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water pipe

What to Expect from the Water Market in 2017

water pipeWe’re not even a month in and 2017 is already looking like an opportunity-filled year for the water industry.

The federal government and individual states have made billions of dollars available for water and wastewater infrastructure projects — about $1 billion under the EPA’s new Water Infrastructure Finance and Innovation Act (WIFIA) program and New York plans to spend $2 billion to fix its water and sewer pipes.

And with corporations and municipalities facing increased water-related risk, from water pollution, enforcement costs, drought and flooding, smart-water technologies that can help minimize water loss and leaks and pinpoint problems in real-time are on the rise. Global revenue from smart water networks is projected to grow from $2.6 billion in 2016 to $7.2 billion in 2025, Navigant Research predicts.

“2017 will be a critical year for the water industry,” Bluefield Research president Reese Tisdale said. “Infrastructure investment has moved to the forefront of key issues — with Trump taking office as well as the fallout from Flint, Michigan. Market forces such as drought and water scarcity will drive new business models and interest in water reuse. We will also see a focus on innovation — in the form of smart water technologies and industrial water treatment — how far these solutions will go remains to be seen.”

Bluefield Research has forecast seven signposts to watch in 2017, and they show significant opportunities for private corporations. These include an emphasis on big data and the Internet of Things, as well as new business models driven by rising water and wastewater bills: water rates are rising at an average 7 percent clip per year, Bluefield says.

One example of these new business models comes from Cambrian Innovation, which, last month, said that Lagunitas Brewing Company is the first customer to use its water-energy purchase agreement (WEPA), a no-money-down financial model similar to those more commonly found in the solar industry.

Under the WEPA, which Cambrian says is a first for the industrial wastewater treatment industry, Lagunitas will use Cambrian’s EcoVolt product to treat its wastewater onsite, producing recycled water and clean energy to use at its Azusa, California brewery, which will open this year. The brewery will pay a monthly fee and zero money down for the wastewater treatment and renewable energy generation as a service.

By reducing its utility bills and eliminating its off-site wastewater hauling and treatment costs, Cambrian estimates the WEPA will save the brewery $22.5 million over the 20-year contract.

“It’s part of this broader trend of infrastructure as a service that has a huge amount of potential,” said Cambrian Innovation Founder and CEO Matthew Silver in an earlier interview.

Tightening regulations will also play a role in driving advanced water management and water treatment systems, according to Bluefield, which says the EPA has issued 95 consent decrees to violators of the Clean Water Act totaling more than $6.4 billion in civil penalties. Of these, 78 percent have been issued since 2008.

Earlier this month the Potomac Electric Power Company (Pepco) agreed to pay $1.6 million and install a water treatment system for alleged Clean Water Act violations at its service center in Anacostia, Washington, DC. And in late December a court ordered Shell to pay $22 million to a California city after unsafe levels of a chemical, 1,2,3-trichloropropane, or TCP, were found in the city’s drinking water supply.

Here are Bluefield’s seven signposts.

  1. Infrastructure Investment at the Forefront
  2. Rate Escalation Sets Stage for Business Model Innovation
  3. Developed Markets Forced to Confront Aging Networks
  4. Water Gets Smart: Emphasis on Big Data and IoT
  5. Bottom Line Enables Innovation for Industrials
  6. California Sets the Stage for Water Reuse
  7. Private Sector Looks to Water for Opportunity

Additional analysis from the firm’s water experts about each signpost is available, for free, on the company’s website. The forecast provides valuable insight for environmental managers and water companies alike about what to expect and where the market opportunities lie in 2017.

 

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