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Innovation in Wastewater

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Water Industry's Historical View of Innovation: There are currently over 15,000 wastewater systems including approximately 6,000 Publicly Owned Treatment Works (POTWs) in the U.S.(EPA, 2008) Global Water Intelligence values current US wastewater utility capital expenditures at 14.4B and forecasts that this will double in the next 6 years(Global Water Intelligence, 2010). Despite this multi-billion dollar marketplace, the water industry has historically not been a target for innovative, cutting edge technologies and entrepreneurial investment dollars. In fact, over the past 30 years, there has been relatively little change in the technologies utilized in the wastewater industry despite massive technological advances in the rest of modern industry. This is due in part to industry protocols - most utilities plan for growth and capital investment 10–20 years in advance, which is not conducive to capitalizing on current technological advances. Additionally, this slow adoption rate is also the product of a risk-averse culture: water utilities safeguard public health and the environment and are justifiably unwilling to risk their efficacy in this function with new technologies.

The past 5 years have not been business as usual for the water industry. New market forces are requiring water utilities to evolve rapidly: increasing energy costs, shrinking municipal budgets, reduced credit, and increasing regulations. A new model is needed where utilities can take advantage of cutting-edge technologies and efficiencies without risking their core public health and environmental functions. Severe weather and climate change planning are requiring new long term strategies. Energy supply disruptions are forcing utilities to adopt strategic initiatives to reduce energy consumption and increase self-sufficiency. Increasing regulation and public pressures are driving initiatives to reduce carbon footprint, reliance on foreign oil, and use of fossil fuels. Homeland security issues and natural disasters have also recently underscored the need for local energy security for the mission-critical water industry. Historically, the common driver for investment in infrastructure within the industry has been the onset of new regulation. However, where the costs of increased regulation had in the past generally been borne by increased rates, this is often no longer an option, forcing utilities to find ways to cut out costs. Municipal budgets are tighter than they have ever been, and credit is hard to come by. This need for new operating protocols and even lower operating budgets throughout such a large industry opens up significant opportunity for both entrepreneurs and engineering firms, who shape industry trends and act as advisors to water utilities.

Innovative Opportunities in Wastewater: These are challenges private industry has been wrestling with for decades, and many of their solutions are applicable to the water industry. After decades of steering clear of the industry, water has begun to garner serious interest from the investment community, even venture capitalists. A number of “clean tech” investment groups have begun including water companies in their portfolio strategy. While there are a number of reasons for the recent interest, the driving factor is the very same that is compelling the industry to begin to change: the economy and finite resources are requiring new approaches, and decades of the status quo has created a huge opportunity to improve how business is done in the industry.

Historically, long procurement and adoption cycles have prevented entrepreneurs and venture capitalists from targeting the water market, and this is still having a significant impact on the attention paid to the water industry. But if the water industry can make strategic adjustments to its adoption and procurement structures that speed up adoption of innovation while implementing new strategies to manage risk, the industry will open itself up to a new level of innovation and efficiency, to everyone's benefit. One way to achieve this is to seek out innovations that have little risk associated with them.

One of the most significant opportunities for incorporating cutting-edge innovation while avoiding performance risk lies in the fields of efficiency and resource recovery. Efficiency opportunities include, but are not limited to, adopting techniques to gather information and monitor more effectively, surgical allocation of resources to ailing infrastructure and optimization of aeration system. Resource recovery refers to harvesting valuable materials and energy from water streams, particularly wastewater. Wastewater utilities are becoming increasingly aware of the intrinsic value of the materials that pass through their treatment plants on a daily basis on their way to disposal. In fact, according to WERF (2009), wastewater contains over 10 times the energy potential that is needed to treat it. Despite this fact, at present, the wastewater industry still purchases almost 100% of its energy. While some technologies, such as anaerobic digestion and capture of energy-laden biogas have been around for quite some time, new technologies are still needed in order to capture the energy remaining in wastewater. This trend of “Resource Recovery” seeks to modify the core function of the wastewater industry to be both “waste-treatment” and “commodity-capture.” Specifically, utilities are seeking out technologies to extract and monetize energy and nutrients from the very waste they are treating. Resource Recovery enables utilities to take a more business-oriented view of their operations, seeking out nonrate-payer revenue. Given the revenue potential, it is not surprising that Resource Recovery is politically favorable and is gaining steam throughout the country.

What is especially compelling about these two areas for innovation is that change can be implemented with very low risk. Typically, these technologies operate in parallel with existing treatment regimens and/or have conventional technology redundancies built in to prevent failures. By operating in this way, risk is further mitigated to the utility as its capacity to treat wastewater is unaffected during periods of down-time of the new technology. One such technology aimed at the wastewater utility is BlackGold Biofuels' FOG-to-Fuel® system, a patented process to convert waste fats, oils and greases (FOG) from the sewers into multiple bioproducts, the most valuable of which is biodiesel. Through revenue generation, cost-savings, operational efficiency gains, reduced overflows, and improved carbon footprint, BlackGold's solution addresses major pain points of urban utilities globally. By transforming grease into an environmentally friendly commodity that sells at a premium to diesel, BlackGold Biofuels' FOG-to-Fuel® system is a textbook example of Resource Recovery.

Currently, FOG is a cost burden to utilities - it causes sewer overflows, treatment plant downtime, and equipment failures, and it significantly increases the costs of aeration by increasing nutrient loading. With the FOG-to-Fuel® system, the utility can avoid these direct and indirect FOG treatment costs and generate revenue through tipping fees from commercial FOG haulers and sales of the biodiesel product. A system is in commercial operation at San Francisco Public Utilities Commission's (SFPUC) Oceanside wastewater treatment plant. Not only is this technology financially sound, enabling the utility to reduce reliance on rate-payers, but it also can be implemented in a treatment plant with little to no impact on conventional treatment systems. FOG is received from commercial pumpers and diverted from clarifiers into the FOG-to-Fuel® system, which operates in parallel to the conventional downstream treatment. In this way, plant effluent water is unaffected by installation of the system. In the event that system availability is lower than anticipated, adequate storage tankage prevents operational disruptions. Not only is there little downside risk to the system, but it increases plant operational security by producing critical fuel from local resources onsite, safeguarding the utility in case of energy supply disruption or price spike. The BlackGold FOG-to-Fuel® system is just one example of the many innovations that can be successfully implemented in a wastewater utility to reduce cost and generate revenues without increasing operational risk. The water industry and our economy will be well-served by the faster adoption of modern innovations into the industry.
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Keywords: Biofuels, Bioenergy; Innovation; Resource Recovery

Document Type: Research Article

Publication date: 2011-01-01

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