Water – it is touched by technology in so many ways from pond (or aquifer, lake, ocean etc.) to tap and back again. Continued innovation helps us to remediate our waste; clean up accidents/spills more effectively, reduce the energy footprint of water treatment and provide distributed water in regions where infrastructure is lacking.
Demand for clean fresh water continues to grow and is estimated to increase by more than 40% by 2030. Any industry with such spectacular growth and opportunity for technology innovation demands a closer look – and at Pangaea Ventures, we have been looking closely for a number of years and made our first water investment in 2003. Also, the fact that water is essentially a perfect good and is a necessity for life doesn't hurt either.
As water demand grows and there is increasing competition for this resource from urban, industrial and agricultural users we will require new ways to treat and reuse the water we have, increase the efficiency of its use and improve how we transport water from here to there. Driving down the costs (and energy intensity) of many of these technologies is also imperative, as much of the new infrastructure development will occur in emerging economies.
The water industry is a massive $670B global market. But, do we really understand its value? Benjamin Franklin once said "when the well is dry, we learn the worth of water". There have been attempts to assign a dollar value to our water resources, and quantify the risks we face should supply not keep up with demand. Some estimates place up to 45% of global GDP in 2050 at risk if current (and future) water issues are not addressed.
According to UNEP, less than 1 percent of all fresh water resources are available and usable for natural ecosystem and human use. Couple that with the risk that 47% of the world population will be living in areas of high water stress. More than ever, innovations that produce inexpensive clean water have the potential to revolutionize a long established industry.
The workhorse of the 'water making' industry is a technology called reverse osmosis. Reverse osmosis (RO) relies on membranes and high pressures to drive contaminants and impurities out of water. RO is used in industrial wastewater treatment and is also one of the dominant technologies in desalination applications (the other one being vacuum distillation – essentially boiling sea water at low pressure and cooling and condensing the pure water vapor). RO facilities are not only expensive to build, they can be costly to operate – membranes need to be replaced and they have a large energy footprint. We tend to talk about the 'low hanging fruit' opportunities and reverse osmosis for water treatment is one of them.
There are countless opportunities to not only improve upon the RO process/technology but also to provide viable alternatives. Materials innovations will enable lower cost solutions, new process technologies and perhaps allow water treatment technologies to be scaled down resulting in smaller, more distributed networks.
Pangaea has had a close eye on the water industry for several years. Incremental technology improvements are needed in the interim – and will drive many successful companies – however, we get really excited when entrepreneurs and innovators start to look outside the box. Instead of technologies that aim to make reverse osmosis (or other existing processes better), innovations that examine at the input and desired end state and look for other pathways really have the potential to be industry game changers.
Membranes are a key component of the reverse osmosis process. However, they are expensive, prone to fouling or other damage, and require regular replacement. What if we could efficiently and effectively desalinate water without the use of membranes? Such approaches would also eliminate the need for high pressures and further reduce energy intensity and operating expense.
At Pangaea, we have seen countless innovations aiming to address this challenge. While the market is HUGE and growing at a healthy pace, the number of stakeholders, regulations and incumbents makes it a challenging space for start-ups. Purnesh Seegopaul recently blogged about the value chain challenges for materials based startups, and it could not ring truer in the water sector. As always, partner early, partner often, and do not let regulation be your downfall.