10 Largest Desalination Plants in the US
In this article, we will take a look at 10 of the largest desalination plants in the US. If you want to see some more of the US's top desalination plants, go directly to 5 Largest Desalination Plants in the US.
Although the United States has a lot more fresh water than many other countries in the world, the country is nevertheless facing water challenges in some parts.
Global warming is rapidly changing the environment.
Furthermore, the increasing population in the United States has increased demand for water.
Desalination is the process in which salty water such as in oceans are transformed into fresh water that can be consumed. Desalination can be done with different processes such as by heating up the salt water and then collecting the fresh water from the pure water vapor or by pumping salt water through a special type of membrane.
The process of desalination can be used to generate clean drinking water and desalination technology is also used in other industries such as power stations.
Because the desalination process is expensive and the United States had a lot of fresh water before, most of the world's desalination plants are overseas.
In fact, of the around 17,000 operational desalination facilities globally, only an estimated 200 are currently in operation in the United States, with the majority in the states of Florida, California, and Texas. According to the Updated and Extended Survey of U.S. Municipal Desalination Plants published in December 2018, Florida had 167 number of municipal desalination plants, California had 58, and Texas had 52.
Photo by Silvan Schuppisser on Unsplash
Economics plays a big role in terms of the construction of desalination facilities. If it costs less to build a pipeline to transport water from one area to another, many cities could choose the water pipeline rather than constructing a new desalination plant. Indeed, many cities have adopted that approach. In 1913, for example, Los Angeles used an aqueduct to transport water from Owens Valley to the city.
Although technology has made constructing desalination plants more competitive, desalination plants still cost a lot to build and the water they generate typically costs more than other water sources.
According to the APM Research Lab analysis of Pacific Institute data, for example, the approximate cost of water in California in 2015 from seawater desalination ranged from $1,900 to $4,100 per acre foot of water, brackish water desalination ranged from $840 to $1,700 per acre foot of water and storm-water capture ranged from $230 to $1,300 per acre foot of water. An acre foot is the amount of water needed to cover one acre one foot deep.
In addition to the high costs of constructing and operating a desalination plant, there is also environmental impacts such as the plants potentially using fossil fuels to power the conversion.
According to the 2016 National Resources Defense Council Issue Brief, the desalination of seawater in California requires around twice the amount of energy needed of transporting fresh water from water from the Colorado River. There are also other environmental costs. Because the salt is removed to produce fresh water, the concentrated brine is deposited back into the ocean. Because it doesn't mix well with ocean water, the brine can sink to the sea floor and potentially harm sea organisms there.
While desalination facilities might not be as economically competitive for many areas, there are still reasons for states and municipalities to construct them.
With the permitting and engineering challenges of constructing the long pipelines need to transport fresh water from water rich areas to those area in need, however, some cities may also find it easier to just create desalination plants.
With the increasing cost competitiveness of renewable energy, desalination plants could also one day become more environmentally friendly to produce fresh water.
For states like California, desalination plants offer a way to diversify its water supply portfolio. Furthermore, it's a way for the governments to eventually make desalination plant more cost competitive.
Indeed, that's one of the goals of the U.S. Department of Energy. According to Secretary of Energy Rick Perry in 2018, the DOE has launched the water security grand challenge to advance the transformational technology and innovation to meet the need for safe, secure, and affordable water.
According to the DOE, one of the goals is to "launch desalination technologies that deliver cost-competitive clean water".
As populations grow, the environment changes, and economies continue to develop, there could also be more demand for fresh water in areas of the United States that don't necessarily have enough such as in some parts of the West.
Because the desalination industry is still developing in the United States, there are very few publicly listed companies that operate in the industry. Of the ones listed in either the NYSE or NASDAQ, most also derive most of their revenue from other industries.
Nevertheless, here are five companies that could benefit from the continued development of the desalination industry either through potentially lower costs or through more demand.
Brookfield Infrastructure Partners L.P. (NYSE:BIP) is one of the largest owners and operators of global infrastructure networks. As such, Brookfield Infrastructure Partners L.P. (NYSE:BIP) is also the parent company of Poseidon Water, which operates the Claude “Bud” Lewis Carlsbad Desalination Plant, which produces 50 million gallons of water per day.
If costs go down in the industry, Poseidon Water could potentially create more desalination plants and Brookfield Infrastructure Partners L.P. (NYSE:BIP) could benefit.
On September 23, Cherily Radbourne of TD Securities resumed a 'Buy' rating and $49 price target on Brookfield Infrastructure Partners L.P. (NYSE:BIP). Analysts have an average price target of $46.54 per share on Brookfield Infrastructure Partners L.P. (NYSE:BIP).
Of the 895 hedge funds in Insider Monkey's database, 18 were long Brookfield Infrastructure Partners L.P. (NYSE:BIP) at the end of Q2 2022 with Renaissance Technologies among the top holders.
Edison International (NYSE:EIX) operates a desalination plant in Catalina Island and could potentially benefit if maintenance costs of running the desalination plant go down. Given that Edison International (NYSE:EIX) is one of the United State's largest electric utilities, Edison International (NYSE:EIX) gets the majority of its revenue from energy generation and transmission, however.
On October 3, Nicholas Campanella of Credit Suisse intiated a 'Neutral' rating and $64 price target on Edison International (NYSE:EIX). Analysts have an average price target of $73.62 per share on Edison International (NYSE:EIX).
26 hedge funds in our database were long Edison International (NYSE:EIX) at the end of the second quarter with Pzena Investment Management owning almost 14 million shares.
Energy Recovery, Inc. (NASDAQ:ERII) develops technologies that solve complex challenges for industrial fluid-flow markets globally with the company's core product being PX technology which is used for desalination.
According to the company, Energy Recovery, Inc. (NASDAQ:ERII)'s flagship PX Pressure Exchanger (PX) energy recovery device has saved its water desalination customers approximately USD $3.9B in energy costs annually.
Given industry trends, Energy Recovery, Inc. (NASDAQ:ERII) thinks the company's desalination addressable market could grow 10-20% annually on average through 2030.
For the second quarter, Energy Recovery, Inc. (NASDAQ:ERII) reported Q2 adjusted EPS of less than 1 cent per share versus the consensus loss of $0.04 per share. Revenue was $20.3 million, versus the consensus of $22.67 illion.
16 hedge funds in our database were long Energy Recovery, Inc. (NASDAQ:ERII) at the end of Q2 2022 with Trigran Investments owning almost 3.2 million shares.
General Electric Company (NYSE:GE) is an industrial conglomerate that also produces water treatment equipment. Given that it operates in so many industries, General Electric Company (NYSE:GE)'s bottom line doesn't depend all that much on the desalination industry. Nevertheless, General Electric Company (NYSE:GE) still could benefit from higher demand.
On October 3, Julian Mitchell of Barclays cut his price target on General Electric Company (NYSE:GE) to $78 from $81 but kept an 'Overweight' rating. Mitchell noted that demand was slowing but that expectations were low.
49 hedge funds that Insider Monkey tracks were long General Electric Company (NYSE:GE) in the second quarter with Viking Global among the top holders.
Ecolab Inc. (NYSE:ECL) is a global leader in water, hygiene, and infection prevention solutions. Ecolab Inc. (NYSE:ECL) has customers in over 40 industries including the desalination industry.
One of Ecolab Inc. (NYSE:ECL)'s subsidiaries is Aquatech International, which is ranked among the largest desalination companies in the world.
On October 4, P.J. Juvekar of Citi lowered his price target on Ecolab Inc. (NYSE:ECL) to $159 from $168 and kept a 'Neutral' rating. Juvekar thinks the consensus estimates could come down further.
43 hedge funds in our database had a bullish position in Ecolab Inc. (NYSE:ECL) at the end of Q2 2022 with Bill & Melinda Gates Foundation Trust owning almost 4.4 million shares.
Because many of the older facilities are no longer in operation and no comprehensiveness survey of existing desalination plants in the United States has been conducted, we used data from APM Research Lab where we took some of the largest desalination plants based in the United States and sorted them based on their maximum capacity by million gallons per day.
10 Largest Desalination Plants in the US
10. North Collier County, FL
Maximum Capacity in Million Gallons per Day: 20
The North Collier County, FL desalination plant creates drinking water through brackish water reverse osmosis. It ranks #10 on our list of 10 Largest Desalination Plants in the US.
9. Miami Dade WRP
Maximum Capacity in Million Gallons per Day: 21
The Miami Dade WRP desalination plant is based in Florida and creates recycled water through brackish water reverse osmosis.
8. Yuma Desalting Plant
Maximum Capacity in Million Gallons per Day: 22
The Yuma Desalting Plant, based in Yuma, Arizona, produces drinking water through brackish water reverse osmosis.
7. City of Port Saint Lucie
Maximum Capacity in Million Gallons per Day: 22.5
The City of Port Saint Lucie desalination plant is based in Florida and creates drinking water through brackish water reverse osmosis.
6. Tampa Bay Seawater Desalination Plant
Maximum Capacity in Million Gallons per Day: 23
The Tampa Bay Seawater Desalination Plant uses seawater reverse osmosis to produce drinking water. The plant went online in 2007 and the facility produces high quality drinking water that supplies up to 10% of the Tampa Bay region's needs.
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Disclosure: None. 10 Largest Desalination Plants in the US is originally published on Insider Monkey.