2022 was another rollercoaster year for the water industry. As COVID-19 restrictions eased and life began to return to normal, water professionals were returning to work and regular operations, excited to kick-off a new year. But almost as soon as the new year festivities were over, the global economy entered its worst recession since 2008, leaving no industry spared.
The war in Ukraine didn’t help matters, sending the price of materials and energy through the roof, especially in Europe. This backdrop has made it costlier for the water industry to build, maintain and invest in infrastructure and technologies, and has no doubt incentivised the industry to prioritise efficiency throughout their operations.
2022 was also a year where climate change dominated the headlines, yet again. The worst drought in Europe in 400 years, the flooding of one third of Pakistan, the Western US water crisis, the list goes on.
On a more positive note, the U.S. enacted its landmark Inflation Reduction Act which set aside $4 billion in drought resilience funding and $550 million for domestic water programmes. Political-level action on water was perhaps most apparent at COP27 in Egypt, where water-related risks were foregrounded and action emphasised.
It’s not all doom and gloom for the water sector either, which has largely risen to the challenge of the moment. Investment in watertech is at an all-time high, and the industry is doubling down its efforts to improve sustainability and accelerate digitalisation. All of last years trends – such as water reuse, cloud computing and digital twins – are predicted to continue to gain momentum this year. The acceleration of digital and innovative ways to manage water better is no doubt the megatrend of the 21st century. These tools and approaches are helping water users do more with less and ensure long term sustainability.
But there is still a long way to go. Climate change, urbanisation and population growth are placing strain on existing water infrastructures, many of which are outdated, or in some parts of the world, non-existent. Technology will not be enough to tackle these challenges. What we need is to come together, communicate, collaborate and take action.
That’s why this year we’ve decided to focus on macro-trends that we predict will transform the way we manage water for good.
Here’s our pick of three to watch this year:
Climate adaptation technology
Most climate action and investment focuses on mitigation: avoiding or reducing greenhouse gas emissions into the atmosphere. But what about all the CO2 already up there?
Climate change is already causing extreme weather, leading to ever more disastrous floods, droughts and wildfires. And matters will only get worse, especially if current trends of climate (in)action are anything to go by. Which begs the question: how do we adapt?
Climate adaptation is all about building resilience to the impacts of climate change, which are mainly water related. Water is the primary means by which climate change manifests: more water in some places (i.e. floods, storms), less in others (i.e.droughts) and changes in its quality (i.e. pollution). The water industry is at the heart of the problem, but also uniquely positioned to be part of the solution.
Last year we took a look at the role of water technology in climate adaptation in our quarterly issue magazine. We received hundreds of responses and insights from across the water sector spotlighting the technologies and approaches that are helping industry and society adapt to the new water reality. Much of this ‘watertech’ is in circulation right now, it just needs to scale up and reach widespread adoption.
The good news is that climate adaptation is receiving more attention globally, putting water concerns at the centre of climate policy discussions. In early 2021 the first-ever Climate Adaptation Summit (CAS) highlighted that adaptation is crucial for preventing or limiting the impacts of extreme weather events and improving water and food security. Investment in watertech is also on the rise, with Bluefield Research predicting global spending on digital watertech will double to $55.2 billion in 2030, from $25.9 billion in 2021.
However, venture capital investment in watertech – around $200 million – pales in comparison to the $27 billion pumped into climate tech in the first half of 2022 alone. This is despite the fact that watertech is, for all intents and purposes, climate tech.
A reframing of the role of watertech in climate action will no doubt have a significant positive impact on the investment that flows into the industry, and all signs are indicating that this reframing is already underway across the investment community. Watch this space.
Decentralisation
Current centralised systems for supplying and cleaning water are increasingly considered inefficient and impractical. Water utilities take water from the environment, treat it at waterworks using energy-intensive technologies, and then transport it to homes and businesses through a vast network of pipes. This takes a lot of time, money and energy.
Decentralised treatment on the other hand is the practice of placing water or wastewater treatment at the site of supply, demand, or both. It’s received increasing attention in recent years as a flexible, sustainable alternative to large treatment plants.
These systems are often ‘modular’ in nature and allow communities to increase treatment capacity as the community grows, avoiding large up-front financing costs. Their smaller size naturally results in less energy consumption but this is also the result of the smaller distances over which wastewater is transported, reducing the pumping needs of the facility.
Typically, countries use a large portion of their energy budget just to pump water from one point to the next, sometimes over hundreds of miles. This energy use isn’t just costly, it contributes to emissions too.
And the perks don’t end there. Decentralised systems make it easier to provide water for direct potable reuse and non-potable water in both rural and urban settings for purposes such as flushing, cooling and heating, landscaping, and subsurface irrigation drip.
While these systems are usually associated with remote areas, there is also potential for cities to set up decentralised water and wastewater treatment to serve a number of buildings across a district, for example.
And now, a new study from the European Commission has found that water from ‘off-grid’ supply and treatment systems for individual buildings may be cheaper to supply than water from conventional, centralised systems.
The study, released at the end of last year, provides a detailed economic and technical evaluation of five decentralised water systems for individual buildings. Results show that even the most expensive of the systems could provide 75% of a buildings’ water at a much cheaper rate than average water tariffs. This price is expected to decrease further as the technology matures.
Companies to watch in this space include Epic Cleantec, which installs on-site, building-scale water recycling systems, and BioMicrobics, which provides modular water and wastewater treatment systems for remote communities.
Artificial Intelligence
ChatGPT has captured the world’s attention with it’s ability to answer questions incredibly accurately. But AI has wide applications in the water sector too. In the past, data collection and analysis were time-consuming, labour-intensive and often unfruitful. But now, AI and machine learning are creating new and exciting opportunities.
One of the main advantages of AI is that it automates data handling and processes that are impossible to manage manually. Utilities can make better decisions because they have real-time information about what is happening in their infrastructures. AI can help identify leaks more accurately, predict harmful events, optimise energy use, and simplify the way we manage huge data sets.
AI can save 20-30% on operational expenditures (OPEX) by reducing energy costs, optimising chemical use for treatment, and enabling proactive asset maintenance, according to Autodesk.
Market research is forecasting $6.3 billion of investment in AI solutions by the year 2030.
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