Archive for the ‘Water’ Category
Friday, February 5th, 2010
Changes in Israel’s water industry are having a drastic effect on the nation’s water bills. At the start of the year, Israel’s national water company, Mekorot, which provides 80% of the nation’s water, increased water rates by 25%. Additionally, rates will increase by another 16% during this summer, and at least another 2% at the start of 2011. Currently, water rates range between $1.5 and $2 per cubic meter.
The additional money will help fund a rapid integration of desalination plants into Israel’s water infrastructure. Currently, Israel sources 80% of its drinking water from Lake Kinneret. However, recent water usage levels have caused the lake to drop 1.5 meters in the past two years, and created a total deficit of 2 billion cubic meters. In a report, Mekorot stated there is a 38% chance that the lake will drop to a level by the end of 2010 that prohibits further pumping.
Mekorot instituted a program in 2008 to drill relief wells, which reduced water sourcing from Lake Kinneret by nearly 50%. The company’s long-term water solution involves installing a series of desalination plants that draw from the Mediterranean Sea. Currently, three plants are fully operational, providing approximately 150 million cubic meters of water per year. A fourth plant in Hadera became operational in December 2009, and is expected to reach its full capacity of approximately 125 million cubic meters per year within a few months. Mekorot is planning on bringing two additional plants online by 2012, bringing the total production to 600 million cubic meters, or 80% of Israel’s residential demand. The Israel Water Authority predicts that the increased water production will end the country’s water shortage within three years.
Once completed, the company will invest an additional 5 billion ILS ($1.36 billion) to install a new east-to-west pipeline. The company will focus on reducing water loss with the new pipeline, but it has not made an estimate on the increase in yield at this time.
Even with such drastic rate increases, Mekorot’s CEO believes that the company will still endure heavy losses, and the company is already facing an $8 billion gap in the project’s funding. This indicates that the Israeli people can expect further increases over the coming years. The Israeli government has attempted to ease the impact on customers by temporarily suspending the national Drought Tax until April 2010. At this time, there are no additional plans for government funding or support of the project.
Posted in Water |
Thursday, January 14th, 2010
Fifteen years ago, if you asked Asit Biswas if he believed there was a global water crisis, he would have answered “Yes.” Now, however, the Stockholm Prize winning water researcher says he believes the water crisis is indeed a myth. Biswas made his statement in a lecture at the 2009 Nobel Conference held at Gustavus Adolphus College last October.
While there are notable books on the subject of global water scarcity, including those authored by fellow speaker Peter Gleick, Asit pointed out that he doesn’t see a world water crisis caused by physical water scarcity, but by water management – or rather, a lack of water management.
Asit believes that there is indeed enough water to go around as long as people manage their water better. In his talk he highlighted the fact that 70% of the world’s water is used for agriculture - therefore, inefficiencies in the food chain are also a major drain on water resources. According to Asit, food waste is extremely high, with the USDA reporting that 27% of food in the U.S. goes to waste, while in India 50% of fruits and vegetables and 33% of all cereal grains never make it to the consumer. Asit noted getting food to the people and minimizing waste is one way to increase food availability without the need for additional water. His idea extends to the domestic side as well, where water leaking from distribution pipes is commonplace around the world.
Water efficiency and management is a cornerstone to many of Lux Research’s water reports, most notably the recent reports published on agriculture and water IT. In the Lux Research report entitled “Malthus Returns: Solving the Unsustainable Agricultural Water Demand Conundrum” (client registration required), we highlight the fact that it’s impossible to recapture an appreciable amount of water evaporating from agricultural regions. The only option left to agriculture is to increase water efficiency through technologies such as drip irrigation provided by Netafim and John Deere Irrigation; smart irrigation systems provided by Hydropoint and PureSense; and practices such as increasing crop yields and reducing the volume of water needed.
Improving water efficiency on the domestic side is addressed in the Lux Research report “Ranking Water Information Technologies on the Lux Innovation Grid” (client registration required). In the report, we highlight the fact that utilities, industries, consumers, and governments need to manage water more efficiently, and a basic solution to the water management problem is obtaining better information about water usage through information technologies provided by companies such as Derceto and Itron to minimize unaccounted-for water, reduce water consumption, minimize water pollution, and reduce energy consumption.
There are no fundamental issues that contribute solely to the water crisis. Water is indeed scarce in certain areas of the world where the population density is high, and it’s true that water efficiency and management are in dire need of improvement, as is the aging infrastructure. Improving water efficiency is an integral component to solving the water crisis, but there is also a need for increased funding of public water supplies as well as more investments in the hydrocosm to continue development of innovative water and energy-efficient treatment technologies. Finally, there’s a need for change in the mindset of how water is used and consumed. Not until all of these criteria are met will we truly see an end to the water crisis.
Tags: Derceto, Hydropoint, Itron, John Deere Irrigation, Netafim, PureSense
Posted in Water |
Friday, January 1st, 2010
 Click on image to open larger version Modern agriculture accounts for 86% of the world’s water consumption. However, in regions where crops and livestock are actually cultivated, the rate of consumption often outstrips what local water sources can provide.
Empirical data suggest that it’s possible to use around only 30% of an area’s total annual renewable water resource (TARWAR) before acute water stress problems set in. According to projections modeled in our recent report, Malthus Returns, the total amount of water withdrawn for agricultural purposes is set to rise to 4,923 km3 by 2050 if all current agricultural practices are retained. In the regions where people live and grow food, the aggregate total annual renewable water resource (TARWAR) is 8,128 km3.
Translation: In 2050, agriculture’s demand for water could represent nearly twice what can be reasonably withdrawn in the areas where people live and grow food.
The solution, it would seem, requires 100% adoption of available technologies, such as those shown above. Although that would help bring agricultural water use closer to sustainable rates, it’s more feasible to project adoption rates of 25%. The results of such a scenario are sobering.
At a 25% adoption rate, these technologies will help reduce water consumption to 27% of TARWAR, which still brings agricultural water consumption uncomfortably close to the limits of sustainability. Figure in reservoir evaporation, and agricultural water withdrawals jump above sustainability to 36% of TARWAR.
Biofuels make the situation even worse. Included into the above water wedge analysis, biofuels push total agricultural water needs to 37% of TARWAR when reservoir evaporation is factored in.
Posted in Water |
Friday, December 11th, 2009
We recently met with Takao Inoue of the newly formed Innovation Network Corporation of Japan (INCJ) in Tokyo. Formed through the support of Japan’s government, INCJ aims to encourage development of emerging technologies, as well as the adoption of an “open innovation” model among Japanese corporations. The vision is to enable industrial giants from Sony to Toyota to develop new products more rapidly by accessing inventions from universities, start-ups or other large corporations. Inoue explained that INCJ has been given 90 billion yen ($1.0 billion) to invest, with commitments for up to 900 billion yen ($10.2 billion) over the next 15 years. The Japanese government committed to providing 90% of the funds, with the balance coming from private firms, such as domestic leaders like Panasonic and Tokyo Electric Power, and overseas player like General Electric. INCJ plans to pursue investments in “environment and energy, life sciences, electronics, machinery and components and advanced materials,” with additional areas possible in the future.
As part of its role, INCJ will serve as an early-stage venture capital (VC) or angel investor. It will provide funds to secure promising intellectual property from universities and government labs, and back start-ups and spin-outs – filling a gap in which traditional Japanese VCs have been unwilling to invest more than small sums. However, Inoue-san noted, INCJ’s mission isn’t limited to early-stage investments. It will also provide larger investments to fill capacity expansions and project finance needs – a role that’s missing in the West as much as Japan. Such projects require larger sums than VCs are willing to offer, or impose too much technological risk to entice traditional private equity investors.
It’s still early days for INCJ. The firm was established in June, and won’t make its first investments until early 2010. But clients should watch to see if it can maintain its political and private support, and succeed in bridging gaps in Japan’s existing financing model, which make the country poorly suited to fund emerging technologies in energy, environment and materials.
Posted in Alternative Power, Biosciences, Nanomaterials, Solar, Water |
Friday, December 4th, 2009
Jeffrey Immelt, CEO of General Electric (GE), announced that the company plans on increasing its R&D spending on water technologies by 50% in the next two to three years. As part of its intensive focus on water, the company is also building a $108 million water research hub in Singapore in conjunction with the nation-state’s Public Utility Board. The heightened interest in water, no doubt, is because of simple supply-demand imbalances manifested throughout the world – but particularly acute in Singapore, the Middle East, Australia, China and elsewhere. These imbalances are driving the need for more advanced methods of providing drinking water, including desalination and water recycling, as well as treating waste water.
The ramifications of GE’s announcement will ripple quickly throughout the hydrocosm. Many existing water companies, venture capital firms and start-ups proclaim that the historically sleepy water sector is quickly morphing into an exciting growth opportunity on the back of major secular drivers. As a leading industrial conglomerate known for shrewd investments in technology sectors, GE’s proclamation provides all companies operating in the water sector newfound credibility that may lift valuations, and could draw more companies and VCs into the fray. Also, expect GE’s many competitors, including Siemens, ITT, Dow, Veolia and GLV, to respond by increasing their own R&D spending and stepping up acquisition activity to remain competitive.
Tags: General Electric
Posted in Water |
Friday, October 30th, 2009
The Ganges is one of India’s most sacred rivers. Observant Hindus must bathe in its water at least once in their lifetime. Unfortunately, the river is subject to continuous discharge of sewerage. It’s estimated that only 15% of the sewerage discharged into the Ganges is treated. To remedy this, India plans to invest $3.1 billion to restore the river to bathing water standards by 2020. The government has applied for a $2.3 billion World Bank loan to finance the project, along with central and state government funding. The plans include building wastewater treatment facilities to increase the percentage of water treated before discharge to the Ganges.
However, many believe that more money is not the solution to the problem. Although current treatment facilities are treating just one third of the sewerage, these facilities are apparently underutilized. According to R.K. Srinivasan of the Centre for Environment and Science in Delhi, many of these facilities don’t have the funds to pay for the 24-hour electricity supply that they need. Plus there is a lack of infrastructure to convey sewerage to the treatment facilities. For example, Delhi has 30 sewerage plants, but only half the city is served by sewerage pipes. Ideally, money should first be spent on India’s infrastructure and water management to convey sewerage to treatment facilities, and to better utilize the facilities that are already in operation. Regardless of India’s approach, any improvements, be it infrastructure or new treatment facilities, will benefit engineering companies that specialize in the concession model (build-own-operate or build-own-operate-transfer), such as CH2M Hill or Black & Veatch.
Posted in Water |
Thursday, October 29th, 2009
 Carbon vs Water
Energy’s Thirst for Water Challenges Carbon Debate
Our recent report, “Global Energy: Unshackling Carbon from Water” represents the most comprehensive analysis to date of how well conventional and alternative energy sources balance their CO2 and water intensity. Among its many insights is the observation that many new energy sources and extraction methods reduce carbon intensity, but often at the cost of increased water usage.
The above graphic, taken from the report, underscores that all fuels require some carbon-intensive energy and water inputs for extraction and processing. Furthermore, they all release carbon into the atmosphere when burned.
However, the relationship between water intensity and carbon intensity varies by fuel type. Conventional fossil fuels contribute a large percentage of global carbon emissions, but are historically cheap and plentiful. As these resources run thin, new extraction technologies tend to increase either their carbon or water footprint – and sometimes both. Exploring the impact of both traditional and emerging fuels, we found:
- Crude oil, diesel and gasoline are carbon-intensive but don’t require much water
- Alternative fossil fuel sources, such as shale bed natural gas, coal to liquids and bitumen from tar sands perform worse on carbon, water or both
- Renewable fuels also have their demons, specifically biofuels derived from crops and other forms of biomass, which have low carbon impact but exact a much greater demand for water
Posted in Water |
Wednesday, October 28th, 2009
We recently spoke at the Sweden and California Sustainable Innovation Conference in San Francisco, California. Despite differences in industry and population, the governments of Sweden and California share similar sentiments and regulations on energy and the environment. They also share ambitions to lead in environmental issues, and even formal agreements on specific goals and metrics.
One example of their overlapping interest is environmental management of urban regions. Generally, 50% of the populations in industrialized countries live in cities, which pose specific environmental challenges for city-based administrators - as opposed to their national counterparts.
Among the speakers was Caroline Dahl from the County Administrative Board of Skåne - the Swedish side of the Öresund strait, an urban region encompassing Copenhagen and home to 3.7 million inhabitants. She told the audience, “In the 1970s, you could not dip a toe in the water flowing around Stockholm, an island city. Today, you can fish and swim and drink it - a situation almost unique among capital cities around the world. Sweden has reduced sulfur emissions to levels not seen since World War I.”
She also discussed how the country’s Symbiocity program links urban systems so that waste from one system becomes fuel for another. To illustrate, she described the municipal plants converting landfill and agricultural waste into biofuel, which is done “a lot” in Skåne. In addition, the bus fleet in the region’s largest city, Malmö, runs on biogas made from agricultural and municipal waste.
From the California side, we heard about Sustainable Oakland. While Oakland is notorious for gang violence rivaling that of Chicago and Los Angeles, it’s also earning a reputation as an increasingly green city for fielding initiatives from water meters to building codes. Garrett Fitzgerald, the city’s Sustainability Coordinator, talked about some of the palpable reasons that San Francisco’s sister city is so concerned about climate change: “We’ve seen sea levels rise seven inches over the last 150 years, and we expect maybe three feet over the next 100 - that means we would lose both airports in the region (both SFO and OAK are built on reclaimed land at the waterfront). We’ve seen snowpack reducing, which means less water - as much as 20% to 40% reduction.”
He said that 58% of Oakland’s greenhouse gas (GHG) emissions come from transportation, so the group’s top priorities are transit-oriented. The city is pursuing a goal of 0% waste by 2020, and pointed out that San Francisco is tops in the U.S. on this metric. Toward that goal, he said, “We’re looking at a lot of waste-to-energy technologies, but we are not convinced they are the way to go. Specifically, by assigning a commodity value to waste we might inadvertently cause people to stop reducing their consumption by giving them the false impression that waste has value and ‘isn’t that bad.’”
As progressive urban regions bisected by water, the Öresund region and the San Francisco Bay area are natural partners. Each provides a fertile test ground for companies interested in developing sustainable technologies, based on similar characteristics. Namely, millions of consumers willing to experiment with environmental products and programs, economically diverse industries and markets, and politicians eager to try new solutions. With increasing coordination, these groups offer scale and comparability and a combination that’s more than the sum of its parts.
Posted in Biosciences, Water |
Sunday, September 20th, 2009
The bottled water market reached $62 billion in 2007 on the back of strong and steady growth over the past decade, averaging between 6% and 8% annually. However, the backlash against bottled water, largely over environmental concerns regarding disposal of plastic bottles, in addition to newfound austerity resulting from the global economic downturn, is severely curtailing revenue growth and profits. Case in point: Nestlé, best known for its Poland Springs, Deer Park, Pellegrino, and Perrier brands, reported in August that profits for the first half of the year dropped 2.7%, its first decline in six years.
In order to bolster market share, many, but not all, of the companies have started slashing prices. Nestle lowered its pricing on Poland Springs bottled water by 11.3%, while Pepsi’s Aquafina bottled water pricing dropped by 5%, resulting in a revenue drop of 13.8% and 8.9% respectively. Companies that have recused themselves from the water price war, including Coca-Cola (which sells Dasani), saw U.S. sales freefall by 26%.
Although companies are betting on an economic recovery to stimulate increased sales of bottled water for those willing to pay for value and convenience, we believe that the bottled water market hit its prime a few years ago and anticipate that long-term growth will moderate to around 3%. With that said, we maintain that if the bottled water companies transition to a biodegradable bottle, many of the environmental issues leveled at the industry would be circumvented and allow for bottled water to resume a faster growth trajectory.EviEv
Posted in Water |
Monday, August 17th, 2009
On July 26, Mexico City authorities announced an emergency, 10-month water rationing plan in response to severe shortages resulting from an extended drought that has gripped the region since 1994. The National Water Commission, Conagua, warned in recent days that the seven reservoirs that make up the Cutzamala System, which supplies 24% of the Mexican capital were at dangerously low levels. (Over 70% is supplied by ground water, and the reservoirs are the sole source of water for 10 municipalities on the city’s outskirts.) Conagua, in response, plans to reduce the water flowing from Cutzamala’s dams in the southwestern state of Michoacan to 13 municipalities of Greater Mexico City by between up to 10% during the weekdays to 50% on the weekends; the goals is to reduce water use by 6.7 million m3/month, representing 3.5% of consumption. The 20 million residents of the giant metropolis were already hit with partial stoppages earlier this year, including a cutoff in April that affected roughly a quarter of Mexico City’s population.
Although the city’s mayor blames the crisis on global warming, demographics and ill-conceived management have played a far greater role in the local crisis – one that is now far too severe for temporary austerity measures to solve. The inhabitants of Mexico use on average 300 liters per day, roughly double that used in some water-conserving cities of Europe. Because the population is growing by 4% annually, water demand is expected to jump by 20% in the next four years to five years. The problem is further compounded by a self-reinforcing water withdrawal/leak cycle. Overdrawing groundwater has led to the land’s surface dropping by 10 centimeters per year. This causes the water distribution system to crack, which in turn has led to the loss of more than 40% of the water from water mains, yielding an equivalent demand for more groundwater.
The self-reinforcing nature of the problem makes it one that is particularly challenging and expensive to solve. Although the citizens of the city use a lot of water, nearly half of the “consumption” is in the form of leaks, so water restrictions on end use will be doubly painful. Those same leaks will also blunt the efficacy of water recycling. And because water withdrawal causes stresses that result in leaks, a slow piecemeal effort to replace pipes will not work. It seems that the only solution is to replace the entire distribution system within a few years; however, the Mexico City government has only allocated 770 million pesos ($57.8 million) to substitute water networks and capture systems and fix leaky pipes – a number orders of magnitude smaller than what’s required to rectify the problem. Given the political finger-pointing and token responses seen to date, it unfortunately seems unlikely that the needed investment will materialize. The city may very well have reached a tipping point where its only future is one of depopulation and decline.
Posted in Water |
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