Innovation changes perceived risk of water investment

Jul 12, 2023

BlueTech Forum brings together some of the water sector’s most innovative enterprises, investors, and research centres, and Fortune 500’s biggest end-users and water utilities. A snapshot survey of the views of industry leaders from participating global organisations reveals major industry trends and shows how water investment is changing for the better.

What are the biggest challenges driving change in the water sector? 

 “Water is the primary medium through which we see the effects of climate change via less predictable water availability, increased flooding threatening water points and sanitation facilities, and exacerbated water scarcity,” says Snehal Desai, executive vice president and growth & sustainability officer at Evoqua Water Technologies.

“There is a lack of resilient infrastructure. What is in place was not built for the kind of water stresses being witnessed now and in the future. Substantial amounts of infrastructure will require upgrades or replacement in the coming years.”      

Mark England, vice president of innovation, sensing & engineering excellence at Xylem adds, “In many countries around the world, the infrastructure is old and in need of repair or modernisation, including both water treatment plants and the networks of pipes used to transport potable and wastewater.” 

Glenn Vicevic, chief technology officer for Veolia Water Technologies & Solutions sees decarbonising the industry as a priority, “We are cognisant of the challenges in decarbonising our economy, and as it turns out, the water and wastewater space is a significant contributor to greenhouse gas generation. This occurs through on-going operations as well as the technological selections. 

“In addition, wastewater treatment facilities commonly produce nitrous oxide, one of the most problematic greenhouse gases.”  

How has the mindset shifted for the water sector in the last five years? 

Michael Lesniak, vice president of global partnerships & net zero water at Aquatech says: “The move towards more sustainable and efficient water management practices is seeing a growing awareness and need to conserve water resources and reduce the environmental impact of industrial water use, primarily driven by stricter regulations, water scarcity, and increased awareness of water-related issues.”

England says that there is another mindset change that he believes the industry should be thinking about too, “Wastewater isn’t something to be disposed of, to be kept out of sight and out of mind. It is an incredibly rich resource and rethinking the attitude to the way that the industry plans and values the processing of wastewater is key to meeting the sectors net zero goals in the future, creating a truly sustainable water industry.”

What opportunities should the water sector be embracing now to tackle future challenges? 

Circular economy is front of mind for Kimberly Kupiecki, senior director at Ginko Bioworks, which uses genetic engineering to produce bacteria for industrial applications. She says, “There is incredible potential to apply synthetic biology to augment existing solutions, such as turning wastewater into valuable products, dewatering sludge more effectively, and leveraging biosensors to quickly identify contaminants. 

“Organic waste is another untapped resource. With the right biological and process application, it can be economically upcycled into saleable materials, as well as generate bioenergy. Recovery of rare earth minerals from industrial wastewater, including mining and oil and gas operations, is another example where Ginko Bioworks can implement circular economy practices,” she says.

Vicevik looks to advanced membrane technologies which allow customers “to extract more value from their existing infrastructure at a low cost and demonstrably reduced electricity.”

While England sees the opportunity in embracing and using digital technologies. He says, “Digital technologies can provide information about performance optimisation of water assets and use that data to reduce waste and process emissions. That requires new types of sensors and innovative machine learning algorithms to manage process parameters for networks.”

What are the barriers to water sector investment and what can be done to reduce the lead time from initial concept to market ready technologies? 

Common and persistent market barriers in water technology adoption are echoed by all industry leaders. These include investor appetite, variables on the return on investment, the scale of funding needed for validation testing, procurement and bidding processes not being fit for purpose, and the complexities of navigating the water market.

England adds, “Water sector investment has typically lagged behind investment in other infrastructure areas. That’s partly because water itself is not valued highly enough, and partly because the regulatory landscape has been changing faster than the typical investment return cycle, which affects investor confidence.   

“Funding to test out solutions can also be a large deterrent – many technologies can only really be validated at scale, and that means that pilot projects can be relatively expensive and are often perceived as too high risk.”

Research from BlueTech Research shows that it can take 12-16 years for water innovations to go from initial concept to market-ready solution. One of the founding goals of BlueTech Forum, which participating organisations align to, is to reduce this lead time to 6-10 years to increase the success rate of water innovations in the global market.  

To achieve this and change the perceived risk of investing in the water sector, England puts emphasis on collaborations and partnerships, that can “put forward new business models and financing methods.”  

While Lesniak recommends, “outsourcing models such as operations and maintenance and using flexible financing options such as rentals, leases, or build-own-operate contracts” to help financial challenges.

Kupiecki says, “The overall question for us is, why exactly is there not more investment in the water sector? And more importantly, what can be done about it? 

“I look forward to workshopping this challenge at this year’s BlueTech Forum. It will take a diversity of thought, building on what has already been done, and commitment to make an impact.”

To strengthen sector commitment, Xylem, Veolia, Evoqua, and BlueTech Research are joining forces with 13 other organisations to support the United Nations’ Water Action Agenda by pledging to invest US$11 billion in water innovation over the next five years.

The funds will be directed toward water-related research and development; start-up companies commercialising innovative approaches to water management; and the deployment of new water technologies. The organisations will also engage with development agencies and governments to facilitate more cross-sector action to solve water challenges and barriers to investment.

BlueTech Forum 2023 has the theme of ‘innovation for impact’, what is the benefit of taking part?

“The unique benefit of BlueTech Forum is that it brings together a diverse group of individuals, which promotes radical collaboration and innovation,” says Lesniak from Aquatech. “Through interactive roundtables, attendees are encouraged to share knowledge and experiences, challenge assumptions, and explore new ideas. This fosters creativity and generates unique insights into the most pressing water-related issues.”

“Innovation is typically a slow development curve in the water industry but participating in BlueTech Forum help us to accelerate in this area,” says Vicevic at Veolia. “The conference gives participants the opportunity to highlight breakthrough technologies, provide real-life examples of impact, and most importantly, set the stage for further collaboration.”   

Kupiecki says, “BlueTech Forum aggressively brings in new ideas and ways of thinking to drive innovative collaboration. It is highly participatory, which makes the experience more meaningful and lasting. The environment is also conducive to building new relationships and strengthening existing ones.”

 

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