Chinas Thirst for Water

Chinas cup is definitely half full. They are embarking on the greatest growth in the history of mankind. By 2025 China will build 221 cities with a million or more people and 15 mega cities with populations of over 10 million. In contrast, Europe has 35 cities with over a million people. To create these cities massive infrastructure will have to be developed. China will build over 50,000 skyscrapers which is the equivalent of 10 New York Cities. From 1990-2005 Chinas urban population more than doubled from 254 million people to 572 million people. According to McKinsey Research, China will have 15 cities with populations over 10 million and 11 of which could have 25 to 35 million people by 2025. In total these 15 cities would have a combined population greater than the entire United States. (Exhibit 1) Shanghai would be almost as large as the country of Spain. Chinas energy demands will more than double for 2025. Oil consumption will increase from 6.9 million gallons a day to 12 million gallons a day. The formula for Chinas success is a strong government commitment and a tremendous thirst for a growth that is fueled by water. Water is the lifeblood of all existence. Without water there would be no electricity, gasoline, nuclear power or a population that exceeds 1.2 billion in China. Clearly China aims to tap into H20. China has approximately 300 million people with no access to water. Even though China has 6% of the worlds total water resources, its large population means that the country only has 25% of the worlds average water resources per capita. The UN lists China as one of 13 countries that is experiencing serious water scarcity. Of the 661 cities in China, 33% are scarce of water, while 17% of China is regarded as badly scarce of water. Exhibit 1: China is moving toward an urban billion by 2030.
Population by city size Millions of people, %
100% = Compound annual growth rate, %
TRENDLINE FORECASTS

Source: Getty Images

572 6 15 52 68 51 53 207 109

926 6.9 11

2.4 6.9 1.1

Mega (10+) Big (5-10) Midsized (1.5-5) Small (0.5-1.5) Big town (<0.5)

28

34

3.4

Mega and midsized city populations will grow faster over the next 20 years

26 128 101 25 130 4 23 17 0.3 25 2.2

An urban billion will be attained by 2030

2005

New cities

2025

Source: McKinsey Global Institue China All City Model, McKinsey Global Institute analysis

Also, Chinas water resources are not evenly distributed across the country. The north and northeast Chinese region holds only ~5% of the countrys water resources although it is home to 40% of the population. North Chinas fresh water resources are only 25% of the amount of water available in Southern China. This difference in is the number of rivers and precipitation. Northern China is also home to the heavy industrial sector which requires greater water output than Southern China. Chinas water demand in 2030 is expected to reach 818 billion m3, of which just over 50% is from agriculture (of which almost half is for rice), 32% is industrial demand driven by thermal power generation, and the remaining is domestic. Current supply amounts to just over 618 billion m3. Significant industrial and domestic wastewater pollution makes the supply-demand gap even larger than the quantity. Twenty-one percent of available surface water resources nationally are unfit even for agriculture. Thermal power generation is by far the largest industrial water user, despite the high penetration of water-efficient technology, and is very water challenged. Industrial water demand in 2030 is projected at 265 billion m3 which accounts for 40% of the additional industrial demand worldwide. Demand for water for domestic use will decrease from 14% today to 12% in 2030. (Exhibit 2) The annual rate of efficiency improvement in agricultural water use between 1990 and 2004 was approximately 1% across both rain-fed and irrigated areas. A similar rate of improvement
Exhibit 2: Aggregated global gap between existing accessible, reliable supply1 and 2030 water withdrawals, assuming no efficiency gains
Billion m3, 154 basins/regions

Supply and Demand

Water Supply
From 2007 to 2008, Chinas total water resources increased by 7 .7%, and its average precipitation increased by 6% to 646.4 mm. There is an 87% overlap between groundwater and surface water. At the end of 2008, the 496 large reservoirs in the country reserved 271 km of water, which is 29.5 km more than was reserved in 2007 . Chinas total water withdrawal in 2008 was 583 km, which is 0.9 km more than the water withdrawal in 2007 .

Water Resource Volume (km3/yr)

Renewable natural resources Groundwater (renewable, actual) Surface water (renewable, actual) Higher quality nonconventional resources Desalination 0.102** Reuse tertiary or better Total nonconventional resources Withdrawal Total annual groundwater withdrawal Total annual surface water withdrawal 107* 473* 3.710*** 3.812 2,700* 109* 2,611*

Source: * Ministry of Water Resources, 2008.  ** Estimates based on quotations from official sources, 2009. By the end of 2008 the daily capacity was 280,000 m3/d. In the middle of 2007 the capacity was nearly 200,000 m3/d, and at the beginning of 2007 the daily capacity was 160,000 m3/d.  *** Ministry of Water Resources, 2008 (Around 45% of this treated waterwater is currently reused)

Sectoral Water Use

Chinas cities account for 58.9% of the countrys domestic water demand, while the counties account for the remaining 41.1% of domestic consumption. Compared with figures from 2007 , the water used for agricultural, industrial, domestic and environmental replenishment has increased by 2.1 km3 in 2008. The water consumption per capita was 440 m3/c/yr, and 225 m3/yr of water was needed for each CNY 10,000 GDP output. This figure is 8.1% less than in 2007 .

6,900
2%

CAGR
Municipal & Domestic Industry

900 1,500 2,800 100

Relevant supply quantity is much lower than the absolute renewable water availablity in nature

40%

4,500 600 800 4,500

4,200 700 Groundwater

Sector % Demand Volume (km3/yr)

Agriculture Industrial Domestic Total annual use 62.1 362 23.6 138 12.5 73 100.0 583

Agriculture

3,100

3,500 Surface
water

Existing 2030 Basins with withdrawals2 withdrawals3 deficits

Basins with surplus

Existing accessible, reliable, sustainable supply1

Replenishment* 1.8 10
* Water for environmental use, such as the replenishment of surface water or groundwater.

1 2 3

Existing supply which can be provided at 90% reliability, based on historical hydrology and infrastructure investments scheduled through 2010; net of environmental requirements Based on 2010 agricultural production analyses from IFPRI Based on GDP , population projections and agricultural production projections from IFPRI; considers no water productivity gains between 2005-2030

Source: Ministry of Water Resources, 2008

Source: Water 2030 Global Water Supply and Demand model; agricultural production based on IFPRI IMPACTWATER base case

Chinas Thirst for Water

occurred in industry. If agriculture and industry could sustain this rate to 2030, improvements in water efficiency would address only 20% of the supply-demand gap, leaving a large deficit to be filled. Chinese industry is extremely inefficient in water use, recycling only 25% of their water compared with an average of 85% in developing countries. In 2002, Beijing opened its public-sector water industry to private and western investment. By 2008, private and foreign interests had stakes in 20% of Chinas public water utilities and 70% of the wastewater utilities. China Recognizes the Problem In the late 1990s China adopted the public-private partnership (PPP) contracts to build enough water and wastewater plants. In 2007 , China raised its national standards for drinking water and established an inspection network to monitor water quality. The Health Ministry added 71 benchmarks to the 35 already required under previous standards. The eleventh five-year plan and economic crisis stimulus package created the growth of Chinas wastewater treatment

industry. However, there are still 167 cities without wastewater treatment plants (WWTPs). According to the Ministry of Housing and Urban-Rural Development, the existing plants are only 72% in operation because there is a lack of pipe works to deliver the wastewater to the plants. The Chinese economic stimulus package of 4 trillion yuan, or $585 billion, focused nearly 40% of its spending on environmental and energy-efficient projects. Over the next two decades the Chinese government will fund 1 trillion RMB in urban water infrastructure from (151 billion U.S. dollars). Pollution is factor taxing water in China. Of the seven water systems in China, 55% of the water had a water quality grade of I-III in 2008, 24.2% of Chinas water was graded IV-V, while 20.8% of the water received a grade worse than V. Grade I refers to the natural water resources protected by the state. Grade II and III also refer to water resources that could be used to make drinking water and to sustain the aquatic eco-system, but these grades are not deemed as important as grade I. Grade IV water is only for industrial use, and grade V water is only for agricultural use. Any grade considered worse than V is unsuitable for use.

Water Sector Organization and Structure

Government ministries and agencies
State Council

State-owned Assets Supervision and Administration Commission of the State Council Provincial State-owned Assets Supervision and Administration Commission Urban State-owned Assets Supervision and Administration Commission District or County State-owned Assets Supervision and Administration Commission

National Development and Reform Commission

Ministry of Environmental Protection

Ministry of Housing and Urban-Rural Development Provincial Department of Housing and Urban-Rural Development

Ministry of Water Resources

Provincial Development and Reform Commission

Provincial Department of Environmental Protection

Provincial Department of Water Resources

Urban Development and Reform Commission

Urban Bureau of Environmental Protection

Urban Bureau of Housing and Urban-Rural Development

Urban Bureau of Water Resources

District or County Development and Reform Commission

District or County Bureau of Environmental Protection

District or County Bureau of Housing and Urban-Rural Development

District or County Bureau of Water Resources

Source: Adapted from www.gov.cn

Market Forecast for Capital Expenditures

Drinking water capital expenditure
35,000
$millions

30,000 25,000 20,000 15,000 10,000 5,000 0

07 08 09 10 11 12 Year 13 14 15 16

Due to a lack of wastewater plants, pipe works and effective supervision, it is not unusual for residential and industrial wastewater to be discharged directly into the environment. About 70% of Chinas lakes and rivers are contaminated, and half of Chinese cities rely on polluted groundwater. Citing the World Bank, the report notes that 54 billion tons of untreated waste were directly dumped into Chinas lakes and rivers in 2006. About a quarter of Chinas population, 300 million, drink contaminated water every day. Almost two-thirds of these fall ill, it said. Chinese authorities call the fabled Yangtze River cancerous. Chemical and oil disasters are seemingly endless. The expected rapid urbanization during the 12th Five-Year Plan (2011-2015) will threaten the security of Chinas water resources, government authorities have said. Pollution control and prevention guidelines on eight major rivers and lakes across the country for the next five years were jointly released by the ministries of Environmental Protection, Water Resources, Agriculture, Housing and Urban-Rural Development, Industry and Information Technology, and the National Development and Reform Commission. All the plans mentioned that rapid urbanization and fast economic development are posing great challenges to water protection in the eight rivers and lakes, including Haihe River near Beijing and Huaihe River, which marks the boundary between Chinas north and south. The volume of pollutants in these waterways during the next five years will increase by 35 to 40% due to the industrialization and urbanization in the Haihe River area, according to the plan for that water system. The plan for the Yellow River said rapid economic development along the river area would create a water shortage of about 14 billion cubic meters by 2030. According to the plan for Liaohe River, which flows through Liaoning province, breakneck GDP growth will increase the pressure on the river system. Water pollution has long been a problem for authorities. At the end of 2007 , about 9.5 million urban residents living along the Huaihe River faced the problem of unsafe drinking water, the plan said. The situation was worse in rural areas. A four-year study released by the China Geological Survey showed that only 24% of the underground water in the North China Plain is safe for direct drinking as excessive heavy metal and chemical fertilizers were found in most water resources.

Water distribution networks (new build and rehabilitation)

Water resources (including desalination)

Water treatment plants (new and rehabilitation)

Wastewater capital expenditure

20,000 15,000 10,000 5,000 0

$millions

07

08

09

10

11 12 Year

13

14

15

16

Wastewater networks (new and rehabilitation)

Wastewater treatment plants (other)

Industrial and municipal capital expenditure

60,000 50,000 40,000
$millions

30,000 20,000 10,000 0

07 08 09 10 11 12 Year 13 14 15 15

Municipal capital expenditure

Source: GWI Global Water Market 2011

Industrial capital expenditure

Ammonia and nitrogen tested in the eight rivers were highlighted on a black list of water pollutants, the plans said. About 30% of the monitored spots along the Yangtze River were found to have excessive ammonia and nitrogen, mainly caused by domestic waste and excessive use of fertilizers.

Chinas Thirst for Water

Water Quality of the Seven Water Systems

100 90 80 70 60 % 50 40 30 20 10 0
Pearl Yangtze Songhua Yellow Huai Liao Hai R iver River River River River River River
Worse than V IV to V I to III

Beijing surpasses other Chinese cities in terms of its water reuse development. In 2008 Beijing used 620 million m of water, which accounted for 18% of the countrys total water withdrawal. Another 30 million m is expected to be added to this total by the end of 2009. According to Beijings municipal government, all of the wastewater treatment plants in the city will be upgraded to water reuse plants in the near future. Then the total amount of available reclaimed water will be 2 km/yr. Most of the big water reuse plants are in Beijing. Other cities like Tianjin, Qingdao and Dalian also advocate the water reuse industry, but the plants are either small or for industrial use only. Water is an Essential Ingredient for Manufacturing & Chinas Growth Paper: China is now the biggest paper manufacturer in the world. At present there are 3,500 paper manufacturers all over China. Thirteen provinces each produce at least 1 million tons of paper and paperboard, contributing to 91% of the national output. It is predicted that Chinas paper output will reach 100 million tons in 2020. Currently, the paper industrys water consumption is 10 times larger per unit of paper production than that of developed countries. Chemicals: There are 21,000 chemical manufacturers in China, of which 80-90% are small companies with an annual revenue of less than CNY 50 million. The large chemical manufacturers are either state-owned or owned by foreign companies. To reduce production costs, half of these manufacturers are located along the Yangtze River and Yellow River. In the past, the industry was celebrated due to its incredible contribution to GDP growth and tax collection. The government is now aware of the negative aspects of the industry, such as high water consumption and pollution.

Source: Ministry of Water Resources, P .R.C.

In some parts of Huaihe River, the amounts of ammonia and nitrogen were more than 10 times the national standard for surface water, posing dangers to water safety. Industrial pollution and domestic waste accounted for 75% of these pollutants. Li Shanzheng, professor with the Beijing Hydraulic Research Institute, told China Daily that water shortages in China were severe. Saving water and finding ways to recycle it will help to alleviate the pressure the country is facing, Li said, adding that the nation needs more sewage treatment plants. According to the World Bank, water pollution directly causes 66,000 deaths annually in China from cancer and dysentery. Lack of clean water already idles as much as 15% of Chinas farmland each year, and temporary and permanent industry shutdowns are common. The World Bank estimates, water pollution and shortfalls currently cost the country $22 billion U.S. dollars, or 1.1% of total GDP , while crop and fishery losses from water shortages and pollution, including acid rain, cost another $6 billion USD each year. New to Water Management Seawater desalination is somewhat new to China. The first seawater desalination plant was built in 1982 on Woody Island of the Xisha Islands, with a capacity of 200 m/d. Most of the plants are currently provided consulting services by two institutes: the southern Development Center of Water Treatment Technology, Hangzhou, and the northern Institute of Seawater Desalination and Multipurpose Utilization, SOA (Tianjin). The existing seawater desalination plants mostly provide water for industrial use. Only a few small plants provide water for municipal use, to serve small counties.

Source: Jupiter Images

Source: Getty Images, Photos.com

Textile: The textile industry accounts for 8.5% of the total amount of water used by industry, and 10% of the total industrial discharge. China has 50,000 enterprises in the textile industry, and 99.5% of them are small businesses. Guangdong, Jiangsu, Zhejiang, Fujian, Shandong and Shanghai contribute to 80% of the total output of the country. A recent trend in the textile industry is a move in location from the south-east to the north-west of China. Power generation: This is the biggest consumer of water; 87% of power in China comes from coal-fired plants. There are four tiers in the power industry. The first tier includes five national power corporations: Huaneng, Datang, Guodian, Huadian and China Power Investment Corporation. These corporations account for 42.5% of the total output of the country. The second tier includes newly rising power groups such as Huarun, Shenhua, State Development & Investment Corporation and China Guangdong Nuclear Power Holding Co., Ltd. The second tier accounts for 10.2% of the total power output. The third tier is composed of nearly 50 regional power groups accounting for 27% of the total power output, The fourth tier is comprised of private and foreign invested power enterprises. Food and beverage: The industry includes agricultural product process, food stuff manufacturing and beverage manufacturing. Serving 1.3 billion people with food and beverages, it is a huge market. However, the manufacturers discharge non-treated wastewater into the very environment from which they draw their water resources. To improve this, the central government has set the food and beverage industry the target of reducing their water consumption by 30% for each CNY of industrial value added and 10% of pollutants discharged. This has created a market for water reuse facilities. Plans to reroute rivers compound the water shortage. The Grand Canal, a vital route of commerce from Beijing to Shanghai for more than 1,500 years, has been slated as the eastern branch of the North-South Water Transfer Project that will transfer

water from the Yangtze River to the Beijing area. However, the severely polluted water is effectively unusable even if the project is finished. The overall project also includes a central component to divert water from a tributary of the Yangtze River to Beijing which will dislocate hundreds of thousands of Chinese and is scheduled for completion in 2014. China Plans Ahead Its not well known that China has set aside more money for the adoption of clean technologies than any other country on the planet, said Dallas Kachan, managing director of Cleantech Group in San Francisco, which tracks global investment in clean technologies. China would like to achieve an urban water supply coverage rate of at least 95%, and add 40 million m/d to the water supply capacity. Urban water supply pipes that are more than 50 years old should be rehabilitated, and the average urban leakage rates should be kept below 15%. The estimated budget for these water supply issues is CNY 200 billion. Water reuse: Reuse 10-15% of treated wastewater in water scarce northern cities (China defines cities with less than 3,000 m of water resources per capita as water scarce). Meanwhile, the country aims to reuse 5-10% of treated wastewater in southern seaside cities experiencing water scarcity. In 2015, China plans to increase these percentages to 20-25% in northern cities, and 10-15% in southern cities. China also aims to add 6.8 million m/d of reclaimed water to the 2005 capacity, by building water reuse plants or upgrading existing waste water treatment plants. Wastewater treatment: Build wastewater treatment facilities in all cities and counties, and add 45 million m/d to the 2005 capacity by expanding existing plants or building new ones. Other aims include building 1,000 WWTPs, investing CNY 300 billion ($440 billion U.S. dollars) in wastewater treatment infrastructure,

Chinas Thirst for Water

the nation. In many regions of the country, we use as much water turning on the lights and running electric appliances in our homes, as we use in taking showers and watering lawns. Of this, 72% is for fossil fuels related energy production and coal accounts for 52% of all US energy generation. Each kWh of energy generated by coal requires 25 gallons of water. This is both a water quantity and a water quality issue. The amount of water usage is often of great concern for electricity generating systems as populations increase and droughts become a concern. Still, according to the USGS, thermoelectric power generation accounts for only 3.3% of net freshwater consumption with over 80% going to irrigation. General numbers for fresh water usage of different power sources are shown below. All thermal cycle plants (nuclear, coal, NG, solar thermal) require large amounts of water for cooling and condensing. However, the amount of water needed is reduced as boiler temperatures are increased. Therefore, coal, which burns at very high temperatures, is more efficient and requires less water use. Power Average Source Gal/MW-h
Nuclear 400-720 Coal 390 Natural Gas 140

Source: Corbis

and not pricing the wastewater treatment tariff below CNY 0.80/ m in all cities. Seawater desalination: Achieve a total capacity of 800,0001,000,000 m/d, for both municipal and industrial uses. China also plans to use 55 km/yr of seawater (desalination is not necessary here, as seawater can be used as cooling water). In 2020, China hopes to increase the total capacity of its seawater desalination to 2,500,000-3,000,000 m/d, and to increase its use of seawater to 100 km/yr. Any revenue from seawater desalination projects will be free of income tax. Industrial water: Keep the annual growth rate of industrial added value at 10%, while keeping the growth rate of industrial water withdrawal within 1.2%. China aims to recycle 70% of water used by industry (which is separate from the water reuse targets mentioned previously). Pollution: Reduce the three million tons of pollutants in discharged wastewater and the one million tons of pollutants in discharged industrial wastewater. The pollutants include chemical oxygen demand (COD), suspended solids (SS), biological oxygen demand (BOD), lead, arsenic, cadmium, phosphorus, nitrogen, pH, coliform, hydrargyrum and chrome. How to Achieve Chinas Water Requirements The production of energy requires large volumes of water. Thermoelectric cooling, hydropower, energy mineral extraction and mining, fuel production and emission controls all rely on significant amounts of water. According to the National Renewable Energy Lab, electricity production from fossil fuels and nuclear energy requires 190,000 million gallons of water per day; accounting for 39% of all freshwater withdraws in

Hydroelectric 1430 Solar Thermal 1060

Geothermal 2900 Biomass 390 Photovoltaic 30 Wind

Source: U.S. Department of Energy

Natural draft wet cooling towers at many nuclear power plants and large fossil fuel fired power plants use large hyperbolic chimneys that release the waste heat to the ambient atmosphere by the evaporation of water. In areas with restricted water use a dry cooling tower or radiator, directly air cooled, may be necessary, since the cost or environmental consequences of obtaining make-up water for evaporative cooling would be prohibitive. These have lower efficiency and higher energy consumption than a wet, evaporative cooling tower.

system for reusing municipal wastewater at the Terneuzen site in the Netherlands. In collaboration with local authorities and a local water producer, this site accepts more than 2.6 million gallons of municipal household wastewater every day. The local water producer removes residual contaminants and Dow then uses more than 70% of this water to generate high pressure steam. In early 2010, Dow Water and Process Solutions introduced DOWEX 650C and DOWEX 550A for a nuclear power plant through CHEC. The technologies have proven a great success and have helped Dow Water and Process Solutions become the number one provider of CPP system products to the China Guangdong Nuclear Power Group (CGN).
Source: SXC

Lower Energy Membrane Technology The overall thermodynamic efficiency of the process is about 20%. Large amounts of energy are needed to generate the high pressure that forces the water through the membrane. Current methods require anywhere from 8 to 20 kilowatt-hours of energy to produce 1,000 gallons of desalinated seawater. This depends on the quality of water to be treated. However, gains can be achieved through the separation unit. The loss here is the energy needed to push the water through the membrane. This can be reduced by designing a thinner membrane as part of a better filter system. Pressure-driven Membrane Separation

Where economically and environmentally feasible, electric companies prefer to use cooling water from a lake or river or a cooling pond, instead of a cooling tower. This type of cooling can save the cost of a cooling tower and may have lower energy costs for pumping cooling water through the plants heat exchangers. However, the waste heat can cause the temperature of the water source to rise detectably upon discharge. Power plants using natural bodies of water for cooling must be designed to prevent intake of organisms into the cooling cycle. To further complicate environmental matters, organisms that adapt to the warmer plant water may be injured if the plant shuts down in cold weather. Thermal cycle plants require water for cooling, but it does not have to be fresh water. A power generation site located on the coast has the option to use seawater. Such a site would not use cooling towers. (There is the added benefit that discharge water temperatures would have less effect on the environment). Japanese nuclear power stations, for instance, do not use cooling towers at all because all of the plants are located on the coast. If dry cooling systems are used, significant water from the water table will not be used. Other, more novel, cooling solutions exist, such as sewage cooling at the Palo Verde Nuclear Generating Station. In recent years, recycled wastewater, or grey water, has been used in cooling towers. The Calpine Riverside and the Calpine Fox power stations in Wisconsin and the Calpine Mankato power station in Minnesota, as well as the Peterborough Power Station in the UK are among these facilities. The chemical industry continues to find creative ways of recycling and reusing grey water waste streams. Dow recently began operating a novel

Source: Dow Water & Process Solutions

The key focus in desalination is around recovery of energy, reuse, and minimizing the amount of mechanical energy required in the separation unit. As a process scales up, the cost is reduced. This is true for water purification as well, but what you might not realize is just how massive that scale is. The Ashkelon Seawater reverse osmosis plant is the largest desalinization plant in the world and uses Dow filtration membranes.

Chinas Thirst for Water

This plant provides greater than 15% of the water needs of Israel from the Mediterranean Sea. They produce more water every year than Dows entire output combined at a cost of 60-70 US cts/m3 compared to desalination plants at 80-90 cts/ m3. In a typical desalinization process, 50% of the water that is pumped into the system is discharged as brine waste. This ratio is crucial to avoid salt precipitation and membrane fouling. Obviously the pressure used to force this wastewater through the system is a significant loss. With these processes, the water is again used in cooling towers until it finally evaporates into the atmosphere. This is the first time municipal wastewater has been reused on such a large scale in the industry. Three million tons of water per year was previously discharged into the North Sea after a single use. Now this water is recycled for two more applications and has resulted in 65% less energy use at this faculty compared to the alternative option of desalinating seawater. The reduction in energy use is the equivalent of lowering carbon dioxide emissions by 5,000 tons per year. Utilizing Energy Reducing Technologies The water supply also requires energy use. A large amount of energy is needed to extract, treat, and deliver potable water. Additionally, energy is required to collect, treat, and dispose of wastewater. In the United States, four percent of all power generation is used for water supply and treatment and 75% of the cost of the municipal water processing and distribution is electricity. There are two keys areas where advances in chemical engineering can facilitate decreased energy requirements for water processing. These are in water treatment, specifically in the desalination of salt water, and in the treatment of contaminated water and wastewater for re-use. Three key technologies for water treatment are Reverse Osmosis, Ion Exchange and Ultrafiltration. Reverse osmosis one of the primary technologies behind seawater desalination is also used for wastewater treatment and recycling. Ion exchange technology involves the reversible exchange of ions between a solid (the ion exchange resin) and a liquid. This technology is ideally suited for removal of contaminants and provides a wide variety of treatment solutions for healthcare, nutrition, food and beverage, mining, chemical processing, industrial water and municipal water. Ultrafiltration is a pressure driven membrane separation process that separates particulate matter from soluble components in the carrier fluid (such as water). UF membranes typically have pore sizes in the range of 0.01 - 0.10 m and have a high removal capability for bacteria and most viruses, colloids and silt (SDI).

Energy Reducing Technologies

Dow Reverse Osmosis Membrane

Source: Dow Water & Process Solutions

Dow Ultrafiltration Fibers

Source: Dow Water & Process Solutions

Dow Ion Exchange Resin Beads

Source: Dow Water & Process Solutions

Advances in Reverse Osmosis The single largest cost for seawater desalinization is the energy cost. And even though reverse osmosis is the lowest cost separation process, there is still room for improvement. It is interesting to take a step back and determine just where in the process the energy is used. A process has been designed to pressurize waste stream and is used to pressurize the seawater that is coming into the system. In this way we can recover between 95-99% of the 28.11 kw/m3 of energy that would be lost. This has been a huge breakthrough for desalination. Reverse osmosis membranes are being used in three major wastewater reclamation and resuse facilities in the city of Beijing. These novel membranes consist of three layers. The major structural support is provided by a non-woven polyester web. Because this web is too irregular and porous to provide a proper substrate for the salt barrier layer, a polysulfone interlayer is cast onto the surface of the web. The interlayer is an engineering plastic with pore diameters controlled to approximately 150 Angstroms. The final layer is a polyamide that acts as the salt barrier; this layer is only 2,000 Angstroms thick but can withstand the high pressures because of the underlying support. The membrane materials have been continuously updated and refined to improve efficiency through higher rejection, improved flux and low fouling performance. They will be used to treated 45,000 m3 of water per day at three sites BeiXiaoHe Wastewater Treatment Plant, Beijing International Airport and the Beijing Economic-Technological Development Area. This technology will help the city reach its goal of reusing half of its water, significantly extending this limited natural resource. New approaches to reduce the energy footprint of water treatment systems involves capturing waste energy throughout the treatment process. Innovative desalination technologies that use low-grade or waste heat instead of electricity have the potential to substantially reduce energy inputs, yielding a more environmentally benign process and lower operation costs. Other important technologies include energy recovery devices in desalination plants, microbial fuel cells that feed off wastewater and cogeneration plants co-located with wastewater treatment facilities. Technologies to Reduce Purification Costs Interestingly, one of the key applications of reverse osmosis and ultrafiltration technology is in the production of ultra pure water for fossil fuel and nuclear power generation. These water treatment technologies help power plants utilize available water supplies efficiently. Ultrafiltration, used in many municipal

potable water plants, is even less costly purifying up to a trillion pounds of water per year at a cost of 1/1000 of a cent per pound. Ion exchange resins can be used to demineralize water for fossil and nuclear power plant boiler feedwater, cooling tower water treatment and feedwater for industrial boilers and cogeneration plants. They are also used in condensate polishing, which allows the reuse of steam condensate from power plant boilers to reduce the overall cost of producing purified boiler feedwater. These resins also help uranium mining operations use less water and generate less waste and enable the production of high purity uranium used in nuclear power applications, helping meet the increasing global demand for energy. The best resins have the best bed kinetics and therefore operate more efficiently, giving longer runs and greater operating economy. Ultrafiltration efficiency is based on a balance of pore diameter and porosity. In order to effectively remove pathogens, viruses and bacteria, the pore size must be at approximately the 0.03 micron level. But the same membrane must have a high 50% porosity in order to allow high flux at a given transmembrane pressure. The material used for modular filters is key it must have the high porosity and be breakage resistant, especially during cleaning to avoid fouling. Creating Sustainability Modern water treatment technology and distribution infrastructure have allowed us to conquer disease, to build advanced industrial economies and to dramatically increase standards of living for many of the worlds people. Pushing the limits of water through science has also improved irrigation techniques making it possible to feed a rapidly growing population, turn deserts into inhabitable lands and to quench the thirst of large metropolitan areas. And the latest technologies have allowed us to minimize the water needed for electricity generation while continuing to provide energy to a burgeoning population.

10

Chinas Thirst for Water

Appendix
Market forecast breakdown, 2010
Industrial water 4.6% Bottled water 3.5% Point of use equipment 2.5%

$47,831m
Total water market (2010)

Irrigation equipment 1.5% Utilities 88.0%

Services 6.1% Chemicals 39.5% Industrial Equipment 54.5%

$2,188m
Industrial market (2010)

Water opex 18.5% Wastewater opex 7.4% Drinking water capex 40.6%

$42,068m
Utility market (2010)

Wastewater capex 33.5%

$32,346m
Combined capex (2010)

WTPs 9.2% Water resources/other 10.7%

$31,154m
Utility capex (2010)

Water network rehab 28.5% New water networks 6.5% WWTPs 21.1%

Equipment 22.4% Site work 20.2% Pipes 20.9% Pumps & valves 12.4% Pipe rehab services 18.9% Professional/other 5.3%

New wastewater networks 11.3% Waterwater network rehab 10.1% Other waterwater 2.6%

$6,872m
Equipment market (2010)

Other equipment 27.5% Standard process equipment 26.6% Headworks/screens 6.2% Filtration systems/media 6.1%
Source: GWI Global Water Market 2011

Meters 7.4% Sludge management 16.6% Disinfection 7.2% Membranes 2.4%

11

Sources
Dow Water & Process Solutions Water Energy Nexus, 2011 Dow Water & Process Solutions Global Climate presentation Charting Our Water Future, McKinsey Research Report to Congress on the Interdependency of Energy & Water U.S. Department of Energy Taming the Water Dragons: Opportunities & Challenges in the Chinese Water Sector-Lux Research Global Market 2011-Global Water Intelligence New York Times China Daily Milwaukee Journal USA Today World Bank World Health Organization United Nations Cleantec Corporation

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NOTICE: The use of this product in and of itself does not necessarily guarantee the removal of cysts and pathogens from water. Effective cyst and pathogen reduction is dependent on the complete system design and on the operation and maintenance of the system. NOTICE: No freedom from any patent owned by Dow or others is to be inferred. Because use conditions and applicable laws may differ from one location to another and may change with time, Customer is responsible for determining whether products and the information in this document are appropriate for Customers use and for ensuring that Customers workplace and disposal practices are in compliance with applicable laws and other government enactments. The product shown in this literature may not be available for sale and/or available in all geographies where Dow is represented. The claims made may not have been approved for use in all countries. Dow assumes no obligation or liability for the information in this document. References to Dow or the Company mean the Dow legal entity selling the products to Customer unless otherwise expressly noted. NO WARRANTIES ARE GIVEN; ALL IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE ARE EXPRESSLY EXCLUDED. Published April 2011

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