transmission costs. The technology is scaling rapidly for community-scale installations in coastal developing regions.

Direct Potable Reuse

While not technically desalination, direct potable reuse (DPR)—advanced treatment of wastewater for drinking water supply—is the fastest-growing water supply augmentation technology:

Energy advantages: DPR typically requires 0.8-1.2 kWh/m³ for advanced treatment, compared to 2.5-3.5 kWh/m³ for seawater desalination.

Regulatory momentum: Singapore's NEWater has operated since 2003, demonstrating safety at scale. Australian utilities in Perth and Brisbane operate indirect potable reuse at scale. California, Texas, and Arizona are advancing direct potable reuse regulations.

Public acceptance evolution: Sophisticated public education campaigns and successful operational records are shifting perception from "toilet to tap" to "purified recycled water."

Decision Framework: Evaluating Water Security Investments

When assessing water security subsegments for investment or deployment, apply the following framework:

Technology Maturity and Cost Trajectory

1. Current levelized cost of water (LCOW): Compare to alternatives including groundwater, surface water treatment, and water imports
2. Cost trajectory: Is the technology on a declining cost curve (solar-thermal) or approaching maturity (conventional RO)?
3. Deployment scale: Has the technology been demonstrated at the required scale?

Site-Specific Factors

1. Energy availability and cost: Low-energy RO advantages are largest where electricity is expensive
2. Land constraints: Floating desalination addresses land scarcity but adds complexity
3. Environmental discharge options: Brine valorization is essential where discharge is impossible
4. Solar resource: Solar-thermal hybrids require high direct normal irradiance (DNI)

Integration Requirements

1. Grid stability: Desalination plants can provide grid services through flexible operation
2. Existing infrastructure: Retrofit and expansion opportunities versus greenfield
3. Water system integration: Storage, distribution, and treatment chain compatibility

Practical Examples

1. Singapore PUB: Comprehensive Water Security Strategy

Singapore's Public Utilities Board (PUB) demonstrates comprehensive water security implementation:

Implementation: Singapore relies on four "national taps"—imported water, local catchment, desalinated water, and NEWater (reclaimed water). PUB has systematically expanded non-conventional sources:

• Five desalination plants totaling 450,000 m³/day capacity
• Five NEWater facilities producing 800,000 m³/day
• Floating desalination pilot with plans for permanent offshore installation

Outcomes: Singapore achieved 85% water self-sufficiency by 2024, up from 50% in 2000. Desalinated water costs have declined from $0.78/m³ (2005 Tuas plant) to $0.48/m³ (2020 Marina East plant). NEWater meets 40% of Singapore's total water demand.

Lessons learned: Diversified supply portfolio provides resilience; aggressive technology adoption enables cost reduction; public communication and education are essential for acceptance of unconventional sources.

2. Chennai Metropolitan Water: Desalination Scaling

Chennai, India demonstrates desalination scaling in response to severe water crisis:

Implementation: Following the 2019 "Day Zero" water crisis when Chennai's reservoirs ran dry, the Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) accelerated desalination deployment:

• Nemmeli-I: 100,000 m³/day (operational 2013)
• Minjur: 100,000 m³/day (operational 2010)
• Nemmeli-II: 150,000 m³/day (operational 2024)
• Two additional 150,000 m³/day plants under construction

Outcomes: Desalination now provides 35% of Chennai's water supply during dry seasons when reservoir levels are low. The newest plants achieve production costs below $0.60/m³ including energy, compared to $0.80+ for the earlier installations.

Lessons learned: Crisis accelerates adoption; technology costs decline with successive deployments; desalination provides supply stability that reservoir-dependent systems cannot.

3. Perth Water Corporation: Integrated Seawater and Reuse

Perth, Australia demonstrates integrated unconventional water supply:

Implementation: Perth has experienced declining rainfall since the 1970s, with dam inflows falling 80% from historical averages. Water Corporation implemented:

• Two seawater desalination plants totaling 295,000 m³/day
• Groundwater replenishment scheme injecting treated wastewater into aquifers (indirect potable reuse)
• Aggressive demand management reducing per-capita consumption 30% since 2000

Outcomes: Climate-independent sources (desalination and groundwater replenishment) now provide 50% of Perth's water supply, ensuring supply security despite continued rainfall decline. The groundwater replenishment scheme operates at $1.00/m³ including energy, distribution, and monitoring—half the cost of new desalination capacity.

Lessons learned: Groundwater replenishment offers cost advantages over seawater desalination; demand management multiplies supply investment value; long-term planning is essential before crisis.

Common Mistakes

Underestimating Energy Cost Volatility

Energy costs comprise 25-45% of desalinated water cost. Projects assuming stable energy prices face economic stress when prices spike. Build energy flexibility (solar integration, demand response, storage) into project design.

Ignoring Brine Management

Brine disposal is increasingly constrained by environmental regulation. Projects assuming unlimited ocean discharge face future retrofit costs or operating limitations. Integrate brine reduction or valorization from project conception.

Overestimating Technology Readiness

Some emerging technologies (forward osmosis, capacitive deionization) show laboratory promise but haven't achieved commercial scale. Verify technology readiness at the required project scale before committing capital.

Neglecting Public Acceptance

Water reuse projects face "yuck factor" opposition regardless of technical safety. Invest in public communication, demonstration projects, and stakeholder engagement before large-scale deployment.

FAQ

Q: What is the current cost of desalinated water?

A: Levelized cost of water (LCOW) for seawater RO desalination ranges from $0.40-1.20/m³ depending on energy costs, plant scale, and local conditions. The lowest costs are achieved at large scale (>100,000 m³/day) in regions with low energy costs. Brackish water desalination is typically 30-50% cheaper than seawater due to lower salinity.

Q: How does desalination compare to water recycling?

A: Direct potable reuse typically costs $0.50-0.80/m³—often cheaper than seawater desalination and with lower energy consumption (0.8-1.2 kWh/m³ versus 2.5-3.5 kWh/m³). However, recycling requires wastewater infrastructure and faces greater public acceptance challenges. Many water-stressed regions need both technologies.

Q: What is the environmental impact of desalination brine?

A: Brine discharge can harm marine ecosystems through elevated salinity, temperature, and residual chemicals. Modern plants minimize impact through diffuser systems that accelerate mixing, careful outfall siting, and reduced chemical use. Brine valorization eliminates discharge concerns entirely but adds cost.

Q: Which regions have the greatest desalination potential?

A: The Middle East (particularly Saudi Arabia, UAE, and Israel), the Asia-Pacific (China, India, Singapore, Australia), and water-stressed coastal regions globally (California, Chile, Spain) have the greatest desalination potential. The combination of water scarcity, coastal access, and economic capacity drives adoption.

Action Checklist

• Assess current and projected water supply gaps in your service area using climate-adjusted demand projections
• Evaluate the levelized cost of water (LCOW) for different supply options including desalination, recycling, and demand management
• Analyze energy supply options including solar integration for desalination operations
• Develop brine management strategy addressing discharge constraints and valorization opportunities
• Engage public stakeholders early on unconventional water sources including reuse
• Review regulatory requirements and timelines for permitting new water sources
• Benchmark against leading implementations in comparable contexts (Singapore, Perth, Israel)
• Model multiple technology scenarios including cost trajectory assumptions

Sources

• International Desalination Association. (2024). IDA Desalination and Reuse Yearbook.
• Global Water Intelligence. (2024). Desalination Markets Report.
• Singapore PUB. (2024). Annual Sustainability Report.
• Water Corporation of Western Australia. (2024). Water Forever Strategy Progress Report.
• IEA (International Energy Agency). (2024). Water-Energy Nexus Report.
• Desalination. (2024). Journal Special Issue on Emerging Desalination Technologies.
• WateReuse Association. (2024). State of Direct Potable Reuse Report.