According to Forbes Magazine, the revenues of companies dealing with the production and sales of drinking water today has passed the $1 trillion (one thousand billion) mark. This is larger than the pharmaceutical sector and amounts to 40 percent of the revenues generated by oil firms. Already 5 percent of the world’s water resources are managed by private capital. However this highly profitable and stable business is controlled by 10 companies. The largest three are French (Véolia Environnement, Suez and Dégremont), followed by the German group RWE (Thames Water) and the American conglomerate Bechtel (United Utilities). Véolia and Suez each serve 200 million customers in more than 100 countries worldwide.
Over 100 billion liters of bottled water are sold in the world, 90 percent in non-reusable plastic containers. Coca Cola predicts that the growth of processed tap water – that sells more expensive than gasoline – will surpass within one decade the revenues of its soft drinks. In 2009, the worldwide retail sales of bottled drinking water increased 25 percent in volume and 27 percent in value. At least one fourth of the bottled water is tap water and much of the expensive plastic wrapping does not offer safer water than the tap offers. The water business in Russia emerged from nothing into a one billion dollar business. The Russians expect double digit growth the next decade since the per capita consumption is only 15 liters per year, while that figure is already 40 liters in Poland and 50 in the Czech Republic. A one liter bottle in Brazil costs €0,50, in the United Arab Emirates €1,00 and in French Polynesia €1,30.
In spite of the Millennium Development Goals promoted by the United Nations, by 2050 it is expected that due to massive urbanization, 4 billion people will suffer from serious shortages of water, up from 400 million now. Even Europe counts today 23 million citizens who face water crises every year. The lack of quality drinking water causes 3.4 million fatal casualties annually. In order to reverse these trends governments are planning to build water pipelines similar to those delivering oil. Canada, flush with water has contemplated reaching from Manitoba to Texas, and from British Columbia to California at a cost of $20 million per kilometer supplying 5 billion cubic meters of water per year through each pipeline. This $50 billion investments would still be cheaper than to supply the same amount of water through desalination using reverse osmosis (RO). Such mega projects are not a technological or a financial challenge, it rather boils down to political decisions potentially turning countries like Canada, Chile, Norway, Turkey and USA (Alaska) into the OPEC of water.
Demand for water – which is the precondition for life – stimulates grand ideas and strategic decisions. Water corporations are buying vast wildernesses and complete hydrological systems for future development in Latin America. Others invest in an emerging trade of water tankers for shipment around the globe, securing long term contracts. Another strategy applied by water investments is to buy water rights from farmers to access wells, or to make contracts with towns and cities to extract local water supply. General Electric (GE) set up its world center for water research in Singapore, a city state that would not be able to survive for long without the water supply from Malaysia, and the recycling of waste water on the island. GE sets the target energy cost for one cubic meter of water at 2.4 kWh produced through RO. In order to outcompete the above mentioned mega-projects the energy cost for RO would have to drop to under one kWh. This is not within reach without the blending of multiple innovations like the vortex (see Case 1). However, all solutions contemplated rely heavily on abundantly available energy which is certain to come to an end. Unfortunately, large scale RO facilities are not only expensive, these facilities discharge for every two liters of drinking water, one liter of brine, a salty slime, that has been classified as a pollutant creating dead zones in the sea.
Marc Parent worked on a lobster farm in the French Antilles as an airconditioning maintenance technician. The acute shortage of drinking water and the unreliable government services made him attempt to capture condensation water from air conditioning systems. At the same time, he needed to find a solution for the continuous interruptions in energy supply. His insights in the application of basic physics lead to the design of a wind turbine that produces electricity to suck in the air, to cool it inside and to condensate water. He imagined an all in one device. He decided to return to his home in the French Alps convinced that if it works with dry air at high altitude, then it will function anywhere. He went on to create Eole Water (France) in 2008, got local funding in 2010 and has proven to produce one cubic meter of water per day. His next 50 meter tall water mill will be able to squeeze 5,000 liters per day out of the air. Marc obtained two patents and moved to develop his new business.
The first cash flow
The first water maker system (WMS) that produces water and electricity was sold in 2011 to the Government of the United Arab Emirates. The wind generates 30kW and the cost of water is expected to drop to €0.05 per liter. The investment is expected to slide down from €500,000 to 300,000 in the first few years. This system requires a higher upfront investment for a smaller daily production. However, it eliminates the need for electricity and all related infrastructure. It is completely self-sufficient. The WMS 1000 has only minor maintenance needs compared to any other water production facility. It emits zero greenhouse gases while operating for 15 to 30 years. The whole system is manufactured with components that are 100 percent recyclable. An important part of the design engineering is that the WMS operates with the energy generated without a regulator, permitting the direct consumption of the electricity to produce water and supply the local grid. As an innovator, Marc Parent, now in his forties decided to take no risks with his suppliers and sourced the components for his systems from the best in the field, ranging from Siemens for electronics, Leroy Somer for electric supply systems and Arcelor Mittal for all inox metal parts. He became a system integrator putting parts towards function.
A wind turbine that generates water and electricity designed to operate in isolated areas with minimal maintenance imposes a series of design options like self-cleaning systems, remote control and strict anticorrosion required in coastal zones. All the equipment, including the tower, turbine, water generator and electric supply fits in two 40 foot containers, permitting the local set-up in a matter of days. Thus the market potential is not limited to islands and deserts, it can be rapidly deployed in the case of natural disasters. The main advantage is not just its independence, its multi-functionality provides multiple benefits responding to local needs with what is locally available. This is one of the core characteristics of The Blue Economy.
Whereas the WMS does not pretend to quickly become mainstream, it demonstrated that the blending of know-how and the capacity to respond simultaneously to basic needs offers a competitive business proposal. This opens up the route for more entrepreneurs to follow suit, either as licensees for marketing and manufacturing, or to operate these WMS as individual profit centers since the cost of one liter of water is well below the sales price any bottled water. This implies that one can guarantee water free of contaminants, add taste or minerals and sell competitively locally. This is an important feature when pharmaceutical residues in our drinking system are on the rise which even RO cannot fully remove. The technology Marc Parent has launched is one that will become part of a basic portfolio of innovations that will shift the rules of the game on the market.