Australia set for desalination boom as water shortages loom

Australia is on track for a significant expansion of desalination capacity — converting seawater to freshwater — to meet the needs of a swelling population at a time of declining average rainfall.

The world’s driest inhabited continent is projected to build or expand 11 desalination plants worth more than A$23 billion ($15 billion) over the next 10 years, according to a research report by Dominic McNally at Oxford Economics.

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“Our population growth forecasts imply an additional 190GL/year in household water demand across major cities by 2035, while the booming data center industry also threatens to rapidly expand urban water use,” he said.

“This growing demand coincides with falling average rainfall in major population centers, increasing the vulnerability of existing infrastructure.”

Water construction activity slowed after 2010 as a severe drought receded. However, recent dry periods have reignited interest in water security and coincide with a new boom in water infrastructure investment, including desalination, McNally said.

Households regularly face summer water restrictions at times of drought, particularly in the southern state of South Australia, which is mainly classified as arid or semi-arid. Oxford reckons that over the next 10 years, demand for drinkable water will increase by more than 10% in some areas.

Meanwhile, BHP Group plans to spend A$840 million to bolster its Olympic Dam underground copper project in South Australia.

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Oxford says this, together with other nearby resource projects, will require a desalination plant to service increased mining and refining activity, by pumping water from the Spencer Gulf.

Green hydrogen and ammonia production also require significant energy and fresh water, favoring production in arid regions like the Pilbara in Western Australia and Gladstone in Queensland, Oxford said.

Industrial uses will drive particularly strong construction pipelines in WA, SA, and QLD in the late 2020s, it added.

“This has renewed interest among water authorities, proposing expanding desalination capacity as part of their asset investment plans over the coming decade,” McNally said.

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