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Water Treatment, Reuse: an $11 Billion Opportunity for Water Tech Companies

wastewater treatment projectWater technology companies received good news — an a likely boost in business — from a recent California report that concludes it is feasible to develop uniform water recycling regulations for direct potable reuse in the state.

This means the drought-stricken state can move forward with its plans to use recycled water, or treated sewage, for drinking water. Currently it’s only used for non-potable purposes such as agriculture and irrigation.

It also means that the demand for advanced water treatment technologies such as micro filtration, reverse osmosis and UV disinfection systems will grow.

On Sept. 8, the California State Water Resource Control Board released its draft report in response to a 2014 bill signed by California Gov. Jerry Brown that required state health and water officials to study the feasibility of developing uniform standards for recycling wastewater for direct potable reuse.

While the study said there are some areas where more research is needed, the State Division of Drinking Water determined that research can continue simultaneous to the development of criteria for California’s first advanced treated water facility for direct potable reuse.

El Paso and other cities in Texas — another state with limited water supplies — already treat wastewater to produce drinking water.

And California’s Orange County operates the world’s largest sewage purification system, which produces 100 million gallons of potable water per day, and has been operating for almost a decade.

The fact that California is moving forward with statewide recycled water standards will not only boost the market for advanced water treatment technologies, but also serve as a model for other areas with limited water supplies, says Erin Bonney Casey, senior analyst for Bluefield Research.

“The progress made in California to pass uniform water recycling criteria for direct potable reuse provides a major boost for future water reuse projects,” Bonney Casey said in an email. “Specifically, when passed, it is going to provide the opportunity for a greatly accelerated timeline for potable reuse project development. Additionally, other states in the country look to California, and other first movers on direct potable reuse like Texas, as leaders in the space and are able to base their future reuse standards on the experience of California. California’s progress on reuse standards provides a mechanisms for growth in its own market and in other markets facing water scarcity.”

Bluefield Research recently published a report that forecast US water reuse capacity to increase 58 percent in the next 10 years, led by California and Florida, which account for 36 percent and 26 percent of currently planned reuse capacity additions, respectively. The report said CAPEX investment in reuse is expected to total $11 billion between 2016 and 2026.

California, alone is forecast to spend about $4.3 billion on new treatment facilities, upgrades and expansions to existing reuse treatment plants, and additional networks to distribute reclaimed water to end users. This means new business for water companies, Bonney Casey says.

“Direct potable reuse opens a new market for suppliers of advanced treatment technology such as micro filtration, reverse osmosis, and UV disinfection systems,” she said. “These types of technologies have not typically been used at wastewater treatment facilities but the growth of potable reuse projects will make them more relevant to municipal wastewater treatment plant operators.”

Some companies that make water treatment technologies are already seeing a boost in profits.

“Communities and companies are increasingly realizing the economic value of clean water — and that’s driving growth in Dow’s water business at two times [the rate of] the global GDP,” Dow chairman and CEO Andrew Liveris told Bloomberg News.

And despite the “ick” factor of drinking purified sewage water, most Californians are overwhelmingly OK with it, according to a statewide survey released earlier this year by water technology provider Xylem.

The survey, which defined recycled water as former wastewater that has been treated and purified so that it can be reused for drinking purposes, found 76 percent of respondents believe recycled water should be used as a long-term water solution, regardless of whether or not a water shortage continues.

In addition to conserving resources, this, of course, would benefit Xylem’s water technology business as well. At the time the California survey was released, Joseph Vesey, Xylem senior vice president who leads the company’s North American commercial business, said: “The state has the opportunity to champion a flexible framework that recognizes the unique needs of local communities as they work to establish water resource strategies that include sustainable solutions, such as recycled water.”

As water shortages continue to affect a growing number of global communities, we expect to see more jurisdictions follow suit, and more water companies finding business opportunities in recycled water technologies and services.

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One thought on “Water Treatment, Reuse: an $11 Billion Opportunity for Water Tech Companies

  1. Another method for California to deal with the water shortage is to collect the water that today they are letting be blown into the atmosphere that is coming down as rain in the midwest and east coast.
    There are in every 1 million Btu’s of combusted natural gas- 5 gallons of recoverable distilled water and this water is very usable.
    To get at this water the technology of Condensing Flue Gas Heat Recovery must be used. It will remove/recover the heat energy from the combusted exhaust making it available for use.
    The Department of Energy states that for every 1 million Btu’s that is recovered from the exhaust of combusted natural gas and is utilized, 117 lbs of COP2 will Not be put into the atmosphere.
    So by creating usable water, global warming is also being reduced as are CO2 emissions.
    Isn’t that California’s goals?

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