Desalination equipment orders are forecast to triple over five years to become a $17 billion business, driven by breakthroughs in energy savings and demand by cities and industry.
Investment in installations that make drinking water from the sea will jump to a record in 2016 from $5 billion last year and $8.9 billion in 2012, according to forecasts by Global Water Intelligence, an industry consultant. While that’s a fraction of spending on carbon-free energy generation, it’s gaining traction among managers of environmental services funds.
“Water right now is a strain on this planet more than carbon,” Dow Chemical Co. (DOW) Chief Executive Officer Andrew Liveris said in an interview this month in London. “We mismanage water terribly. It’s going to be a big issue.”
Prompting the boom is technology that uses less energy to create potable water as well as a crush of companies entering an industry and driving down costs. From France’s Veolia Environnement SA (VIE) to IDE Technologies Ltd. of Israel and Hyflux Ltd. (HYF) of Singapore, competition to make money from duplicating the Earth’s water cycle is pushing shares of the companies in the water industry near their 2007 highs.
The S&P Global Water Index (SPGTAQD) of 50 shares has advanced about 13 percent in the past year, about 15 percent short of its record in 2007. In the same period the WilderHill New Energy Index (NEX) of 96 clean-energy stocks fell about 29 percent.
Wind- and solar-power shares were clobbered by Chinese competition, European subsidy cuts, and by U.S. politicians sidestepping the climate debate and rejecting carbon limits.