Circular water companies make a splash heard ‘round the world
California started showing abnormally dry and rainless weather in 2012. The drought worsened over five years, showing up on maps as an alarming dark red color radiating from the center of the largest U.S producer of fruits, nuts and vegetables.
Then, in 2017, it suddenly reversed. Rains inundating the state in early winter flooded the Oroville Dam, closed the road to Big Sur and killed two people. During the worst weekend of the floods — around Feb. 10 — California’s reservoirs swelled to 122 percent of average.
Having just moved to the sunny state from New York, I witnessed how too little water — or too much — harms infrastructure unprepared to deal with water shortages or contain surplus rain. But tapping into the natural hydrological cycle through methods such as reducing water waste and leakages, harvesting rainwater and even purifying wastewater (yes, sewage), offers businesses in the water supply chain a range of opportunities.
A new report by ING bank, a member of the Ellen MacArthur Foundation’s CE100, a coalition of corporations developing the circular economy, urges companies to implement the circular principles of reduce, reuse and retain to relieve water shortages around the world.
If implemented in just six key regions — California, Ghana, Bangladesh, Northern India, the Netherlands and the United Arab Emirates — the circular economy could save 412 billion cubic meters of water per year, the equivalent of 11 percent of annual global water demand, equal to almost all U.S. water consumption.
"The circular economy gives you some confidence in the supply of your resources, and companies want to plan five to 20 years out to determine costs," explained Patrick McVeigh, president and chief investment officer of impact investment firm Reynders, McVeigh Capital Management, LLC.
The firm projects that the water reuse market will grow by 22 percent annually from 2016 to 2019 in response to social and environmental demands and to stave off rising water costs. This is key: In 2016, companies told CDP that water scarcity cost more than $14 billion, including fines, sourcing, loss of production and new treatment systems.
The water market has a solid business case, as annual revenues for its products and services is more than $600 billion. According to Lux Research, water startups averaged an operating profit of 12.9 percent, "torpedoing claims that it’s impossible to make money in the water business." Small consumer systems boasted 14 percent profits.
Bending a linear take-make-dispose water system into a make-use-return system also reduces reliance on outside sources, namely water utilities, which have not been quick to invest in the future. From 2005 to 2015, said McVeigh, municipal spending on water in California was flat — in part because the state's Proposition 218 artificially held down corporate water taxes since 2006 — but is picking up alongside pressure to solve water shortages. But reacting to a changing climate can’t create corporate certainty.
"One good [rainy] season helps, but it doesn’t replace the water that gets drawn out of the ground" or replace the 100 million trees that have dried out in California since 2010, which harms watersheds, increases fire risk and damages soil’s ability to retain water and nutrients.
As with any early technology in a complex system, ING warns that the circular water economy could have unwanted side effects: Efficient irrigation systems may negatively impact groundwater levels, a reduction in water use might increase water demand — or, simply, the "yuck" factor of drinking filtered toilet water may turn people off.
Despite these speed bumps, innovators aren’t waiting to benefit companies and communities by recycling water. Here's a snapshot of cities, states and nations around the world that are wading into the circular current.
In the Golden State, the circular economy could halve the number of years of anticipated water shortages (from 30 years to 17 years between 2017 to 2050) and reduce shortages by 93 overall, according to ING, making it the region with the highest potential to adopt water-renewing technologies.
On the tech front, startup accelerator YCombinator called for water startups in January, and water technology accelerator ImagineH2O announced a contest for policy proposals around water data innovations, with results to be announced in April.
Los Angeles-based OriginClear licenses Electro Water Separation, a high-speed water cleanup technology using advanced oxidation, to municipal, pharmaceutical, semiconductor, industrial and oil and gas organizations. The process uses small amounts of electricity to gather suspended oils and oxidizes them to remove fine suspended solids and dissolved contaminants such as ammonia — and, OriginClear claims, estrogens and pharmaceuticals.
It cleans contaminated water from Kern county’s oil and gas (PDF) production, which is high in suspended solids and oils that clog treatment filters. It filters fracking liquid, recycles water from livestock waste in Spain, and has expanded into Hong Kong to treat landfill leachate — while reporting quadruple revenue growth from 2015.
"We go to the early adopters first," said OriginClear CEO Riggs Eckelberry. The cost-effectiveness of the new technology allows him to predict a future in which companies operate decentralized, on-site water treatment centers that recycle dirty water and push it to points of use.
Not all U.S. water startups circle on California. The EPA and American Civil Society of Engineers estimate that the U.S. must invest $271 billion in wastewater infrastructure over the next 25 years, most of it at the local level.
Some opportunities lie within corporate campuses themselves. Washington-based Apana applies IoT and analytics to help companies plug leaks that lose water and money, and wants companies to "control water like inventory."
A quarter of water use in buildings is avoidable, according to Apana — and valuable. Matt Rose, Apana’s CEO, has called water the "oil of the 21st century."
The waste can cause lost inventory, property damage and compliance issues. Apana scans water infrastructure to detect mechanical breakdowns and give directions to fix the problems before they accumulate. Its biggest customer is the retailer Costco, where the system reduced water use by 22 percent. Recently, Wells Fargo added Apana to its $10 million startup incubator.
AquaFresco, a company born from the winning team of the 2014 MIT MADMEC competition, puts laundry waste through the wringer. The team developed a recycling system that cuts up to 95 percent of water and detergent use in washing machines, which may use 20 gallons of water to remove one teaspoon of dirt.
"You could use essentially the same batch of water to wash laundry for up to six months," reported the Atlantic. The design, which filters dirt and detergent out of waste water, is being tested at three pilot hotels and three commercial laundry facilities.
What happens when an agronomist and a Nest product designer get together? The Pulsepod, a $500, solar-powered Internet of Things device that helps farmers measure 40 observation streams including rain, hail, canopy leaf area, environmental stresses and air pollution. It can plug into other devices to measure soil moisture and shift behavior away from water waste.
The device, designed by Arable Labs, is disrupting the way farmers use water — and tapping into the agriculture market, which is expected to reach $20 trillion by 2050.
In 2013, the Brussels-North wastewater treatment plant Aquiris installed a 3 MW solar energy plant on the roof (PDF). At the time, it was consuming 182 MWh of electricity daily to service the wastewater produced by 1.4 million citizens of the capital region.
Two years later, the Veolia Water subsidiary began turning the wastewater into plastic. Researchers at the plant evolved a strain of bacteria that turns volatile fatty acids from wastewater into a biodegradable polyester called PHA. It can produce up 2,000 tons of plastic annually, which can be used for sutures, patches, stents and other medical products.
Shell is trying to leave a smaller mark on the water-stressed oil region in Qatar. The Pearl GTL (gas-to-liquid) plant produces water while it works, aiming to become sustainable, yet water-intensive, business in the desert.
"The chemical reaction that occurs when synthesis gas is passed over catalysts in a GTL plant produces water as well as the building blocks for GTL products," states Shell’s website. The plant has the capacity to treat 280,000 barrels of water per day — enough to serve 140,000 people. After trace metals and hydrocarbons are removed from the water, the industrial runoff is used for evaporation and steam systems, or for flora growing around the plant. The plant aims to become 100 percent circular.
Down under, biotech company BioGill delivers low-cost, energy-efficient water treatment systems to treat waste in remote villages, clean food and beverage wastewater and improve aquaculture pond water quality.
The bioreactor’s nanoceramic "gill" nurtures microorganisms that help the decomposition and recycling processes that remove nutrients from the water stream. Scaling from low-sludge sewage to support large-scale industrial wastewater, BioGill is used in 17 countries across three continents.
The city-state's NEWater is made from reclaimed water treated using membrane technologies and ultra-violet disinfection.
Its five NEWater plants meet up to 40 percent of Singapore's 430 million gallons per day water demand, which is expected to double by 2060. By then, NEWater will meet up to 55 percent of Singapore's demand.
The water is safe to drink — a new frontier that some may find hard to swallow, but which we'll need to overcome in a water-scarce future.