After Going Green — What Kinds of Water Technology We Might See Next Year
A Green Tech Conference’s Maiden Voyage

Last week, a different kind of venture investment conference took place up in Sacramento, California. Rather than focusing upon the full range of renewable energy technologies, Going Green addressed “the whole system” that will need to respond to the new world that climate change and resource limitations are bringing—from Green cities to green buildings to mega-projects, water and renewable energy.
"About a year ago, I finally found a conference editor, Ed Ring, who enthusiastically shared my belief that water absolutely should be included as one of the topics." Could water technologies stand on their own as true venture investment opportunities? Innovative technology had not dramatically influenced the water industry in decades. Was water scarcity simply part of the energy challenge?
Putting together the water investor panel and the water company panels became as much of a contrarian exercise as putting together a new technology company. After 20 years of working in early stage companies, the more people doubted that there were enough experienced water investors and innovative water companies to fill a panel, not to mention investors interested focusing upon water as an emerging opportunity, the more confident I felt.
During the summer, water started to reveal itself as an important venture investment theme. Several US states announced formal drought restrictions—not just Florida, California and Texas, but also municipalities in Vermont and North Carolina. Water scarcity in China and Australia reached the levels of national crises. By the time the water investor panel took the stage on the first day of the conference, opportunities in water technology were ripe for discussion.
Ironically, most of the discussion among the water investors still focused upon whether innovative solutions to water scarcity and water purification would sell. Historically, a small number of enormous corporate giants have dominated the sales to slow-moving bureaucracies.
The water investors were cautious in discussing the opportunities that growing water scarcity, the impact of water pollution and the crumbling water infrastructure offer. There was little mention of the promise that advanced membrane materials and innovative designs such as advanced oxidation offer for water recycling and groundwater remediation.
The company panel featured several technologies that create new sources of water—NanoH2O and GeoPure, using innovative new approaches. The Abtech SmartSponge™ addresses the threat of pollution from stormwater by absorbing pathogens as they flow off parking lots and roofs. Derceto was able to talk about impressive 15% savings in electricity through optimizing water infrastructure.

Next Year…
I would imagine that the agenda Going Green 2007 will look a bit odd in years to come. Only one company panel on water? Where is the onsite waste water solutions panel? Where is the “smart water grid” panel? Where is the innovative desalination and water purification panel?
In a year, investors may not yet have reaped huge gains from investments in innovative water tech, but the potential for new giants to grow rapidly and lead new market segments will be clear.
Water, as simple as it is to drink, will be an obvious opportunity for investment.
More importantly, you will see new paradigms for water management—

•	Home purification tools to identify and eliminate chemical pollutants such as perchlorates and MTBE, as well as bacteria and viruses in real-time home water purification units that provide “personalized” taste for each user in a household
•	Small-scale comprehensive water management solutions for remote hospitals, schools and resorts that include waste water recycling
•	• Real-time sensors to provide a comprehensive and also highly accurate measure of the specific chemicals and pathogens and monitor water management

Enter the On-Site Water “Appliance”
Complete on-site water management “appliances” will be one of the strongest investments for the savvy early-stage investor. For a home, office or commercial establishment, recycling water to toilets and irrigation will save

•	50-90% of their water use
•	Energy and CO2 emission—in places that use significant amounts of energy to distribute water, like Los Angeles and San Diego, on-site waste water recycling saves up 80% of the energy

The systems might look like very different boxes, but they will share these features:

•	Self-operating, self-healing—comparable to a PC as compared with a mainframe computer. These appliances will automatically transmit key data about water quality directly to the utility
•	Multi-Process—combining some set of biological, ozone-based, ultrafiltration, electrocoagulation, electrolysis or chemical solutions to provide for “gold standard” efficiency and variable levels of purity for different applications.
•	Modular—to accommodate the latest innovations in membranes and other water-purification solutions
•	Highly subsidized—Within the next few years, water scarcity coupled with the cost of maintaining the water distribution network will bring many localities to remove customers from the edges of their delivery grid.

Experts¹ estimate that 70% of the costs of running a water utility are in the water transport network. According to the EPA, the US will need up to $1 trillion to upgrade its water and wastewater infrastructure over the next 20 years to maintain regulatory standards.
Water might be free—but it will cost more and more to ensure a pure, ready supply. Right now, you pay your municipality for water infrastructure. In the future, some ground-breaking innovation will be necessary to get that water to your kitchen sink. Can you imagine getting “house calls” from your water company?

---

¹ Dr Jey Jeyapalan , a world expert on pipelines who presented at the World Water Congress in April 2007 in Barcelona